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Thank you for standing by. Welcome to EverCommerce's First Quarter 2026 Earnings Call. My name is Victor, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference call is being recorded today, May 7, 2026. And I would now like to turn the conference over to Brad Korch, Senior Vice President of Finance and Head of Investor Relations for EverCommerce. Please go ahead.

Good afternoon, and thank you for joining. Today's call will be led by Eric Remer, EverCommerce's Chairman and Chief Executive Officer; and Ryan Siurek, EverCommerce's Chief Financial Officer. Joining them will be Matt Feierstein, EverCommerce's President and the CEO of EverPro; and Evan Berlin, the CEO of EverHealth.

This call is being webcast with a slide presentation that reviews the key financial and operating results for the 3 months ended March 31, 2026. For a link to the live or replay webcast, please visit the Investor Relations section of the EverCommerce website, www.evercommerce.com. The slide presentation and earnings release are also directly available on the site.

Please turn to Page 2 of our earnings call presentation while I review our safe harbor statement. Statements made on this call and contained in the earnings materials available on our website that are not historical in nature may constitute forward-looking statements. Such statements are based on the current expectations and beliefs of management. Actual results may differ materially from these forward-looking statements due to risks and uncertainties that are described in more detail in our filings with the SEC. We undertake no obligation to publicly update or revise these forward-looking statements, except as required by law.

We will also refer to certain non-GAAP financial measures in our comments today. A reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and our earnings call presentation. As a quick reminder, in Q3 of last year, we closed on the sale of the Marketing Technology business. Our commentary today will center on the continuing operations of our business focused on our EverHealth, EverPro and EverWell verticals. All financial and operating metric results and year-over-year comparisons are presented relating to continuing operations, except for cash flow metrics or unless otherwise specified. I will now turn it over to our CEO, Eric Remer. Please continue.

Thank you, Brad. We had a strong start to the year, in line with expectations and focused on investing in key areas for accelerated growth in the back half of 2026 and beyond, including a focus on our continued integration of AI and go-to-market capabilities. Additionally, we continue to progress against our strategy of multi-solution adoption with emphasis on our top 6 solutions.

During the first quarter, EverCommerce generated revenue of $147.5 million, above the midpoint of our guidance range, representing 3.6% year-over-year growth. Adjusted EBITDA for the quarter of $40.7 million exceeded the midpoint of our guidance range, representing a margin of 27.6%. Our cross-sell motion continues to expand. In the first quarter, we saw 32% growth in customers utilizing more than one solution. Finally, we repurchased 1.3 million shares for $13.9 million during the quarter while maintaining a stable leverage profile.

EverCommerce is building the AI operating system for the service SMB workflows. We offer tremendous value to our customers by providing the system of actions necessary to run their business with tailored unique workflows. We provide end-to-end solutions to more than 745,000 customers across our 3 major verticals, EverPro for home and field services; EverHealth for medical practices and EverWell for wellness and service providers, with the 2 former verticals representing approximately 95% of consolidated revenue.

Our large and growing customer base represents a significant embedded opportunity to expand value through integrated payments, intelligent automation and AI-driven workflows. On a pro forma basis, for the last 12 months, we generated $596 million of revenue, representing 5.2% year-over-year growth. We also generated 29.7% adjusted EBITDA margin on an LTM basis. Finally, our annualized total payment volume, or TPV, was $12.9 billion.

We've often stated that our purpose of EverCommerce is to simplify and empower the lives of business owners whose services support us every day. This statement is as true today as it was when we founded the company, enabling our customers is at the center of everything we do, including many of the AI-first enhancements we discussed last quarter. AI is a force multiplier for our customers, providing a variety of growth opportunities and efficiencies.

For us, there's also a tremendous opportunity to increase retention and ARPU. Along with our embedded payment opportunity, we believe this will result in revenue reacceleration. Because we view AI to be such an important value creation driver for our customers, we have transformed our own business with an AI-first focus. We are not just bolting on third-party capabilities for existing solutions, we are building native AI agentic features into our platforms. We are reimagining workflows and making significant investments to be at the leading edge of AI capabilities for our customers.

As a reminder, our customers are small trades and small medical practices looking for simple yet vertically specific workflows needed to run their businesses. Our small business customers are not likely to vibe code their own solutions and the hands-on services our customers provide are not likely to replace with AI.

Further, we believe our targeted deep micro vertical specific expertise and embedded base of more than 745,000 customers not only puts EverCommerce in the driver's seat to be the natural provider of agentic capabilities within the system of actions they already buy from us, but also provides us the rich micro vertical data to develop the best agentic platforms.

On today's call, I'd like to now invite Matt and Evan to provide tangible examples of customer AI use cases in each EverPro and EverHealth.

Thanks, Eric. Let me highlight a quick example of how we're delivering value for customers through the EverPro platform using the Service Fusion product and the recently launched ZyraTalk AI integration. Coast-to-coast HTM is a medical equipment services company supporting hospital radiology departments across California and Texas. They operate under strict uptime requirements. When equipment goes down, speed is critical. Before Service Fusion, their operations were largely manual, spreadsheets for scheduling, limited system tracking and delays of up to 24 to 48 hours just to get approval to dispatch a technician. Now the team is seeing on-site mobilization within 4 to 6 hours.

With Service Fusion, they centralized their operations and reduced time to get a technician on site from days down to just 4 to 6 hours, driving about a 50% efficiency gain in job management. Just as important, they're now managing compliance and audit requirements directly in the platform, which is critical in this business setting.

At the beginning of this year, this customer expanded into AI with the addition of our ZyraTalk AI voice reception agent, adding an always-on communication layer that captures and documents every service request. Since deploying it, they've already booked over 30 jobs as a function of AI-driven interactions while also improving responsiveness and SLA tracking. This is the pattern we're seeing more broadly. Customers start with Service Fusion to run their operations, then add integrated AI voice reception to operate more efficiently and differentiate themselves in their market. This is a clear example of how customers expand from core workflow software into AI and automation, driving both higher retention and increased monetization over time.

I will pass it over to Evan to discuss the EverHealth customer testimony.

Thanks, Matt. We're seeing similar adoption patterns across our health care base, where AI-driven documentation is improving provider efficiency while increasing the value of our platform. Let me share another example from EverHealth, this time in the clinical set. Our customer is a solo orthopedic surgeon based in Kansas City, who's been a DrChrono's customer for over a decade. Like many independent physicians, he's balancing the demands of running a highly specialized practice while also prioritizing his time outside of work.

Before adopting our EverHealth AI Scribe, a significant portion of his day was spent on documentation, often hours after clinic, drafting and reviewing notes from patient visits. With our EverHealth AI Scribe integrated into DrChrono that dynamic has changed. Clinical notes that previously took hours are now completed in 10 minutes. And with the system accurately capturing complex orthopedic terminology and filtering out nonclinical conversation. This physician estimates savings of more than 1 hour per day with the added efficiency.

And that's not just an efficiency gain. It's a meaningful improvement in his quality of life. He's able to finish his day on time, spend more time with family and stay focused on patient care instead of administrative work. Providers adopt DrChrono in their core clinical and operational system and then layer in AI capabilities like AI Scribe to reduce administrative burden, improve documentation quality and ultimately create more capacity in their practice. It's a powerful example of how our platform is not only improving efficiency, but also meaningfully improving the day-to-day experience of our customers and the care that they deliver to their patients.

Thank you, Matt and Evan. One thing that both of these examples touched on is the importance of multiproduct adoption, which remain the key drivers for growth at EverCommerce. Multiproduct customers generate higher revenue, demonstrate stronger retention and expand wallet share over time. Historically, multiproduct adoption metrics were largely dominated by payments enablement, but AI feature adoption has increasingly become an important driver of customer value and ARPU as evidenced by the 2 customer stories we just shared.

Our payment strategy focused on enabling payments at the point of initial SaaS sale while also driving cross-sell into our existing customer base. Investments into onboarding automation and customer success are helping accelerate activation and utilization. At the end of the first quarter, 301,000 customers were enabled for more than one solution, reflecting a 23% year-over-year growth. At the end of the first quarter, approximately 131,000 customers were actively utilizing more than one solution, reflecting a 32% year-over-year growth and an acceleration in growth compared to recent quarters.

Over the trailing 12 months, net revenue retention was 95%, with multi-solution customers continuing to generate NRR above 100%. The slight reduction in reported NRR was impacted by declining third-party partner revenue within our legacy payments business. We continue to put much of our focus and investment on our fastest-growing solutions, and we continue to see outsized payments revenue growth in these top 6 solutions. In these top 6 solutions, TPV grew 19.8% year-over-year and now represents 35% of total TPV, up from 30% in the first quarter of 2025.

Top solution payments revenue grew 10% year-over-year, now representing over 46.5% of total payments revenue. Highlighting the payment performance in our growth solutions is important because this is where we're focusing our investments. The improvements in cross-sell metrics I highlighted a moment ago are largely due to the gains of our top 6 solutions. The remainder of our payments business drives meaningful cash flow generation and a lower growth.

As a reminder, we report payments revenue on a net basis and therefore, incrementally contributes approximately 95% gross margin within our core solutions. As such, payments revenue growth is a meaningful contributor to our overall adjusted EBITDA margin expansion.

Now I'll pass it over to Ryan, who will review our financial results in more detail as well as provide second quarter and full year 2026 guidance.

Thanks, Eric. Total reported revenue in the first quarter was $147.5 million, up 3.6% from the prior year period. Subscription and transaction revenue, our primary recurring revenue base was $142.1 million. Pro forma revenue adjusted for the acquisition of ZyraTalk, which closed in Q3 2025, was $596 million on an LTM basis, an increase of 5.2% and $147.5 million for the quarter, an increase of 3%, both on a year-over-year basis.

Adjusted gross profit in the quarter was $114.8 million, representing an adjusted gross margin of 77.8%. First quarter adjusted EBITDA was $40.7 million with an adjusted EBITDA margin of 27.6%.

Now turning to adjusted operating expenses, which are reconciled in the appendix to this presentation. For the quarter, adjusted operating expenses were slightly higher year-over-year as a percentage of revenue, increasing from 46.5% to 50.3%, representing targeted growth investments across sales and marketing and product development, including the post-acquisition ZyraTalk costs. For the LTM period as a percentage of revenue, adjusted expenses were flat at 47.9%.

Next, I'll turn to some key liquidity measures, which include cash flow from continuing operations. We continue to generate significant free cash flow as we invest to grow our business and invest in our AI-first products. It is important to note that the cash flow metrics shown on Slide 13 and that I'm about to discuss include the cash generated from the divested Marketing Technology Solutions business through October 31, 2025. And as such, year-over-year comparisons and quarterly trending are not fully comparable.

Cash flow from operations for the quarter was $24.6 million as compared to the prior quarter of $21.3 million and the prior year of $30.7 million. As a reminder to our guidance last quarter, our first quarter is historically burdened by higher cash outflows as compared to other quarters. Levered free cash flow was $16.6 million for the quarter. And for the trailing 12-month period, we generated more than $71 million. Adjusted unlevered free cash flow was $25.3 million in the quarter and $121.6 million for the last 12 months.

