ESMT - Earnings call transcript Q2 2022

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Operator

Good morning and thank you for attending today’s EngageSmart Second Quarter 2022 Earnings Call. My name is Aaron and I’ll be your moderator today. Currently all phone lines are in a listen-only mode. Later there will be an opportunity to ask questions during our question-and-answer session. [Operator Instructions]. call Josh the of turn now over Schmidt to EngageSmart. I’ll Josh.

Josh Schmidt

call to Good company. quarterly today’s Officer. Chief morning, Chief you. Cassandra our Officer; With Bob and Executive and on public Thank Financial a welcome fourth Hudson, Bennett, as earnings me are call

found press earnings be presentation Form X-K and Our www.investors.engagesmart.com. associated supplemental can release, at

filings to section metrics other metrics, this we call, will non-GAAP regarding associated these Actual we and our more with SEC materially differ forward-looking factors non-GAAP could contemplated certain on call, discuss including for risks and adjusted be information by on information. risk this Form Factors During will from statements. as forward-looking these EBITDA. CEO, the and the annual metric our these press found GAAP report release nearest measures the the available both A the our over refer section would Investor Please being useful On on will results as of business. discussing of statements certain and Risk in information those reconciliation XX-K provide now live believes www.investors.engagesmart.com. to replay call regarding to website be supplemental available which of can This for like turn Relations webcast be well why on our are management earnings I is to our website. presentation, Bob our statements of Bennett. at call forward-looking

Bob Bennett

QX Good comprehensive everyone. our for yet Thank thank for to us introduction. morning, call results. succinct, you, our that Josh on joining And discuss you

of of XX.X% million, that yet adjusted EngageSmart our marked all XX% growth report quarter outstanding quarter. for by delivered $XX.X of profitability $XX excited EBITDA year-over-year representing expectations. to the and growth, are We is exceeded million, organic high which revenue another record revenue strong again and

customer strong the of dedication of with result true combined of XX% payments. model SMB’s with and Enterprise’s through client continued as execution our we growth the and growth of to of integrated is tailored strength SaaS reflects solutions business strong solutions year-over-year, teammates. excellent highly and durable our simplify our engagement success Our vertically year-over-year, XX% the

relentless customer satisfaction. pursuit are people in Our of their

Cassandra of some our like highlights. details this share I’d to of Before quarter’s into deeper financial dives the performance,

nondiscretionary of had also you payments continues our customer for such continued includes Salesforce In our largest the solution, see quarter more Partner impact pricing of to taxes our second older successful utility. excellent, provide quarter growth an in we the were several Product where go-live traction as as rebundling. now well our SMB of received expect, environment We fundraising events in our over continued delivered InvoiceCloud, finally, strength, quarter and more strong of practitioners our existing revenue from existing from packaging bills, in the customers results XX% best To in mix segment, our as segment, wellness on and first wellness SMB real and and another that health outstanding class enterprise solution mental the results as to full tie by XXX,XXX our it estate and posted customers. adoption for color great through Enterprise Of to award predominant from digital our with again customers. driven given to verticals. than segment, wins, for great relative continued was outstanding Year. And cohorts held new XX,XXX significant serve DonorDrive, XX our durability. showing The robust demand growth a show see ads, customer and offerings existing growth the and We might customers Nonprofit

large wellness The SimplePractice their core shortage in where by increase to industry. treat our traction, solve health problem uniquely to demand them positioned and its it to more with practitioners, mental patients. for as especially professionals, customers as administrative is this burdens, strain are to the the structure well our Our continues professional journey. offering put new health great a reduces SimplePractice, in aligns XXX,XXX three-tiered driven help is continues the on market. with treatment, in allowing successful experience of dramatically proving mental practitioner’s solution well

people with access solution is by networks, solution to our health we Monarch the our our and efforts program an from we to their ease an and pilot trying We those with patient insurance grow extension are of plans. SimplePractice EAP. that to in Our strain employers Monarch exciting Last find base. quarter, more a a practitioners, an their practitioners patients, program them employee care. fueling both exciting seeing professionals they who helping in mentioned for network and Monarch interest especially creates see and are drive flywheel to for opportunities launched to attracting assistance

more This quarter, with we signed contracts two EAPs.

a We’re develop pipeline space. to by encouraged progress continue our in robust and of opportunities this