We ended the quarter with $129 million in cash and cash equivalents and $155 million of undrawn capacity on our revolver, which will step down to $125 million in July 2026. As of March 31, we have $525 million of debt outstanding. Our total net leverage as calculated for our credit facility was approximately 2.2x and continues to demonstrate our deleveraging from strong operational performance and free cash generation. We have $425 million of notional swaps at a weighted average rate of 3.91% that effectively hedge the floating rate component of our interest cost through October 2027.

Our long-term debt does not mature until July 2031, while our undrawn revolver capacity provides availability through July 2030, providing us with runway and financial flexibility for the foreseeable future. In terms of capital allocation, in addition to our AI-first investments, in the first quarter, we repurchased approximately 1.3 million shares for $13.9 million at an average price of $11 per share. Based on the shares repurchased through March 31, 2026, we have approximately $33.9 million remaining in our total repurchase authorization of $300 million through the end of 2026.

I would now like to finish by discussing our outlook for the second quarter and full year of 2026. For the second quarter of 2026, we expect total revenue of $150.5 million to $153.5 million and adjusted EBITDA of $41 million to $43 million. For the full year 2026, we reiterate our previous guidance from mid-March and expect revenue of $612 million to $632 million and adjusted EBITDA of $183 million to $191 million. Operator, we are now ready to begin the question-and-answer session.

Our first question comes from the line of Bhavin Shah from Deutsche Bank.

One for Eric or Matt and then one follow-up for Ryan. Eric or Matt, it was great to see that customer example leveraging ZyraTalk. Can you just maybe talk about where we are in terms of cross-selling ZyraTalk into the overall customer base? How are those conversations going? And how do you think about the time line of adoption of those customers that you think would best benefit from the solution?

Thank you for the question. Matt, do you want to take...

Yes, I'll start. First of all, we're super excited about ZyraTalk. Meaningful head start for us in accelerating our AI road map, helped us move much faster from experimentation into embedded operational workflows. When you think about where we are, it's obviously much more than stand-alone AI voice as your question says. It's now a foundational capability that we're integrating into our customer-facing use cases through our systems of action.

So already integrated with Service Fusion, actually, that happened ahead of schedule, already integrated with Briostack also ahead of schedule. And that's really enabling those workflows that connect the inbound demand that ZyraTalk is providing directly into our scheduling, job creation and customer engagement. So customer reception has been great. We're also leveraging internally experimenting across areas like AI-driven surveys that support other parts of our product and our operation, outbound prospect engagement.

So all in all, ZyraTalk as a platform has been everything we expected and more. And we're really ahead of pace relative to our integration, launch and customer acquisition goals through Q1. And we continue to see really interesting use cases for AI-enabled workflow automation, which is becoming increasingly more important to our customers.

Great. And looking forward to seeing more in the coming quarters. Maybe, Ryan, just for you. Just by your math, looking at subscription and transaction growth, if you exclude the legacy payment solutions, it appears growth remains healthier than just the reported number. Can you maybe just help us understand some of the underlying assumptions that's going into the full year guide in terms of how much of a drag the legacy payments line item is having on the overall business? Is the 1Q growth rate is a reasonable way to think about the rest of the year? Or should we think about it differently?

Yes. Thanks, Bhavin, for the question. I appreciate it. I think you can tell from the full year guide that remained unchanged. We're expecting continued growth throughout the year, particularly in the back half of the year, given the Q2 guide that we just came out with. We understand in our -- from our perspective, the focus on the second half acceleration that's embedded in the guide. And to be clear, like we're focused on it. We have confidence though in some particular areas for the back half of the year in particular.

First, pricing actions are going to have a larger impact in the back half based on the timing and the rollout cadence of those pricing actions to our overall portfolio, which isn't just one solution, various solutions in our portfolio. The second is, as Matt talked about and some of the examples provided, we're seeing improving leading indicators across payments enablement, multiproduct adoption and really growth in top solutions. So while we do have some of the legacy portfolio drag, and we're not going to give guidance with regard to the split between the top 6 solutions and the legacy portfolio, we do continue to expect growth in the top 6 solutions throughout the course of the year, particularly as we execute against some of the strategies I just talked about.

Third, I would say that we've been making investments over the last 18 to 24 months particularly around our go-to-market structure, onboarding and execution. And we're moving really a lot of those from foundational elements into building for scaling purposes.

And then finally, last but really not least in kind of those pillars, we're moving from AI investment into monetization of those targeted investments. The 2 examples, I think, that we gave on the call today highlight those and with products like EverHealth Scribe and the ZyraTalk integrations with AI reception is contributing incremental ARPU expansion and that just gives us further confidence that there's more opportunities. That will be multiyear, not just for this year, but we're continuing to grow those.

And our next question will come from the line of Alex Sklar from Raymond James.

Maybe for Eric or Matt or Evan want to take this one, but I wanted to ask you on new customer velocity and some of the top of funnel trends. Any change in mix shift on where you're seeing the growth come from between self-service, direct or some of the other channels? And then as we think about pipeline generation in particular, how much has changed since you started operating EverPro and EverHealth a little bit more independently in terms of top of funnel?

That's a great question. I actually think it makes sense to have both Evan and Matt give their view of the pipeline [ everyone is ] set up.

Yes. Thanks, Alex, for the question. I mean I think a couple of things. One, we continue to see strong demand. The environment is still healthy. We continue to see sales cycles trend down, and we've seen that really over the last, I'd say, 3 or 4 quarters in a really positive way. Some of that is better execution on our end. Some of it is the claim rate and the demand from the prospective customers for some of the features that we rolled out. I also think it's just better execution from our teams.

I think from a funnel health perspective, we talked about this in March and I think in November as well, we started to shift more and more of our effort and our investment into outbound. And while that was historically kind of 1% or 2% of kind of new bookings, it's starting to be a healthier percentage. We actually overachieved in Q1 against our budget. We have a fairly aggressive growth targets across 2026, but really pleased with the progress that the team has been able to make both on capitalizing on the demand environment as well as kind of the more aggressive mix to outbound, which we think over time has just better economics in terms of LTV to CAC.

Yes. And I'd follow on, Evan. Obviously, from an EverPro perspective, we're super focused from an inbound perspective. I think our demand trend remains healthy and stable. Sales cycle timing remained stable. Funnel health is obviously an area that we focus on all the time in terms of improving conversion through our marketing and sales motion. So just continued stability quarter-over-quarter from an EverPro standpoint.

And I think the one question you asked, which is a great one, how has that shifted? With kind of the -- over the last year plus of kind of really separating EverHealth and EverPro, I think the funnel has never changed. I think during the transition, as Evan brought up, we had executionally making that transition. There were challenges within the execution as you've seen and the reacceleration that we're excited and very confident about is really driven by having both EverPro and EverHealth businesses much more mature at this point.

Okay. I appreciate all the color there. Ryan, maybe just following up on the second half guide question, but from the margin side of things, there's a pretty big implied step-up in incremental margins. Where is the leverage coming from on the OpEx side in particular?

We continue to just work through the transformation optimizations that we started with previously. I would say that a lot of the enhancement from an EBITDA perspective in the back half of the year is really going to be targeted from a flow-through perspective on the margin that's coming from the incremental revenue. So that incremental revenue is in areas where we have higher margin capabilities. The pricing impacts that I talked about earlier will have an outsized impact from a margin contribution perspective.

Not only that, but we are also continuing to focus our efforts on the continued transformation optimization and cost optimizations that we have in various parts of the business. But we'll not underinvest. As you can see from a capitalization perspective and where we're spending time and effort from an investment point of view.

If you look at an LTM basis, we're continuing to strongly invest in the areas that are providing the examples that Matt and Evan talked about from an AI perspective, we've increased our investment in capitalization from a software perspective, which is largely infrastructure as well as product capabilities by like $13 million year-over-year on an LTM basis. And we're going to continue to focus that resource allocation in a way that is going to continue to drive future growth for those higher-margin products.

Our next question will come from the line of Bill McNamara from Evercore ISI.

It's Bill on for Kirk. I guess how are you thinking about the cadence of share repurchases in 2026? And I guess, particularly in the context of your broader capital allocation priorities?

Yes. I mean, this is Brad. Sorry. As we've discussed before, I mean, the share repurchase program is something that we're not going to comment on. It's on a schedule and it kind of runs independently of day-to-day decisions. But we continue to think that repurchasing our shares is a really accretive use of capital. And so that's why we upsized the program last fall, and we continue to be active there.

Appreciate it. And then in your customer example featuring the EverHealth AI Scribe alongside integrated payments for an orthopedic practice, how should we kind of think about the adoption trends among medical professionals? And then if I could just tack on a follow-up to that, would you say demand for automated note taking is still in the early innings? And what do you believe differentiates your solution in a competitive landscape?

Thanks, Phil. I appreciate the question. I mean I think just moving backwards, the differentiation is that we've got a great integrated solution. We have a very robust road map across the rest of the year, and we have a significant base of customers to sell that integrated product that in terms of demand and need. From an efficiency gain perspective, we see that basically all of our provider customers at the SMB end of the market are going to need an integrated solution. So we see the opportunity as being very large.

When you think about kind of ARPU expansion kind of to your first question, if you look at Scribe like an average payments customer, you're talking about acceleration in ARPU of nearly 100% if we add both of those products and kind of attach full share of wallet on the payment side. So it doubles the customer ARPU over a period of time. And when you think about kind of the growth algorithm for EverHealth getting -- and Matt touched on this with Service Fusion and ZyraTalk, getting customers to buy DrChrono or CollaborateMD and then attach payments and attach Scribe over a period of time give us a huge opportunity to accelerate revenue from existing customers.

I'm not showing any further questions at this time. I would now like to turn it back over to Eric Remer for any closing remarks.

Thank you again for joining our call today. We remain focused on executing our strategy, which we believe positions us well for sustainable long-term growth and shareholder value creation. I'd like to thank our investors for their continued support and all of the EverCommerce employees for their hard work. Operator, this concludes our call.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Thank you for standing by, and welcome to EverCommerce's Fourth Quarter 2025 Earnings Call. My name is Josh, and I will be your operator for today. [Operator Instructions] As a reminder, this conference call is being recorded today, March 12, 2026. And I would now like to turn the conference over to Brad Korch, SVP Finance and Head of Investor Relations for EverCommerce. Please go ahead.

Good afternoon, and thank you for joining. Today's call will be led by Eric Remer, EverCommerce's Chairman and Chief Executive Officer; and Ryan Siurek, EverCommerce's Chief Financial Officer. This call is being webcast with a slide presentation that reviews the key financial and operating results for the 3 months ended December 31, 2025. For a link to the live or replay webcast, please visit the Investor Relations section of the EverCommerce website, www.evercommerce.com. The slide presentation and earnings release are also directly available on the site.

Please turn to Page 2 of our earnings call presentation while I review our safe harbor statement. Statements made on this call and contained in the earnings materials available on our website that are not historical in nature may constitute forward-looking statements. Such statements are based on the current expectations and beliefs of management. Actual results may differ materially from these forward-looking statements due to risks and uncertainties that are described in more detail in our filings with the SEC. We undertake no obligation to publicly update or revise these forward-looking statements, except as required by law.

We will also refer to certain non-GAAP financial measures in our comments today. A reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and our earnings call presentation. As a quick reminder, last quarter, we announced that we had closed on the sale of the Marketing Technology business. Our commentary today will center on the continuing operations of our business focused on our EverHealth, EverPro and EverWell verticals. All financial and operating metric results are presented relating to continuing operations only unless otherwise specified.

I will now turn it over to our CEO, Eric Remer. Please continue.

Thank you, Brad. On today's call, I will highlight fourth quarter and full year 2025 results and share some exciting AI developments across our company, including a deeper dive within our Ever health vertical before turning the call over to Ryan to discuss our financial performance in more detail. 2025 was a year of tremendous positive change for EverCommerce. We entered the year having just begun to stand up the vertical business units for EverHealth and EverPro. And throughout the year, we're focused on product, people process and technology improvements across our business to better serve our customers and drive shareholder return.

From an orgational standpoint, we ended 2025 with robust functional organizations in both EverPro and EverHealth that each had enhanced core competencies in the areas of product strategy and development, customer experience and go-to-market among others. In 2025, we sold our Market Technology Solutions business that have been [indiscernible] to both growth and predictability. We acquired Xyrotoc, which has proven to be a strong foundation for our current and future AI product initiatives. We deployed nearly $85 million of capital to repurchase 8.2 million shares of our common stock, and we repriced and extended our credit facility.

In the midst of all of this positive progress and change across multiple aspects of our business, we met or exceeded our financial targets for the year, demonstrating our continued focus on financial performance. During the fourth quarter, EverCommerce generated revenue of $151.2 million, above the midpoint of our guidance range. representing a 5.2% year-over-year growth. Adjusted EBITDA for the quarter of $44.2 million beat the top end of our guidance range, representing a 29.2% margin. I'll expand more on our cross-sell motions in a few moments, but throughout 2025, we saw accelerated leading metrics compared to 2024.

Finally, we repurchased 2.5 million shares for $24.8 million during the quarter. EverCommerce is building the AI operating system for service SMB workflows. We offer tremendous value to our customers by providing the system of actions necessary to run their businesses with tailored unique workflows. We provide end-to-end solutions to more than 745,000 customers across our 3 major verticals. EverPro for home field services, EverHealth for medical practices and EverWell for wellness service providers with the 2 former verticals representing approximately 95% of consolidated revenue.

Our large base of customers represents an immense embedded opportunity to provide value-added features and services like payments and customer rebates through our purchasing programs. On a pro forma basis, for the last 12 months, we generated $591.7 million in revenue, representing 6.4% year-over-year growth. We also generated 30.7% adjusted EBITDA margin on an LTM basis. Finally, our annualized total payment volume, or TPV, expanded to $13 billion. There's been a lot of market discussion about the impact in AI and software companies over the past several months. We see this moment in time as an opportunity to accelerate growth of advancements for our customers as well as our own operating leverage.

We are in the business of simplifying and empowering the lives of business owners whose services support us every day. This has been a mission statement for EverCommerce since its inception. When you look deeper at who our customers are, almost by cognition, they are subscale operations, plumbers, HVAC technicians, electricians, health care providers and salons that range from pure sole proprietary to one who's at the handful of employees. AI is not just an add-on for these customers. AI does not just save time or automate manual processes. AI is a force multiplier for our customers, providing a variety of growth opportunity and efficiencies.

For example, an AI-based 24-hour receptionist that can schedule jobs is not replacing human receptionist, but instead [ atlasing ] an inbound call function that didn't exist. Outbound calling can generate new business. Billings and collection agents can run in the background to improve collections and working capital. Embedded ambient scribe increases time with patients in the exam room, and there are many more examples. Because we view AI to be such an important value-creation driver for our customers, we have transformed our own business with an AI first focus. We are not just bolting on third-party capabilities to our existing solutions. We are building native AI agented features into our platforms.

We are reimagining workflows and making significant investments to be at the leading edge of AI capabilities for our customers. The acquisition of ZyroTop was a step function move towards this goal, but our efforts began ahead a bit and will continue for many years to come. Last quarter, we highlighted many of the live and in development capabilities at EverPro. In a moment, I will highlight the same for EverHealth. As a reminder, our customers are small trades and small medical practices looking for simple yet vertical specific workflows needed to run their businesses. Our small business customers are not likely to buy code their own solutions and the hands-on service our customers provide are not likely to replace with AI.

Further, we believe our targeted deep micro vertical specific expertise and embedded base of more than 745,000 customers puts EverCommerce in the driver's seat to be the natural provider of agentic capabilities within the system of actions they already buy from us. Our solutions are affordable with 93% of our customers spend less than [ $2,000 ] per year, we expect to both empower our customers with AI accelerants in their business and provide a path for continued ARPU acceleration in ours. Bottom line, we view AI as an enabler and an accelerator, not a threat. We are already providing AI-powered revenue acceleration and better workflow capabilities to our customers.

But it's just beginning with many more features in development. Looking inward for a moment, we will continue to use AI tools in our own operations, which we believe are table stakes in today's world to drive efficiency, speed and cost savings. Turning to EverHealth. AI is becoming a core component of EverHealth platform, enabling providers to automate administrative work, improve clinical workflows and enhance financial performance. Within our core solutions, we're introducing AI-driven documentation capabilities that reduced documentation time for visit, surface structure and clinical insights and support better diagnostic decisions.

The goal is simple, give physicians more time with patients while improving consistency and reducing administrative burden. Market has ever held scribed to customers. It has already received a 99.1% satisfaction rate. Across a broad set of customers, we're seeing an average documentation time savings of 8 minutes per patient. We're also applying AI to patient scheduling, intelligent no-show prediction, automated call routing and self-service booking tools can help practices optimize appointment utilization while improving patient access and reducing staff workloads.

We have already rolled out a no-show predictor to over 675 providers, resulting in increased revenue capture for our customers of around $1,000 per month per provider due to a 60% reduction in the patient notional rate. On the revenue cycle side, we're building an intelligent revenue cycle management and building capabilities, including automated coating support, claim scrubbing and AI-driven rejection analysis which helps providers improve collection rates, reduce denials and accelerated payment cycles. Another important area is integrated patient communication. AI assist message triage and smart document analysis allow practices to respond to patients faster, while embedding workflow recommendations directly into the platform.

Across all of these capabilities, the common strategies that AI is embedded directly into the workflow, helping our approximately 100,000 health care providers operate more efficiently and focus more time on care delivery. And internally, across our verticals, we're also deploying AI across sales enablement, customer smart automation and product development to drive structural leverage, improve workforce signing and continue optimizing our cost structure.

Overall, we see AI as a major opportunity to enhance the value of EverHealth platform while driving meaningful efficiency gains for providers. Enabling customers to multiple solutions remains a key driver of growth for EverCommerce, multi-solution customers generate higher revenue, demonstrate stronger retention and expand wallet share over time. Our strategy focused on enabling payments at the point of initial SaaS sale while also drive cross-selling to our existing customer base, investments in onboarding automation and customer success are helping accelerate activation and utilization.

At the end of the fourth quarter, 286,000 customers were enabled more than 1 solution, reflecting a 26% year-over-year growth. At the end of the fourth quarter, approximately 121,000 customers were actively utilizing more than 1 solution, reflecting that 32% year-over-year growth. Enabling customers to more than 1 solution is the first step in the funnel that leads to increased revenue, retention and ultimately profitability of these customers. We continue to focus the majority of our efforts in the front book attach or the enablement of payments at the point of initial SaaS sell, but we're all focused on our backward cross-sell motions. We are expanding our customer success capabilities to boost both activation, retention and wallet share. and we've streamlined and improved our onboarding workflows.

Over the trailing 12 months, net revenue retention was 96% with multi-solution customers continue to generate NRR above 100%. For each of the past several quarters, we've highlighted outsized payment revenue growth in our fastest-growing solutions. Our top 6 solutions, TPV grew 17.4% year-over-year and now represents 36% of total TPV, up from 32% in the fourth quarter of 2024. Comp solution payment revenue grew 5.9% year-over-year, now representing over 45% of total payment revenue. Highlighting the payment performance in our growth solutions is important because this is where we focus our investments.

The improvements in cross-sell metrics I highlighted a moment ago are largely due to the gains in our top 6 solutions. The remainder of our payment business drives meaningful cash flow generation at lower growth. As a reminder, we report payments revenue on a net basis, and therefore, it incrementally contributes approximately 95% gross margin within our core solutions. As such, payment revenue growth is a meaningful contributor to our overall adjusted EBITDA margin expansion.

Before I turn to our fourth quarter results, I want to briefly address the leadership update. We are excited to announce that Matt Feierstein, EverCommerce President has added the role of EverPro's CEO. Matt has been deeply involved in EverPro's strategy and operations plan for many years. With the foundational work of EverPro transformation behind us, that is uniquely positioned with more than 16 years at EverCommerce and deep expertise in Sasan payments to focus on execution and growth across the EverPro business.

Now I'll pass over to Ryan, who'll review our financial results in more detail as well as provide first quarter and full year 2026 guidance.

Thanks, Eric. Total reported revenue in the fourth quarter was $151.2 million, up 5.2% from the prior year period. Subscription and transaction revenue, our primary recurring revenue base was $144.1 million, Pro forma revenue adjusted for the acquisition of Xyretok, which closed in Q3 2025 was $591.7 million on an LTM basis, an increase of 6.4% and $151.2 million for the quarter, an increase of 4.6%, both on a year-over-year basis. Adjusted gross profit in the quarter was $117 million, representing an adjusted gross margin of 77.5%. Fourth quarter adjusted EBITDA was $44.2 million, which was flat year-over-year with an adjusted EBITDA margin of 29.2%.

We've expanded margins by about 470 basis points since 2023, reflecting continued operational discipline and efficiency improvements. Now turning to adjusted operating expenses, which are reconciled in the appendix of this presentation. For the quarter, adjusted operating expenses were relatively flat year-over-year as a percentage of revenue. increasing slightly from 47.6% to 48.3%, representing targeted growth investments across our sales and marketing functions. For the LTM period, as a percentage of revenue, adjusted operating expenses improved from 48.6% to 46.9%.

Next, I'll turn to some key liquidity measures, which include cash flow from operations. We continue to generate significant free cash flow as we invest to grow our business and invest in our AI-first products. As a reminder, cash flow metrics presented include both continuing and discontinued operations for all periods presented. Cash flow from operations for the year was $111.5 million as compared to the prior year of $113.2 million. The fourth quarter 2025 was impacted by the removal of our Marketing Technology Solutions business as a result of this sale on October 31, 2025.