You going to learn about by can more www.meetmonarch.com. Monarch

to our wellness specialties. other continued serve Beyond mental nine we health,

pathology, for speech because offer focus addressable physical therapy, language chiropractic areas us. occupational on segments therapy, Our attractive largest practice are are and these and the market areas

this second rightness on in and from mental leadership continue our strength as those prioritizing for other the that resources, and development half balance mental given practices of the group the our opportunities features as health of to expanding therefore of practices, strategy specialties year, market we currently we and multidisciplinary new addition many market. group to we In found will In health, also serve often the of plan we features. have benefit our of operate the

plan we our investing as across continue well new to as awareness. broaden in to marketing Additionally, our features verticals, brand digital

potential believe to great mental beyond continue SimplePractice health. We has

and ability new in time. over confident to the verticals in We have model our this remain replicate laid foundation

and practitioners that the of mind. back we costs more ability to simplify even and streams to believe office has facing become the As customer final SimplePractice’s when to a potential valued labor patients thought, time are connect during work and availability to top

the tailored customers InvoiceCloud’s quarter. quarter this more go-lives of results. now Services solutions. by new Farm growth of achieve utilities. of Notable quarter’s in adoption X,XXX Financial driven how selling our Water and our Now choose and go-lives turning adoption. about Central wins, customer and Success quickly was assisted partner because biggest our digital is digital saw the one serve of this space Clearwater, examples vertically States include Florida We InvoiceCloud Georgia segment. Bureau We QX our in solutions. drives than to our What’s motion, by rates fueled three Customers our Enterprise City customer Insurance and and this solution strong customer is remarkable go-live so superior we solution to-date. across

Escondido, a XX% first service using saw billing Escondido giving XX% decrease of in other to the months City payment-related staff paperless first also print projects. customer our on mail in electronic those adoption. has an significantly saw example, priority expenses. As nine enrollment achieved an The of valuable time. calls, in payment city high and time product, nine The And we back now the continue California City XX% over reducing adoption in months, overall digital of to increase drive self-service focus

perfect and seeing to great simple them. Municipal also secure, they for organizations teams for tax but a billers to and InvoiceCloud use, results are are fintech utilities, payers IT more for only in not are deploy fit find that robust and is We that and in convenient seeking solutions and government.

are innovative example, increase since drive more as growth by in to and than with InvoiceCloud, Virginia increase and driven payment To partners to our we James high well solutions, in customer strategic City new XXXX. Xx County, an saw XXx our paperless We rates enrollment an in shared invest through As continue relationships our in strategy. adoption as strengthen InvoiceCloud’s customer alliances growth electronic believe payments add go-to-market new our leadership. product strong

in payer still simplify allows features and our new us While most our all us biller more enhancements in to InvoiceCloud XXXX, often initiative is management and provide hosted experience, data customers. continue to our of exchange processes data launched to functionalities Since organizations for enhance SaaS. their selling enables is core customer’s continuously we to we and their competitors leadership. changes efficiently decisions market invest data to better data and This customers better to make recently make offerings, platform. that than needs. By This trust visualization. of released to R&D more We’ve tools policies data broader release our more have reporting, building to part are to and respond new product we to across faster features, further the and designed data, drive ongoing true and XX enabling and and usage establishing our are

class for are and top us. data Finally, world security privacy priorities

for important highest information, upon, sensitive are transactions committed managing financial standards. is in software the and upholding and investing dependent to and security Our we

pipeline. for Another signed a several new highlight segment the successful quarter we strong developed is quarter DonorDrive, Enterprise the key held customers, market and events this customers in for fundraising where

space organizations, fundraising building is this it this in off. paying focus Our on for alliances strong nonprofit is

DonorDrive and Crohn’s quarter included Foundation New Cancer include Syndrome Society. customers events Congress. and Canadian San Down Customer with Colitis this Massachusetts and Francisco Foundation signed Aids the fundraising

We’re conferences seeing several new Increased and fundraising we options. pipeline new quarter, in interest live innovation, factors. hybrid fuels The trade events, return due to in-person growth recurring advanced this streaming growth. and of in spurs this donation released to strength marketing product generated shows areas, terms support of

of exciting In of had of with we during year, the our Lastly, and exceeded in Salesforce be which second their have the awarded to first the of Unite were Award strength Year Salesforce. Nonprofit Partner reflection our half June, thrilled the quarter we’ve a at Summit we an partnership expectations. summary,

customer business driven customer this our the we Cassandra? our profitability traction customer medical our We and With the Hudson. and integrated solutions increase for the delivered that, drive helping hand save time, strength products excellent funds payments customer a We and and in We labor and market SaaS that I’ll engagement are leadership satisfaction. digital results raise is software platform operational payer tailored and growth, of driving people causes. vertically strong CFO, are billing for payments. further model over growth across to worthy believe are the adoption find enabled At same our position with costs, retention. needed balancing our Cassandra testament help market call care, by and and efficiency that on to