Levered free cash flow for the year was $79.6 million as compared to the prior year of $94.3 million, a reduction of $14.7 million, which includes an increase in capitalized software costs of $12.2 million related to our strategic capital investments in product. Adjusted unlevered free cash flow for the year was $130.5 million as compared to the prior year of $134.5 million. The consolidated increase in adjusted EBITDA for the year was offset by increases in transaction-related and other nonrecurring costs and capitalized software for investments.

We ended the quarter with $130 million in cash and cash equivalents and $155 million of undrawn capacity on our revolver, which will step down to $125 million in July 2026. As of December 31, we have $527 million of debt outstanding. Our total net leverage, as calculated for our credit facility was approximately 2.2x and continues to demonstrate our deleveraging from strong operational performance and free cash generation. We have $425 million of notional swaps at a weighted average rate of 3.91% that effectively hedge the floating rate component of our interest cost through October 2027.

Our long-term debt does not mature until July 2031, while our undrawn revolver capacity provides availability through July 2030, providing us with one way and financial flexibility for the foreseeable future. In terms of capital allocation, in addition to our focus on AI-first investments, in the fourth quarter, we repurchased approximately 2.5 million shares for $24.8 million at an average price of $9.91 per share based on the shares repurchased through December 31, 2025, we have approximately $47.7 million remaining in our total repurchase authorization of $300 million through the end of 2026.

I'd now like to finish by discussing our outlook for the first quarter and full year of 2026. For the first quarter of 2026, we expect total revenue of $145.5 million to $148.5 million, and adjusted EBITDA of $39 million to $41 million. For full year 2026, we expect revenue of $612 million to $632 million and adjusted EBITDA of $183 million to $191 million. Our guide assumes typical seasonal performance with certain portions of our business that result in stronger second and third quarter growth. We expect continued investment in areas that drive additional growth in the latter portion of the year, which include the AI-based features Eric discussed, our payments enablement investments as well as our investments in our go-to-market organization.

A key focus for 2024 and 2025 was transformation and optimization. While optimization becomes a standard practice, 2026 is about executing our playbook for durable growth by delivering enhanced customer experiences through AI-based products and workflows, go-to-market efficiencies and continued operating leverage via operational excellence. While we don't provide specific cash flow guidance, I'd like to note that with the successful sale of the Marketing Technology business, we expect less seasonal variability in cash flow from operations, with the caveat that our first quarter is historically burdened by higher cash outflows as compared to other quarters.

As we begin the question-and-answer session, I'd like to welcome Matt Feierstein, EverCommerce's President and the CEO of EverPro as well as Evan Berlin, the CEO of EverHealth to join us. Operator, we are now ready to take the first question.

[Operator Instructions] And our first question comes from Alex Sklar with Raymond James.

Great. First one, maybe Eric or Matt, but just since you're building some of the more agentic functionality and you've got [indiscernible] in market. Can you talk about what you've seen from a customer appetite some of these solutions. And I realize there's some variety across the capabilities in your end markets. But how demonstrable have been -- the ROI has been of what you have in market today in terms of helping drive adoption? .

Thanks for the question. I think we'll give a quick all give some EverPro the Mac. I mean, Ethecon talk about some of the penetration and interest we've seen with some of the AI integration and betterment that we have in overheat as well. Matt, you want to kick off.

Yes, sure. Thanks for the question, Alex. At Ever Pro, we really think about AI and our journey there in 3 phases, and I'm going to get to the -- your question about Xyratalk within my answer. First is the generative AI strategy that we've actually had in place for getting close to several years now embedded in workflow across our invoicing solutions across our customer experience solutions. And we've seen really nice uptake thus far from our customers in each of those spots, including some revenue acceleration in our customer experience solutions where we started first.

To your question about Xyratalk, Xyratalk is really as we think about the next pivot in our strategy from generative to voice. As I talked to the interaction layer there, we are excited about the progress that we've seen to date. We've seen earlier integrations with our first systems of actions that we've expected. And from an early sales perspective, the uptake has been as strong as we would have expected, but actually delivered earlier in the year. So again, nice progress from a Xyratalk standpoint.

And then third, we really think about the future of the Agentic platform that we're building out. Obviously, as Arata, we believe, gives us foundation for that. but we will be creating a centralized shared genetic platform across EverPro that really will scale agent capabilities across the portfolio and provide a lot of workflow automation for our end customers that ultimately we will monetize through premium feature add-ons, increased packaging pricing, stronger retention. And ultimately, we hope increased usage like payments driven by some of this automated job capture. So I'll pass it over to Evan for EverHealth.

Yes, Alex, thanks for the question. And Eric mentioned some of the metrics on the call and we have them in the presentation. I think the one call that I'd make on the AI scribe launch, which we put out a press release earlier this week on, we're still in beta going to general availability by the end of the quarter than in the first quarter. But we've been incredibly pleased with both the metrics that were mentioned on the call in terms of performance, and we actually have a wait list with hundreds of providers that are interested in paying for that feature and getting going once we go to general availability.

So quite pleased with the early progress and the rollout of that. We have a robust road map to continue to enhance [indiscernible] from that 1 specific workflow across the balance of the year.

Okay. Great color. I appreciate all that. Maybe for you, Ryan, just in terms of the 2026 growth outlook, a little above 5% at the midpoint, it's kind of faster than where you just exited the second half of '25. Can you just walk through some of those underlying assumptions as it relates to macro or NRR, new customer growth that are kind of underlying that growth cadence?

Yes. We feel -- sure. Thank you for the question, Alex. So I appreciate it. We feel good about the prospects for 2026. The assumptions that I outlined from a script perspective, really relate to looking at where we exited the year, which we felt great about in terms of beating the consensus and our guidance with regard to revenue from a quarterly perspective.

But then also the investments that we took out from an AI perspective, we really have focused in the latter half of '25 on those investments really from an AI point of view. We'll continue to do that in 2026, and we think that, that -- those investments with regard to the things that both Matt and Evan just talked about will assist from a reacceleration perspective as we get through the rest of the year. So that's incorporated into the first quarter guide as well as our full year guide from a revenue perspective.

Our next question comes from Eric Gibson with Citizens.

Great. First one, I want to ask on payments revenue. It decreased from $29.4 million in 4Q '24 to $29.1 million in 4Q '25. Given the breakout of your top 6 payments solutions this quarter which grew 6% year-over-year and the payments revenue from other solutions, which declined about 6.5% year-over-year. How should we think about that year-over-year decline? Is any of the decline in the non-top 6 solutions related to the Martech divestiture? Or is there something else going on there? .

Yes. Thank you for the question. I appreciate it. Really not much in the way of payments revenue associated with Martek, so that's really not part of the automation. The reason we gave the breakout in the slide and the dynamics is because there's really kind of 2 parts, if you will, of our portfolio. We have a mature portfolio that is strongly cash flow generating and allows us to continue to generate good cash flow from payments to fund other investments, and then we have a growth part of our portfolio, which is why we focus in on the top 6 solutions. That's where our time and effort, energy and prioritization are focused in terms of the payments funnel for enablement utilization, attach rate, making sure that our SaaS customers come on board, we're working to get them on board as quickly as possible.

That's all part of the investments that we're making from a strategic perspective. So that is all kind of part and parcel to where we came out from a revenue perspective in totality. You'll see at the top 6 solutions that we described that's closer to 6% revenue growth on those, but it's based off of a TPV growth of more than 17% on a year-over-year basis.

Understood. And then the second one is more high level. but much has been made about the end of the application software layer, at least the devaluing of the application software layer. What are the most important modes you see for your business as adoption of agentic AI accelerates in the coming years?

Yes, I can certainly start from an EverPro's perspective. When we think about Xyratalk is the driver of our kind of voice AI layer. We've got millions of minutes of home and field services conversations that, again, I won't call it a moat, I'll call it an advantage, in terms of data that we can use to train interaction and ultimately more successful engagement from that AI agent. So we certainly look at that as an advantage.

The other thing we think of from an advantage standpoint, is really our deep niche vertical expertise that comes in our workflows and in the data that we have around our customer base in those niche verticals. And so those -- looking at those 2 things together and playing that through the future agentic platform, I think those are advantages that EverPro will have with our customers and our ability to to augment our existing products with these agents and ultimately drive growth for our customers and for us.

And I think, Aaron, thanks for the question. It's a great one. Obviously, super timely. I think Matt nailed it well. I think a lot of us the same core themes are applicable Batra Health. A couple of things I'd add. The fact that we've got 100,000 plus customers in EverHealth is quite important in terms of an advantage for us to be able to build the embedded workflows that make our practices and our providers more efficient, drive revenue predictability for them, give them the opportunity to spend more time with patients and drive better clinical outcomes. At the end of the day, if we can do that, they're going to rely on us as a core vendor and service provider and really partner to power their practice. I think the other thing is this is a highly regulated industry and ultimately, our ability to deliver a digital end-to-end solution.

Obviously, this compliance is a huge advantage for those customers and obviously, table stakes when they go to select a solution.

Our next question comes from Bill McNamara with Evercore ISI.

This is Bill on for Kirk. If we could touch on the 600 customers currently using the no-show prediction tool, what level of incremental revenue per customer are you seeing? And how should we think about that magnitude and durability of that lift over time? .

Yes. Thanks, Bill. This is Evan, great question. I think for that particular workflow, today, it is not a feature that we're pricing a la carte. It's included in our packages. But I will tell you for the products where we've rolled it out, we're in the midst of rolling out an updated package set, which will have increased prices. So as we add new features even if they're not monetized individually or from an a la carte standpoint, the overall ASP of new practices purchasing our EverHealth solutions is going to go up. So from that perspective, for that particular feature, that's how we see the monetization moving forward.

[Operator Instructions] Our next question comes from Matt Hedberg with RBC.

It's Dan Bergstrom for Matt Hedberg. Just to build off an earlier question, looking at guidance for the first quarter and for the year, it implies building seasonality through the year as you talked to in the prepared remarks. Maybe what are some confidence points around this? And then could you help us with the step down from Q4 as well? .

Yes. Can you repeat the last part of your question? When you said help us with what? We didn't hear that one.

Yes. I think Q1 guidance is lower than the Q4 revenue number. So just... .

I want to make sure. Yes, we -- Q4 was a good quarter for us, and we continue to look at that in the context of the growth on a sequential basis, but also on a year-over-year basis. Q4 grew from $148 million to $151 million. Q1 typically from a seasonality perspective is lower as we talked about in the script, Q2 and Q3 are usually better from a seasonal perspective overall. But we're also stepping off of Q4 in totality looking into the rest of the year as we make continued investments in payments, and it's also in our go-to-market strategy.

So we're making deliberate execution decisions at this point in time. And that's in part the things that we're focused in on from a Q1 perspective as we head into the rest of the year. We do expect reacceleration from Q1 through the rest of the year. That's also part of the full year guide from a revenue perspective. And then from an adjusted EBITDA perspective, you'll see that we're expecting margins to be strong over 30%, but we expect to make continued investments in the AI platforms that we've just recently discussed as well.

That's helpful. And then you see EverHealth scribe and beta here. I guess could you help think of the timing around the AI product road map rollout for Pro and health? .

Yes, I can start. Thanks for the question. From a scratch standpoint, we'll be in general availability by the end of the quarter, so in the next few weeks. We have a robust road map of features that are either in market as we talk -- as Eric had talked about on the call in his prepared remarks and/or are in development and will be rolled out across the year. So look for us to add continue to context across that, including metrics performance and monetization across 2026. But we're excited about the progress thus far and even more excited about what's to come.

Yes. And from an EverPro perspective, obviously, some of our generative components hit the market. And in the past year, some of them just rolled out at the end of Q4 into Q1. From an AI voice reception standpoint, as I mentioned, earlier traction with one of our core systems of action of getting that integration released and out to market, but the majority of the rest of the systems of action from a voice reception standpoint, we expect in H2 and actually hope to beat that to market. And then as I spoke to, really, our shared agenetic platform is a back half of H2 component as well. .

Thank you. I would now like to turn the call back over to Eric Remer for any closing remarks.

Thank you for that. Thank you again for joining the call today. As we look ahead to 2026, we remain focused on embedding AI across our platforms, expanding payment adoption and continue to drive operational efficiency. We believe these initiatives position EverCommerce to deliver durable revenue growth and strong free cash flow generation over time. I'd like to thank our investors for their continued support and all of the EverCommerce employees for their hard work. Operator, this concludes our call.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Thank you for standing by, and welcome to EverCommerce's Third Quarter 2025 Earnings Call. My name is Jonathan, and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded today, Thursday, November 6, 2025.

And now I'd like to turn the conference over to Brad Korch, Senior Vice President and Head of Investor Relations at EverCommerce. Please go ahead, sir.

Good afternoon, and thank you for joining. Today's call will be led by Eric Remer, EverCommerce's Chairman and Chief Executive Officer; Josh McCarter, EverPro's Chief Executive Officer; and Ryan Siurek, EverCommerce's Chief Financial Officer. Joining them for the Q&A portion of the call are EverCommerce's President, Matt Feierstein; and EverHealth's Chief Executive Officer, Evan Berlin.

This call is being webcast with a slide presentation that reviews the key financial and operating results for the 3 months ended September 30, 2025. For a link to the live or replay webcast, please visit the Investor Relations section of the EverCommerce website, www.evercommerce.com.

The slide presentation and earnings release are also directly available on the site. Please turn to Page 2 of our earnings call presentation while I review our safe harbor statement. Statements made on this call and contained in the earnings materials available on our website that are not historical in nature may constitute forward-looking statements.

Such statements are based on the current expectations and beliefs of management. Actual results may differ materially from these forward-looking statements due to risks and uncertainties that are described in more detail in our filings with the SEC. We undertake no obligation to publicly update or revise these forward-looking statements, except as required by law.

We will also refer to certain non-GAAP financial measures in our comments today. A reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and our earnings call presentation. As a quick reminder, following our announcement in March that we are seeking strategic alternatives for the Marketing Technology solutions, we had classified Marketing Technology as discontinued operations.

Last week, we announced the sale of this business to Ignite Visibility. Our commentary today will center on the continuing operations of our business focused on our EverHealth, EverPro and EverWell verticals. All financial and operating metric results are presented relating to continuing operations only unless otherwise specified.

I will now turn it over to our CEO, Eric Remer. Please continue.

Thank you, Brad. On today's call, I will highlight both third quarter results and our recent acquisition of an AI Agentic platform that we believe will accelerate our AI development before turning the call over to Ryan to discuss our financial performance in more detail. During the third quarter, EverCommerce generated revenue of $147.5 million within the previously provided guidance range.

This represents a 5.3% year-over-year growth, both on a reported and pro forma basis as we fully lap the sale of the fitness solutions and the acquisition of ZyraTalk had an immaterial impact on the quarter. Adjusted EBITDA of $46.5 million beat the top of our guidance range, representing a margin of 31.5%.

Adjusted EBITDA margin expanded 140 basis points year-over-year. Payments revenue grew 6% year-over-year as we continue to invest in product and go-to-market motions to grow our total payments volume. The most exciting development in the quarter was the strategic acquisition of ZyraTalk, a best-in-class AI Agentic platform company, highly focused on the field service management industry, which will serve as the center of our AI acceleration efforts.

Finally, on October 31, we closed the sale of our marketing technology solutions to Ignite Visibility. As we continue to execute EverCommerce's transformation optimization program, we believe narrowing our focus to provide best-in-class AI-powered vertical software is the most effective path to maximize long-term growth, margin accretion and ultimately, shareholder value.

The completion of this transaction allows us to focus our energy and resources on our core SaaS and payments business. EverCommerce provides SaaS solutions for the service SMB economy. We offer tremendous value to our customers by providing system of actions necessary to run their business with tailored unique workflows.

We provide end-to-end solutions to more than 725,000 customers across our 3 major verticals, EverPro for home field services, EverHealth for physician practices and EverWell for wellness service providers, with the 2 former verticals representing approximately 95% of consolidated revenue.

Our large base of customers represents an immense embedded opportunity to provide value-added features and services like payments and customer rebates for our purchasing programs. On a pro forma basis for the last 12 months, we generated $585.1 million of revenue, representing a 7.6% year-over-year growth.

We also generated 31% of adjusted EBITDA margin on an LTM basis. Finally, our annualized total payments volume, or TPV, expanded to approximately $13 billion. As I've highlighted in the past, accelerating payments adoption and utilization continues to be one of our highest priorities.

In 2025, we have continued to make specific investments in our product capabilities and go-to-market motions to prioritize payments enablement, activation and utilization. Our results for the third quarter show continued progress against this goal with strong growth in both payment enablement and utilization.

At the end of the third quarter, 276,000 customers were enabled for more than one solution, reflecting a 33% year-over-year growth. At the end of the third quarter, approximately 116,000 customers were actively utilizing more than one solution, reflecting a 32% year-over-year growth.

Enabling customers to more than one solution is a first step in the funnel that leads to increased revenue, retention and ultimately profitability to these customers. We continue to focus the majority of our efforts on the front book attach or the enablement of payments at the point of initial SaaS sale, but we also focus on our back book cross-sell motions.

We are expanding our customer success capabilities to boost activation, retention and wallet share, and we've streamlined and improved our onboarding workflows. In the third quarter, our front book attach rates in our 2 flagship system of actions within EverPro and EverHealth verticals were both greater than 60%, which represents significant year-over-year improvements.

Looking back over the trailing 12 months, our annualized net revenue retention, or NRR, was 97%. Customers that purchase and utilize more than one solution are naturally some of our most profitable and stickiest customers with an NRR of greater than 100%.

Year-over-year, our payments revenue grew 6% and accounted for approximately 21% of overall revenue. As a reminder, we report our payments revenue on a net basis, and therefore, it incrementally contributes approximately 95% gross margin. As such, payments revenue growth is meaningful contributor to our overall adjusted EBITDA margin expansion.

As I mentioned in my introductory comments, third quarter estimated annualized total payments volume, or TPV, was approximately $13 billion, representing nearly 5.2% year-over-year growth.

Within this, we continue to see higher TPV growth in our Top solutions, offset by lower growth in legacy payment products and third-party partners. This can be a positive mix shift over time as our top solution often have higher take rates.

In mid-September, we announced the acquisition of ZyraTalk, an AI-powered customer engagement solution that combines virtual assistant capabilities with an Agentic automation platform. The acquisition helps to establish EverCommerce's position as an AI-driven innovator, beginning with intended near-term application in our home and field service vertical, EverPro.

We plan to extend into broader opportunities across the company. I will now turn the call over to Josh McCarter, CEO of EverPro, to discuss ZyraTalk in more detail. Josh?

Thanks, Eric. ZyraTalk transforms how businesses operate by replacing outdated processes with intelligent end-to-end AI workflows. The platform is an AI-powered customer engagement solution that combines virtual assistant capabilities with Agentic automation, primarily serving the home services industry and capabilities for serving our other verticals.

Its AI receptionist ensures that no call, lead or customer interaction is ever missed, while the Agentic AI capabilities integrate deeply with FSM platforms to automate the core of daily operations.

To date, the platform has processed over 2 million chats and 2 million minutes of voice interactions through its integrations with major FSMs. The fully autonomous AI agents and a lightweight Agentic FSM system are designed for seamless integration across EverPro's platforms.

The acquisition brings AI at scale to EverCommerce with many in-production features that are both being sold to third-party customers today and being fast tracked for multiple EverPro native integrations over the coming months. Some of the key features available today are the AI Receptionist, AI Scheduler and AI Dispatch.

The AI receptionist answers inbound inquiries instantly, books jobs, answers questions and routes calls 24/7, just like a front desk that never goes offline. AI Scheduler allows customers to book, reschedule or cancel appointments any time by phone or online.

The AI Dispatcher automatically assigns the right technician to the right job based on skill, location and availability, keeping field teams efficient without human oversight. These and the additional features shown on the slide automate the full workflow from first contact to final payment, improving response time, reducing labor and helping to drive revenue.

Beyond this foundation, we are working to add more features and offerings to support our customers, beginning in our home and field services solutions. In addition to the full integration into many EverPro systems of action, we are actively developing new Agentic capabilities that should roll out over the next 12 months.

These include an AI project manager that keeps every job on track from first call to final review, updating customers and tech automatically. We're working on an AI training and QA agent that listens to calls and gives real-time coaching to technicians like a built-in quality manager.

We plan to utilize the underpinnings of our Service Nation platform to deliver an AI business coach. And of course, we are planning to use the Agentic capabilities to better onboard customers to our payments and rebates platforms.

Together, these upgrades significantly improve the customer experience by bringing AI capabilities with full end-to-end automation, boosting efficiency and revenue without adding headcount.

Thanks, Josh. ZyraTalk is a strategic AI investment that will help drive our long-term growth while delivering greater value to our customers. The acquisition brings us a production-ready AI platform, a highly skilled technical team and a proven technology that's purpose-built for the service-based industries.

Our customers, by definition, are subscale operators, plumbers with a truck or three, small physician practices and solo salon operators. To them, AI is a force multiplier, harnessing the power of AI provides them a 24-hour receptionist, a billing department and the not-so-distant future, a personal coach.

We plan to leverage the AI and the capabilities acquired to increase the value proposition across all aspects of our solution set. Now I'll pass it over to Ryan, who will review our financial results in more detail as well as provide fourth quarter and updated full year 2025 guidance.