Cassandra Hudson

by We an revenue outstanding Thank We delivered QX increase and exceeded in and Enterprise, you, adjusted ads average driven that EBITDA momentum guidance. revenue results customer new customer. well our strong SMB per in and Bob. saw

meaningfully you guidance quarter. increased know, we As last our

for or outlook now We midpoint adjusted are the revenue range. XX% we revenue range the our quarter, to raising $XXX.X EBITDA growth again in $XXX expect million XXXX. for to of of our and be at This million,

which are million, year-over-year, adjusted representing fueled We was adjusted raising an processed. by revenue Total million, also $XX.X to QX for $XX.X EBITDA for XX.X%. EBITDA guidance transactions to an growth $XX.X XX% roughly and count represents in margin of year of million our for increase the full customer

XX,XXX, was count As end of customer of year. XXXX, prior increase over the of QX, XX% an total our the

customer marketing growth new mainly additions referrals was by our customer in our from SMB driven Our digital word-of-mouth and programs segment.

XX.X transactions strong processed processed. we XX% We transactions, also from growth. delivered million XX.X up in the in million year-ago QX, quarter, growth representing In

to year-over-year. in part subscriptions. expansion Subscription Our $XX.X highlighted continues revenue new the by SMB coming pricing revenue and QX add-on in revenue perform strong and made packaging grew of with million, growth and segment purchasing we changes from customers by continued XX% and existing second was at XX% higher customer million existing well, with fueled representing adds in quarter $XX.X customers,

have With the are driving we SMB pull on result this originally a packaging, stronger anticipated. forward new a pricing impact growth is year we revenue that and than timing our of seeing

been has Our by bundling new received customers. price well our

Our per intakes. start functions with moving practitioners try starter back- means such provides and to online SimplePractice at office paperless easy $XX as an package month

more We package new this use to are frequently. see beginning customers

normalized high number in of customer Since online at a such bundle the the that is contributor Our churn choice Plus frequently the $XX functions making levels. advanced and our at Plus mid-priced groups. purchases, highest group our given client practices. supervisors, popular practitioners schedulers solo rolling XXXX Notably, is bundles, to package and of month to for by practitioners, per the by bundle gives revenue out mid-priced offering it of appointments selected purchased per practitioner course our online most package option additional communications. licenses ability new seamlessly month it expectations provides our making to as add within has To-date, perform be is the tend chosen at to SimplePractice, practitioners, the $XX and terms and billers, revenue

scale to on are growth. strong healthy continue as more new accounts with We continue of adoption based usage transactions and platform. $XX.X grew that seeing revenue million from XX% Transaction customer our year-over-year to our referrals and process practitioners

XX% representing strong in year-over-year. XX% growth. growth based year-over-year with delivered $XX fees of at also revenue million, segment Enterprise Our reported results Transaction million, $XX and came representing usage

and invoice in customers As Enterprise and a reminder, revenue durable a process for visible transactions, us. stream payment resulting recurring typically

that our do business, we cases, transaction Our pricing some others, both. average line, going and not offsetting costs. drivers the and Enterprise charge charge the rising individual material SMB growth of outline in our needs. further inflation we To provide based mix which for and we charge fixed on lead and trends customer is In as absorb the a to on structure, a ticket to therefore revenue for believe In primary expect pricing to forward. some Due volume, top and a impact. color we customized we a cases, I’d percent like will fee of Enterprise per increases increases,

vertical, funnel mental mental health the the strong top treatments. we an driven health practitioners SMB, for For health by increase and mental trends in in of our shortage demand see of

continue in towards and our unlocking full group goal opportunity about of practitioners market for solo and practices. work are product in potential our simplifying core and our back-office streams be excited our We to the investing further

to average per addition over the revenue more practitioners customers, expect licenses add expand solution. for we our time process their practices, additional acquiring increase practitioners to as and through In transactions to new continue customer

in on successful wellness and we verticals. speech into mental opportunity chiropractic make strategy a therapy. replicating other playbook We progress our our occupational Finally, pathology, physical therapy, large language continue to of in see health

tailored we the to coming in and these build features durable revenue our We development continue specialties the on Enterprise, are focusing In visible vertically years. growth. highly on of for

our customer experience, superior continued drive Our on growth us by enabling digital of focus innovation fueled is product and to rates adoption.