Thanks, Eric. Total reported revenue in the third quarter was $147.5 million, up 5.3% from the prior year period. Subscription and transaction revenue, our primary recurring revenue base was $142.2 million. For Q3 2025, year-over-year pro forma subscription and transaction revenue growth was 4.4%.

Within subscription and transaction revenue, our core SaaS revenue grew over 8% in the quarter, partially offset by macro and tariff-related impacts in our more usage-based revenue streams such as rebates, which is our share of rebates through group purchasing programs within EverPro.

Adjusted gross profit in the quarter was $114 million, representing an adjusted gross profit margin of 77.3% versus 78.1% in Q3 2024. Third quarter adjusted EBITDA was $46.5 million, which is a 10.3% growth year-over-year. Adjusted EBITDA margins of 31.5% compares to 30.1% in Q3 2024, representing margin expansion of 140 basis points.

On a year-over-year basis, margins improved due to continued cost optimization initiatives, mix shift to higher-margin products and overall scale economies. Now turning to adjusted operating expenses, which are reconciled in the appendix to this presentation.

Overall adjusted operating expenses improved as a percentage of revenue, both for the quarter from 48.1% to 45.8% on a year-over-year basis and on an LTM basis from 48.6% to 46.7%. While the timing of investments and expenses was a factor, the long-term trend of continued operating expense moderation is deliberate and attributable to both growth of the business and specific actions taken as part of our transformation and optimization programs.

We maintain our focus on improvement in customer satisfaction and acquisition while also remaining highly focused on cost discipline and functional support areas. Next, I'll turn to some key liquidity measures, which include cash flow from continuing and discontinued operations.

We continue to generate significant free cash flow as we invest to grow our business. Cash flow from operations for the quarter was $32.5 million, improving from the $27.5 million generated in Q3 2024. Leveraged free cash flow was $23.3 million in the quarter and for the trailing 12-month period, we generated more than $111 million in levered free cash flow.

Adjusted unlevered free cash flow was $32.3 million in the quarter and $140.6 million for the last 12 months. As we continue to invest to accelerate growth, a portion of this investment is in our solutions. This is evident in our free cash flow metrics, which are largely flat year-over-year despite product investments, which increased our capitalized product development expenses.

We ended the quarter with $107 million in cash and cash equivalents and $155 million of undrawn capacity on our revolver, which will step down to $125 million in July 2026. Cash declined on a sequential quarterly basis, primarily as a result of our strategic acquisition of ZyraTalk during the quarter.

As of September 30, we had $528 million of debt outstanding. Our total net leverage as calculated for our credit facility was approximately 2.1x and continues to demonstrate our deleveraging with strong operational performance and free cash generation.

We have $425 million of notional swaps at a weighted average rate of 3.91% that effectively hedge the floating rate component of our interest cost through October 2027. In the third quarter, we repurchased approximately 2.6 million shares for $29.1 million at an average price of $11.10 per share.

Based on the shares repurchased through September 30, 2025, we have approximately $22.3 million remaining in our total repurchase authorization. In addition, our Board recently authorized an increase in our share repurchase program to $300 million, an increase of $50 million through the end of 2026.

I would now like to finish by discussing our outlook for the fourth quarter and the full year of 2025. As a reminder, our guidance for revenue and adjusted EBITDA for 2025 is based on our continued operations, which excludes Marketing Technology Solutions. Our guidance also includes ZyraTalk, but the expected contribution in the fourth quarter is immaterial.

For the fourth quarter of 2025, we expect total revenue of $148 million to $152 million and adjusted EBITDA of $39.5 million to $41.5 million. For the full year 2025, we are narrowing both our revenue and adjusted EBITDA guidance ranges with an increase to the top end of the adjusted EBITDA range. We expect total revenue of $584 million to $592 million and adjusted EBITDA of $174.5 million to $179.5 million.

Operator, we are now ready to take the first question.

And our first question comes from the line of Bhavin Shah from Deutsche Bank.

Eric, maybe just to start off with you. I just want to dig into the ZyraTalk acquisition, which kind of seems compelling to us. Can you just maybe talk a little bit more about the business model? Is it subscription consumption-based?

And over time, what percentage of your customer base do you think this will be suitable for as you think about the key solutions that you might attach to?

I appreciate the question. At a high level, we're not kind of breaking out the basis of kind of subscription versus integrated to the rest of the system at this point. As we look at the actual acquisition, there's really 2 main things that we're really excited about.

Number one, this particular product has been built fully -- like fully focused on the home service sector. So all of the data, all the minutes, all the calling that they have done over the last really 3 to 4 years has been fully focused basically to our customer base.

So it's a turnkey product that will allow to integrate almost real time, and we'll talk about the integration in a second. Secondly, a lot of the development that they have done within the ecosystem for the Agentic AI within their core product is going to be utilized across our core system.

So as we see the kind of the future of how those products come together, I think you'll start seeing in late '26 and '27, how that kind of integrates together versus a breakout of ZyraTalk's revenue separately. Want to add to that, Ryan?

I think with everything that Eric said, we plan to fully integrate. There is a book of business that comes with ZyraTalk. That wasn't our primary thesis though for the acquisition. The primary thesis was the integration that Eric just described in terms of the capabilities that it's going to bring to the SMB space, particularly in the home and field services.

But I would say that over time, we plan to expand to the other verticals that we have as well. And you should expect to see this kind of as bolt-ons or upsell, cross-sell motions as we continue to build out that strategy.

Got it. That's helpful there. Ryan, just kind of a follow-up for you. Just can you just maybe elaborate what played out with the rebate program? Can you just, I guess, think about the overall size of that program and kind of what's factored into guidance from that program as you think about 4Q?

Yes. I would say that, that was probably the one space that we had any particular headwinds in the business in Q3. The core SaaS business, as we described, is very resilient and strong, particularly in the SMB market. Rebates as a percentage of our overall revenue base is quite small, actually. But from the quarter-over-quarter perspective, there was about $1.6 million of softness. And the rebates are really just group purchasing programs that we have as part of our Service Nation program overall.

It's a good business for us, but it does actually have a little more susceptibility to the macroeconomic factors and tariffs in particular, were probably one of the areas where we saw some impact.

If you saw the HVAC manufacturers that released earnings earlier, there was a number of citings with regard to kind of softness in that space, not only for Q3, but some projection into Q4 with expected recovery in 2026.

That is kind of where we saw some of the softness in that space as well. But overall, I would say that -- and it's not a significant impact to the business. We did factor that into our overall guidance and don't expect a significant continuation.

And our next question comes from the line of Kirk Materne from Evercore ISI.

This is Bill on for Kirk. I was wondering if maybe you could walk us through, I guess, some of the changes to the guidance for the remainder of the fiscal year and kind of any trends you're seeing in the macro environment that have caused you to change your guidance?

I just gave certain information on that, Kurt. Thanks for the question. I'm trying to make sure I understood and heard your question. From a guidance perspective, no macroeconomic impacts other than one we described on the group purchasing programs, which really is a small portion of our overall revenue base.

From an SMB perspective, overall, we're continuing to see strength in the marketplace and our core SaaS continues to have strong growth opportunities. We've seen 8% growth really from a core SaaS perspective.

And then I would say that we continue to have really strong efforts in the transformation optimization side of what we're doing, which is why we felt very comfortable to increase our adjusted EBITDA guidance for the full year.

But we did tighten the range both on revenue and on adjusted EBITDA and taking into account some of those macroeconomic impacts that we talked about earlier.

And our next question comes from the line of Matt Hedberg from RBC.

Eric, I wanted to go back to the ZyraTalk acquisition. I just -- maybe it wasn't clear to me, but how is the pricing for that today? And do you see it evolving once it's fully integrated to the platform?

Yes. So just on a core basis, the product that they're in market with today sells both on a subscription and usage basis. So subscription by utilizing the product and usage every time, every minute that it's been utilized on an AI Receptionist. The reason the larger answer was really focused on that was a part of the thesis, but really kind of a smaller part of the overall thesis for the acquisition.

So as Ryan talked about, that we definitely brought over customer base and a book of business. And the real focus of us is the customer base that is utilizing that product today is actually just making our systems smarter and smarter.

So as we integrate ZyraTalk into the core EverCommerce solutions, which we've already done, and Josh can talk about that in a second, our ability to integrate that, the assist to start off and the other Agentic pieces of that software is going to make all of our software specifically the FSM area, just more effective on an ongoing basis.

So do you want to add to that, Josh?

Yes. I think from a pricing standpoint, we definitely view this as a SaaS model. So for the AI receptionist, we'll be selling that as a SaaS model. And then as Eric mentioned, we will be integrating various AI agents throughout our FSM systems, and that will just be reflected over time as increases in SaaS pricing.

Got it. Okay. That's helpful. And maybe just even just like more philosophically speaking, one of the questions about software has been -- what is the future of seat-based models in the future?

And I'm just sort of curious, you've got a blend today, and obviously, payments is a big part of that non-seat-based model. But do you see the future of EverCommerce pricing changing to look even more like consumption or usage and pivoting away from seats? Or do you always expect to have some sort of a blend there?

I think we would -- I mean we're going to continue with the existing pricing mechanisms that we have. We'll continue to evaluate the market space in general. I think our space from an SMB perspective is quite unique.

If we see the opportunity to do more in the variable type pricing as we think about the 2026 budget and beyond, we will definitely consider that. But it's not a strategic shift or focus from a change perspective in terms of how we run and operate our business.

[Operator Instructions] Our next question comes from the line of Alex Sklar from Raymond James.

This is Jessica on for Alex. Just got one. So on your spending optimization efforts, how have things been progressing there? Margins continue to track nicely in the right direction. But on the reduction of third-party costs you've called out in the past, how much more leverage do you see over the medium term?

Yes. We continue to find good success in our transformation optimization program. I would say that we've been able to reduce operating costs pretty substantially, over $10 million in 2025. We continue to have a really solid tracking mechanism against those efforts.

I think you're going to see us to continue the transformation optimization program that we have in place is not a one and done. It is something that we are kind of continuing to embed in the operating model that we have overall. We're at over 30% adjusted EBITDA margins at this point in time.

That's grown since the days of our IPO in the low 20% adjusted EBITDA margin, so over 1,000%. And we continue to see opportunity for us to expand on the overall margin expansion through the programs that we have, both for transformation and for optimization.

The management teams are stood up at this point in time, both for EverPro and EverHealth. And we feel like that is putting us in a solid position to continue to exit 2025 and grow in '26, but not just from a revenue perspective, and we'll continue to look for margin expansion as we move into the future.

I would say that the only thing that I would moderate on that is that as we continue to look at investment opportunities, we'll continue to focus to make sure that the products that we're offering to our customers have the right features and functionality. So we're going to continue to grow and invest in those.

And you can see that from a cash flow perspective in terms of the investment that we've made in capitalized software year-over-year. I think we invested on an LTM basis about $25 million compared to about $18 million in the prior year, which just continues to demonstrate our continued focus on developing products for our customers.

And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Eric Remer, CEO, for any further remarks.

Thanks. Well, thank you again for joining the call today. We have incredible momentum in our core SaaS and payment solutions, combined with meaningful margin expansion as we continue to optimize our cost base.

On top of this, there is tremendous excitement surrounding our AI road map that we believe will differentiate our solutions in the marketplace. I'd like to thank our investors for their continued support and all of our EverCommerce employees for their hard work. Operator, this concludes our call.

Thank you. And thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Thank you for standing by, and welcome to EverCommerce's Second Quarter 2025 Earnings Call. My name is Shannon, and I will be your operator for today. [Operator Instructions] As a reminder, this conference call is being recorded today, Wednesday, August 6, 2025. And now I would like to turn the conference over to Brad Korch, SVP and Head of Investor Relations for EverCommerce. Please go ahead.

Good afternoon, and thank you for joining. Today's call will be led by Eric Remer, EverCommerce's Chairman and Chief Executive Officer; and Ryan Siurek, EverCommerce's Chief Financial Officer. Joining them for the Q&A portion of the call is EverCommerce's President, Matt Feierstein; EverPro Chief Executive Officer, Josh McCarter; and EverHealth's Chief Executive Officer, Evan Berlin.

This call is being webcast with a slide presentation that reviews the key financial and operating results for the 3 months ended June 30, 2025. For a link to the live or replay webcast, please visit the Investor Relations section of the EverCommerce website, www.evercommerce.com. The slide presentation and earnings release are also directly available on the site.

Please turn to Page 2 of our earnings call presentation while I review our safe harbor statement. Statements made on this call and contained in the earnings material available on our website that are not historical in nature may constitute forward-looking statements. Such statements are based on the current expectations and beliefs of management. Actual results may differ materially from these forward-looking statements due to risks and uncertainties that are described in more detail in our filings with the SEC. We undertake no obligation to publicly update or revise these forward-looking statements, except as required by law.

We also refer to certain non-GAAP financial measures in our comments today. A reconciliation of non-GAAP to GAAP historical measures is provided in both our earnings press release and our earnings call presentation. As a reminder, following our announcement in March that we are seeking strategic alternatives for the Marketing Technology Solutions business, we have classified marketing technology as discontinued operations. Our commentary today will focus on the continuing operations of our business focused on our EverHealth, EverPro and EverWell verticals. All financial and operating metric results are presented related to continuing operations only unless otherwise specified.

I will now turn it over to our CEO, Eric Remer. Please continue.

Thank you, Brad. I'll begin our prepared remarks focusing on our strong results and trends before turning the call over to Ryan to discuss our financial performance in more detail. We had another strong quarter with financial results that exceeded guidance and solid progress on our key leading indicators. Our second quarter revenue exceeded the top end of our guidance range. Revenue increased 5.3% year-over-year but increased 7.4% year-over-year on a pro forma basis, which adjusts prior year for the sale of fitness solutions. Adjusted EBITDA of $45 million also beat the top end of our guidance range, representing a 30.4% margin. Adjusted EBITDA margin expanded more than 230 basis points year-over-year. Payments revenue, excluding the fitness solutions, grew 6.8% year-over-year. Finally, I'd like to highlight that at the end of July, we repriced and extended our credit facility, increasing financial flexibility and resulted in approximately $1.3 million in annual interest savings.

EverCommerce provides SaaS solutions for the service SMB economy. We offer tremendous value to our customers by providing the system of actions necessary to run their businesses with tailored unique workflows. We provide end-to-end solutions to more than 725,000 customers across our 3 major verticals: EverPro for home and field services, EverHealth for physician practices and EverWell for wellness, with the 2 former verticals representing 95% of consolidated revenue. Our large base of customers represents an immense embedded opportunity to provide value-added features and services like payments and customer rebates through our purchasing programs.

On a pro forma basis, for the last 12 months, we generated $574.1 million of revenue, representing 7.9% year-over-year growth, with subscription and transaction revenue growing 8.1% year-over-year. We generated a 30.7% adjusted EBITDA margin on an LTM basis.

Finally, our annualized total payment volume, or TPV, expanded to approximately $12.9 billion. Accelerating payments adoption and utilization continues to be one of our highest priorities, and in 2025, we are making specific investments in our product capabilities and go-to-market motions to prioritize payments attachments at the point of initial sale. These include product and capability investments to expand the addressable payments volume within our system of actions as well as go to market and sales resource to catalyze incremental enablement and utilization.

At the end of the second quarter, 261,000 customers were enabled for more than 1 solution, reflecting a 32% year-over-year growth. This is a 400 basis point acceleration in growth rate over the prior quarter's year-over-year growth rate. At the end of the second quarter, approximately 112,000 customers were actually utilizing more than 1 solution, reflecting 29% year-over-year growth. This is a 1,000 basis point acceleration in growth rate over the prior quarter's year-over-year growth rate. Enabling customers to more than one solution is the first step in the funnel that leads to increased revenue, retention and ultimately profitability for these customers.

As we've noted before, we began prioritizing attach at the point of initial SaaS sale. And in just a few quarters, we are seeing really good results. In the second quarter, we had record attach rates in our 2 flagship system of action softwares within our EverPro and EverHealth verticals.

Once customers are enabled, the next action item is for us to facilitate usage. In the case of payment, this is getting our customers to actively process on our platform. We measure this step in the funnel as utilization. Customers that purchase and utilize more than one solution are naturally some of our most profitable and stickiest customers. As we've illustrated in past earnings call, the effect of more customers taking payments or other add-on features and services is higher net revenue retention. Looking back over the trailing 12 months, our annualized net revenue retention, or NRR, was 97%. Year-over-year, our payments revenue on a pro forma basis grew over 6.8% and accounted for approximately 21% of overall revenue.

As a reminder, we report our payments revenue on a net basis, and therefore, it typically contributes approximately 95% gross margin. As such, payments revenue growth is a meaningful contributor to our overall adjusted EBITDA margin expansion.

As I mentioned in my introductory comments, second quarter estimated annual total payments volume, or TPV, was approximately $12.9 billion, representing nearly 7% year-over-year growth. Within this, we continue to see higher TPV growth at our top solutions, offset by lower growth in legacy payment products. This can be a positive mix shift over time as our top solutions often have higher take rates.

Now I'll pass it over to Ryan, who will review our financial results in more detail as well as provide third quarter and updated full year 2025 guidance.

Thanks, Eric. Total reported revenue in the second quarter was $148 million, up 5.3% from the prior year period. Subscription and transaction revenue, our primary recurring revenue base, was $142.8 million. For Q2 2025, year-over-year pro forma subscription and transaction revenue growth was 7.4%. The difference between actual and pro forma revenue growth rate is to present information on a comparable basis and is attributable to the removal of prior year revenue associated with the sale of our fitness solutions that closed in 2024. Within pro forma subscription and transaction revenue, pro forma payment revenue growth was 6.8%. The solid performance in subscription and transaction revenue was largely due to continued execution of our growth strategy to provide customers with our core system of action software solutions and driving expansion by promoting cross-sell and upsell opportunities, leading with payments.

Adjusted gross profit in the quarter was $114.6 million, representing an adjusted gross margin of 77.4% versus 77.5% in Q2 2024, relatively flat across the comparison period. Second quarter adjusted EBITDA was $45 million, which is 14% growth year-over-year. Adjusted EBITDA margins of 30.4% compares to 28.1% in Q2 2024.

Q2 year-over-year margin expansion of over 230 basis points was partially aided by the timing of certain expenses and investments with a portion of the favorability compared to guidance expected to be reallocated to the rest of 2025. On a year-over-year basis, margins improved due to cost optimization initiatives, mix shift to higher-margin products and overall scale economies.

Now turning to adjusted operating expenses, which are reconciled in the appendix to this presentation. Overall adjusted operating expenses improved as a percentage of revenue, both for the quarter from 49.5% to 47.1% on a year-over-year basis and on an LTM basis from 48.8% to 47.3%. While the timing of investments and expenses was a factor, the long-term trend of continued operating expense moderation is deliberate and attributable to both growth of the business and specific actions taken as part of our transformation and optimization program. We maintain our focus on improvement in customer satisfaction and acquisition while also remaining highly focused on cost discipline in functional support areas.

Next, I'll turn to some key liquidity measures, which include cash flow from continuing and discontinued operations. We continue to generate significant free cash flow as we invest to grow our business. Cash flow from operations for the quarter was $27 million, improving from $23.9 million generated in Q2 2024. Levered free cash flow was $18.9 million in the quarter and for the trailing 12-month period, we generated nearly $110.8 million in levered free cash flow. Due to the investments we are making in 2025, we see an impact in our levered free cash flow, primarily due to increases in our capitalized software spend year-over-year as we continue to enhance features, functionality as well as our enterprise support model.

Adjusted unlevered free cash flow was $34.9 million in the quarter and $143.7 million for the last 12 months, representing 16.2% and 18.8% year-over-year growth, respectively. We ended the quarter with $151 million in cash and cash equivalents and $155 million of undrawn capacity on our revolver. As of June 30, we had $529 million of debt outstanding. Our total net leverage as calculated per our credit facility was approximately 2x and continues to demonstrate our deleveraging from strong operational performance and free cash generation.

We have $425 million of notional swaps at a weighted average rate of 3.91% that effectively hedged the floating rate component of our interest cost through October 2027. In July, we repriced and extended our outstanding term loan for an additional 3 years through July 2031 and further reduced our interest cost by 25 basis points to SOFR plus 2.25%. In addition, we extended our $155 million revolving credit facility, which steps down in capacity to $125 million in July 2026 and continues through July 2030. The repricing on the term loan results in interest cost savings of approximately $1.3 million on an annualized basis and the extension of the term loan, and revolving credit facility provides financial flexibility.

In the second quarter, we repurchased approximately 2 million shares for $20.6 million at an average price of $10.01 per share. Based on the shares repurchased through June 30, 2025, we have approximately $51.1 million remaining in our total repurchase authorization.

I would now like to finish by discussing our outlook for the third quarter and full year of 2025. As a reminder, our guidance for revenue and adjusted EBITDA for 2025 is based on our continued operations, which excludes Marketing Technology Solutions. For the third quarter of 2025, we expect total revenue of $146.5 million to $149.5 million and adjusted EBITDA of $41 million to $43 million. For full year 2025, we expect total revenue of $581 million to $601 million, and we are increasing our guidance for adjusted EBITDA to a range of $171 million to $177 million.

Operator, we are now ready to take the first question.

Our first question comes from the line of Bhavin Shah with Deutsche Bank.

Congrats on the strong quarter. Eric, maybe just for you to start off, can you just maybe give us a little state of the union on where you are in terms of your transformation initiatives and how you guys think you're progressing against that?