to onboarding digital and We simplifying adoption continue marketing drive increasing further efforts to invest our in for customers. higher

are is have. Group a for We impact In also the Utility performance driven continue testament in alliances to InvoiceCloud their QX, strong to client bookings product our Harris across by our they and lasting upgrade alliances. the space our to alliance This solutions looking with see and great momentum leadership yielded as power our base.

excited about and implementing partners with future. are payment forward our our solutions presentment success in We bill and online our to the are looking

like by to vibrant in highlight inflationary periods. should that downturns characterized resilient. defensive that our nature operate We and and is attractive recurring I’d even and and remain business verticals economic their Finally, nondiscretionary are in

moving on Now margins. to

or $X.X the operating efficiencies to last compared functionality acquisition of to were increased million our XXXX, and of QX costs meaningfully second XX% driven company $XX.X to quarter, in Sales for of $XX was support new primarily expenses XX.X% margin up and in features margin $XX.X XX.X% million, gained and million, absorbing representing from public our investment million expenses million, both Enterprise as quarter QX our segments. million, customer Adjusted $X.X for in XX.X% the in to by at segment. margin million, $XX.X came EBITDA up gross G&A due XXXX. were invest mostly marketing implementations. $X.X adjusted Our offering XXXX public SMB customer in million the driven costs, $X and in by SMB initial R&D up continue we following September. in in

our to third outlook moving for year and Now full the XXXX. quarter

QX, we implies growth For $XX of at $XX.X range in revenue of million million, range. the the our expect year-over-year which midpoint to XX%

adjusted which XX.X% EBITDA EBITDA the adjusted in expect and at midpoint. the margin million an $XX.X $X.X million, range represents of We of

revenue million, the at midpoint in our XX% year, range. range of full the million year-over-year to expect $XXX For implies growth which we $XXX.X the of

comments. $XX.X of We Bob million, the margin now midpoint. at $XX.X XX.X% for the which EBITDA closing adjusted back turn the million an I’ll range over expect adjusted to call EBITDA represents and of in

Bob Bennett

quarter. scheduling another paying client We activities bills, Cassandra, appointments, new EngageSmart hard. great shouldn’t communications on-boarding founded be that because and like patients Woohoo!

Our success by is driven three factors. simple

employees customer have focused entire ready take by a are organization to pursuit and our eight our success. the workforce recruit, their satisfaction of playbook, The such focused and First, driven the across on to drives players. highly proven of great develop relentless our talent dedication proud future. and customer We retain

the to invest as focus work and for they deep best solutions We choose Second; our and the by retention. vertical expertise innovation because leverage to we EngageSmart to drive solutions in vertically our with Customers measured product want adoption. and deliver continuously best. tailored leadership higher customer and adoption customers, our

market Third; our captured $XX and U.S. have X% share. large adjusted market billion market of and runway. We about

We are customers, this business our focused thank on excited and us to the all in about full We on shareholder call, value much. very potential. our unlock growing you our world. joining impact creating and the before a to huge We EngageSmart’s us remain opportunity continue positive we in invest appreciate make delighting and you while solutions

Operator

we with our first And Truist take Securities. Tillman Instructions] can Terry question [Operator from

Your line is open.

Terrell Tillman

and Great Hey Woohoo! Cassandra! Bob quarter!

Cassandra Hudson

Terry! Hey

Bob Bennett

How you? Terry! are Hey

Terrell Tillman

just I to much heavy these Enterprise But of into emerging side other first upcoming about quarters. You sounded verticals. Is with what SMB kind you the do some Fine. hope verticals? still to need in selling question How there that out working the in emerging not If those the I’m look can of fit more lifting at SMB. SimplePractice market product of the be both activities SimplePractice like you emerging keep to all it multidisciplinary opportunities of particular, and terms verticals. or some in product the curious for in yes, or on so product I done just do? dynamics some talked in my in heck really these now, have platform that I is okay. relates about of emerging market

Bob Bennett

yet. Terry, work the I road very fit, all wholesome market not product map verticals the in but some mean still strong There’s wellness and of for

communities road a that know work mental try to awareness, replicate lead the referral funnel viral a on on we you brand – to expanding those to health bit say are and more not lot map of the in of referrals word-of-mouth throughout health. mental the little that would I So the top get work

on our though. So way well

Terrell Tillman

side, on like Cassandra. you then InvoiceCloud could more Thanks. then consumer little about the maybe follow-up like just finance, and bit in and for Okay, insurance, particular, talk the emerging a verticals a

Bob Bennett

Sure.