Yes. When we talk about the transformation optimization, it's in -- many of those are ongoing scenarios that we can continue to look for opportunities, specifically in optimization, continue to gain more margin as we get more efficient across the organization. From a transformation perspective, it was really focused on really creating more energy and more focus within the BUs and the specific verticals, EverHealth and EverPro. Both our CEOs that we've talked about before, Evan Berlin and Josh McCarter, are both doing a phenomenal job building out organizations, building out full management teams, getting the kind of the teams closer to the end customer, which we're starting to see really positive results and efficiency and sales efficiency and marketing efficiency and other things that we really had expected to happen, and we're starting to see some of those green shoots happen already.

That's great. And just a quick follow-up for Ryan. Ryan, I think the second quarter in a row where you guys have exceeded the top end of your revenue guidance. Why not raise the rest of the year? Is there anything that you're seeing from a macro perspective or anything else we should keep in mind for the back half?

Yes. Appreciate the question. Thanks, Bhavin. From a macro perspective, things continue to trend well. We've talked about how we are relatively resilient overall in terms of the macro economy. And we'll continue to track that and look at it on a regular basis.

We felt comfortable raising the EBITDA guidance really because of the confidence we have in the back half of the year but also looking at some moderation with regard to the overperformance that we had in the first half of the year for investments and other things that we're doing really to continue to generate growth and acceleration in active programs like payments or cross-sell and upsell opportunities.

On the revenue side, it's really being prudent with regard to like what we see the back half of the year compared to the first half of the year. So at this point, we feel comfortable with both kind of the revenue -- remaining revenue guidance for the back half of the year as well as the raise on the adjusted EBITDA guidance.

Our next question comes from the line of Kirk Materne with Evercore ISI.

This is [ Bill ] on for Kirk. What are some of the embedded AI functionalities that you believe will enhance the overall customer experience of your software going forward?

Yes. I'll start in terms of things that we've actually done from an AI perspective, and then I'll pass it over actually to Evan and potentially Josh, who will talk about some of the things that we're considering. Over the last 18 months, and we've talked about this, we've launched AI-powered features across several of our product lines, including prospect marketing solutions and our customer engagement -- our customer experience solution. We've launched customer survey tools within our customer experience solutions. And really, those have helped us improve prospect targeting for the end customer, end customer engagement and actionable insights that our customers now have because of the embedded AI that we've put in those products. And AI advancement within our products is now a core part of our future product road maps really across all of our verticals. And I'll pass it over to Evan to start in terms of some thoughts at the EverHealth level.

Yes. Thanks, Matt. I think the features we've got embedded in the road map for the rest of the year are features that really help our customers be more efficient. So thinking about things in the clinical space like ambient scribe, appointment no-show predictors that help them just run a more efficient business. And then we have a full road map already built for 2026. So look for more features to be delivered across all of our core products within EverHealth.

Great. And then can you provide us -- do you have any early thoughts on the passage of the One Big Beautiful Bill in terms of tax implications?

Yes. I would say it's early for us in terms of the analysis of that. That's ongoing in terms of the implication. But we do think there'll be some benefits from limitations that previously existed from interest deductibility as an example. But on an ongoing basis, we'll have more to share, I think, in the coming quarter.

Our next question comes from the line of Matt Hedberg with RBC.

Congrats on another good quarter. I guess circling back on the revenue guide. You beat expectations on the top line for now 2 straight quarters and you maintained the full year guide. I can appreciate there's probably some conservatism from macros in there. But just making sure there's nothing else, like were deals pulled into the first half or anything that you sort of like flagged for the second half? Because it feels like you're coming off of a strong first half of the year.

First half of the year was strong, and we feel good about that. We didn't pull in anything unusual from a revenue perspective in Q1 or Q2. We're not planning to pull anything in necessarily from a Q3 or Q4 perspective either. We do a bottoms-up build, and we look at kind of all the different factors within each one of the solutions. As you know, we have some top solutions that are core to our systems of action as well as payments. And we also have a number of other important solutions as well. So it's, I would say, a relatively complex build, but we feel good about what we're setting for Q3 and Q4.

And yes, there is some conservatism. We like to call it prudence, but we want to make sure that we're not being overly aggressive in terms of what we're publishing. I think from our standpoint right now, we feel like what we're guiding towards is appropriate for both Q3 and Q4.

Got it. Okay. And then I wanted to follow up on AI as well. Last quarter, you talked not only about from a product perspective but using AI internally to just improve efficiency. I wonder if you can give a little bit of update there. And are you seeing any improvements, whether it's in R&D with code suggestion tools or sales and marketing, customer service? Any sort of anecdotal evidence that it could be driving either more efficiencies there or perhaps even better sales outcomes?

Yes, for sure. I'm going to focus on customer support. I think we have talked about this in the past, but that continues to be an area where -- again, still early innings with AI. So across all of our functions, we are actively leaning in an AI forward way to find efficiencies.

In customer service, specifically our customer support operation within mobile solutions at EverPro, we have deployed AI agents within our chat channel that are now resolving between 25% to 50% of all support tickets that come in depending on which solution within that mobile mix. It's got customer sat scores that are above 85% and generating some nice significant cost avoidance from that standpoint. And that is literally just across our chat channel. We're going to add e-mail and voice channel there, and we expect that impact to grow meaningfully.

So we are excited. It is still the early innings from a functional standpoint of that. Yes, from a product and engineering standpoint, from a digital marketing standpoint, from a people operations standpoint and from a financial systems and security operations standpoint, those are areas where we're actively testing and learning into the productivity gains and the efficiency gains from utilizing this technology company-wide.

Our next question comes from the line of Alexander Sklar with Raymond James.

This is John on for Alex. I wanted to dig in a little bit with the customers utilizing more than one solution. We've seen a really nice step-up in the amount of customers using more than one solution in 1Q and now again in 2Q. Do you think this upper single-digit, low double-digit thousand growth is the right cadence to think about moving forward? And then I have a quick follow-up.

Yes. I'd say we're obviously really pleased with the progress we've made. We're obviously not going to guide to growth percentages there. I think you heard Eric talk about, in his comments, the areas where we've obviously continued to make investments in product and technology and go to market to better enable that continued multiproduct take and ultimately utilization. Obviously, payments is more than 85% of that multiproduct enablement and utilization.

And also you heard Eric talk through across our core growth pillars in payments from attachment to activation to wallet share expansion, again, significant execution and investment in those areas just to continue to expand the value that we can provide to our customers in areas like attachment, launching something like Canadian processing capabilities at some of our solutions where we didn't have them, allow to access -- allow us to access an unaddressable part of the base that we had before.

In areas like wallet share expansion, really continuing to refine payments workflows within our systems of action and increasing ways to pay, mobile check capture, ACH payment, Google and Apple Pay support. These things add flexibility and also increase and really drive that merchant processing volume from where it was to where we believe it can be.

So again, really pleased with the progress we've made. Obviously, there is significant runway for us to continue to drive more utilization of second, third, fourth products into the base. And as we continue to integrate more of those products into our systems of action, we expect to do just that.

And just to add to what Matt said, as we've talked about a bunch, these are the leading indicators. These are the top of the funnel. And our job is to kind of continue to execute down funnel so we can increase revenue and increase retention. As more customers take more products, obviously, that grows revenue. And the more products an individual customer takes, it significantly increases retention as well.

Okay. Really good color there. And then can you maybe help frame the spread between the total payment volume growth we saw this quarter and that customers using more than one solution? Is there a lag there that we should think about as customers are enabled to use more than one solution and use payments? Or is there maybe some macro factors that are causing that -- a bit of the spread there?

Yes. We wouldn't call it macro. I think, again, as Eric explained, it is a funnel. And you start at the top of the funnel with attach, obviously, making nice significant strides there. Utilization comes next. Wallet share expansion comes there, so -- comes after that.

So there is a lag only in that you do need to take every single customer down that funnel in terms of enablement into utilization, into expansion. Secondarily, obviously, we've talked about this in the past. We have a pretty broad portfolio of solutions where we've integrated payments. Some of them are more mature legacy portfolios that are growing at a bit slower of a rate. Obviously, we've again talked about our top 5 payment opportunities where we have the most significant executional approach and investments. And those are growing at a much faster rate. The TPV there is growing between 12% to 13% from a year-over-year perspective. And many of those are less than 10% penetrated. So the opportunity is incredibly large. So yes, there's a lag from a funnel perspective, and again, we look to continue to grow through just some of the more mature legacy parts of the portfolio.

Our next question comes from the line of Aaron Kimson with Citizens.

Eric, you started this business as a payments company. Payments was 21% of revenue in the first half of this year, up from 17% in full year '24, obviously, is a big piece of the thesis going forward. Given the Circle IPO in June and all the subsequent investor attention that's gone into understanding the potential of stablecoins to affect payments revenue streams, how do you think about the potential for stablecoins to affect take rate or method of payment in your service-based SMB customer base over the medium and long term, if at all?

Well, appreciate the question. We are -- in terms of focusing on stablecoins and how it's going to affect our payment -- our current payment methods, I mean, that is not currently on the road map, quite honestly. We provide all -- many ways for our customers to get paid. And to date, there's been, I would say, anecdotally, not few requests. There's been 0 requests for things of that nature. So we will continue to become -- continue to be very focused on what our customers need, build products, build road maps based upon making sure that they get what they need to accept payments the way they need to, in addition to be able to provide their customers what they want.

So we will be responsive to the marketplace if and when that happens. But to date, that's -- it's not on the -- definitely not on the short-term road map. And I wouldn't even say midterm. Clearly, that can shift if the market sentiment shifts, but right now, that's not a core focus.

Got it. That's really helpful. And then, Ryan, can you talk about the improved visibility you have into the business as a result of the Mar Tech discontinuation and eventual divestiture when giving us guidance now? And maybe also what needs to go right to potentially accelerate back to a double-digit grower in the out years?

Yes. Appreciate the question, Aaron. Really, from a visibility perspective, I would say, for the most part, what we've taken out from a continuing operations perspective is seasonality -- or variabilities to seasonality. So it's much more linear. I think, overall, there is very little seasonality when you take out Mar Tech from the overall business. And I would say that like it just continues to refocus essentially where everybody is spending their time and effort, which is within EverPro and EverHealth and EverWell at this point in time.

We continue with the process on the Mar Tech side, and we will continue with the optimization efforts that we have. And I think you can see that coming through from our operating expenses as a percentage of revenue overall. If you look at the LTM on a basis of year-over-year analysis, we're going to continue to -- as we talked about it earlier, we have the transformation efforts. We have the optimization efforts. On the optimization piece, we intend to actually take costs out on an optimized basis, whether it's through AI or otherwise in order to make the continued investments for revenue expansion that we want to make going forward.

And I'm currently showing no further questions at this time. I would now like to hand the call back over to Eric Remer for closing remarks.

Well, thanks for that. Well, thank you guys for joining us today. Not only do we beat our headline expectations, we're also showing real positive momentum in our leading indicators. This is exactly what we set out to do, and I look forward to sharing our continued success in the coming quarters. Thanks again.

This concludes today's conference call. Thank you for your participation. You may now disconnect.