We think customers momentum we’re that of you really position in I in race. doing and getting traction, well horse know our insurance, point, hundreds there. at strong this really of that lots like

find I to consumer we aggressively. is you’ll into break think something little a bit start that more that finance

up on existing that start got now, with of got expand the We in You continue and keeping hands in embark there finance into right strong including other do insurance markets, we have that know to good. move our demand fit government really to we so utility will the XXXX there. where But vertical, because customers yes, are quite happy, we a funnel market top just we full is forward. our very product we’ve areas consumer as

Terrell Tillman

you Okay, this. the and and promise Cassandra, digital overall that said I I’ll rest terms in spend, $X sales marketing think million year-over-year. of marketing I was up after

unit really customer You do of if But think spend, have about how you that kind marketing could strong digital do out. acquisition we call economics. and

You and XQ, in does each build it quarter the the year? was to continue know rest impact Thanks. how that much of through sequentially

Cassandra Hudson

that at continuing your point to there we out to marketing broader support growth. organization also building and investing Yes, SimplePractice in the invest to were Terry,

strong an target, LTV know returns You XXx. north seeing still our basis, to CAC we’re know you well on of very

broaden new meaningfully programs that you for of and to always back the reach will SimplePractice this experiment digital half with our think the in in continue year know to invest I brand. marketing we continuing

Operator

And move next can our questioner. we to

from with comes Bank. question Shah next Deutsche Our Bhavin

open. Your line is

Bhavin Shah

another my congrats question for Thanks Hey! on taking quarter. strong and

any anything of funnel your the completely here. of as can bit you or macro, the elonging just in terms kind impact deal terms more elaborate on little changed the SMB through Anything the on of a or but you top on side of maybe in Just understanding quarter? cycles conversion are you Enterprise? business, progressed seeing nature sensitive of I’m

Cassandra Hudson

business. of still quite encouraged through this the first still changes are know haven’t trends. know and seen year we business have drivers in by You we’re strong We our any certainly – the half obviously you the very

navigate the that clearly on speaking broadly we’re pretty potential of macro feel kind just we environment recession, well think inflationary positioned environment, the in. currently to I

I time, the like said just defensive, and verticals really the for. call, kind uncertain know and certainly going but the prepared You a watching we something being on uncertainty there, believe and on it’s macro-economically are internally everything we’re we’re very it’s of that given closely targeting

Bhavin Shah

as quick helpful it’s think have you know you like a your into getting about follow-up. you’re the vertical into customers new about early, just do of we or a package, how models? do about new and Best as verticals? move whether there, just those Better, kind I under a able Good, attract and type think Better it’s the little but there, full to That’s then starter quarter and think to core you how within customers of expand the model we And Best the

Cassandra Hudson

our our more out, customers want to see practice, going we the built and leverage we’re mean business when might client are typically higher they on an they practitioner to their their I application be when starting telehealth The additional base, they to right? and They book have practice, to need into plan, example. of kind for add see their starter move building of featured them just offerings fully just their priced opening

takes but plan, and the the kind couple how time, we’re uptake I getting I next by journey continue to of obviously know see through think does that upgrade quarters. pretty path encouraged we’re the You the starter we’ll think on of

Bhavin Shah

my Great! Thanks taking for questions.

Operator

with will move James. Raymond next we Davis John to And

John Davis

morning you similar guys! you specifically like is pretty last SMB It to about good year. guys to side wanted customer start what added on did XQ customers, ads. X,XXX the in to Hey, in Just XQ and looks which

think was But And why say the you is churn on ARPU, majority the foot, large year fair else increases pricing in of kind know on any and of if from done? better. up So the know be likely You why basis, us? that year-over-year how we I think which you half a is on up reason back in about the think ARPU any know churn to Cassandra, SMB? churn it you that ended of wouldn’t mentioned about being teens anything the same teens back to it nicely, up behind the high half know the high is should you

Cassandra Hudson

behind I churn do customer the think think mean side, us I I now. believe we on that’s

know Now obviously ARPU don’t much that half than we’ve you the normalized – of our think levels, the I saw increase of that kind was trend. we to higher year XXXX in first this

to think we’ll there’s perform revert will I back I our anything than start average. think different how to fundamentally our business don’t kind of broadly speaking.

John Davis

And of then a high we’ve just great. with Okay, gotten environment. lot inflation questions the recently

us Bob, higher So a Enterprise card usage, dealing spend to interchange. know, any How how to back you maybe that thoughts Obviously on or you’re half just in your on to year is a explaining and any the the you should combat how business, inflation that going of we something think Enterprise about plays curious second you business? are just inflation. that, do the in cost with pay guys

Bob Bennett

at generation it’s growth, you a know where approaches revenue basis Sure. pricing you points as segment, Well, with basis of it’s terms with a higher it’s fixed an a know points Generally and take and SMB drives InvoiceCloud dominated JD – Also as you we on transaction, basis with – base know a we frankly both. that cost is of where sometimes speaking, we an our are by combination SimplePractice fix average of fees. Frequently, certain sometimes increase we if different basis top pricing where see of true, in of variety points. and know number have you we and enterprise in priced around primarily of our our margin. processing customers, example, that

well in least an or maybe now where positioned better calculations our bit indicate environment know even little be you in terms know inflationary we margins. of at it’ll a you we So to are that are with

you call puts overall it So takes, inflation it would I would – – inflation-resistant pretty little know and recession-resistant, bit. or but we a – give will

in I shape there. So think we’re good

John Davis

for quick One Okay then. Cassandra. more one

bit. margins implies guide XQ the little a Just down

we margins we’ve really on the year of So would far any this sequentially? good kind down top Cassandra, helpful. seasonally flow But upside Just there the should about Thanks of line guys. through seen color quarter any in that think anything year. result and throughout would be being

Cassandra Hudson

No, in to would investment areas only I the and we’re those call and R&D are I is thing right? invest for So us. out marketing, mean the continuing sales core

of in exactly the has flow-through that, usual think as you’re think very than largely Other I for I it’s strong. been spot terms business on us.

John Davis

I all appreciate Thanks. Okay, color. the

Bob Bennett

Thank you.

Operator

And from we Napoli William Blair. will with next take our question Bob

Robert Napoli

you. Cassandra! Thank and Bob quarter. morning Good a great Definitely

Cassandra Hudson

Bob. Thanks

Robert Napoli

You’re welcome.

about market share, but out into mean, So dominant clearly mental of on pretty health mental have relatively the mean quite you law a the the but large the health? extending well other space, become maybe Is to I you’ve you’re numbers business, rate? – that doing just the is When thinking health small in are in large. here. mental areas, inning catch-up SMB does outlook? is market. you we player the what there growth monster What in still your is I In

Cassandra Hudson

I think you’re Yes, I mean Bob. exactly right,

see what the behavioral in still really meaningfully investing product I our space a terms vertical inning that pretty newer in but have strong ads in core health. something and customer would market about grow we to we’re We of well. In I of development. terms call as excited continuing and also long we’re is opportunities the to and and continue fourth, new we’re we’re It to in in, encouraged play think way think

Robert Napoli

and have stand should areas expect what mean you to do know – we ramp up? you out? verticals, Where newer the I you’re see a In nicely profitable.

to and over investment opportunities speech How like pathology, expansion ‘XX, next in You you years? mental those chiro, health, physical seem areas should what out stands there? to into to which significant good but investment we should therapy, going the think say few about margin have see, leverage, within operating with we of tied expect the

Cassandra Hudson

to I and growth if be you this come. investing certainly in trend that is in with years that we’ll year investing drive continue – verticals know us be to to mean newer we’re in will those I a think and

from More meaningfully product I to think continued us manner, we’re really investing of invest because a so gross we’re leadership margin to going maintaining come be in behind in but of our know expansion so efficiencies will we’ll committed You kind expansion be honest, very and steady margin from back-office there. less for the product G&A, engineering, in that. to terms in

Robert Napoli

Talk] [Cross Bob. question… Sure Last

Bob Bennett

Yes therapy, and occupational bit so add I’m we some fit was where pathology, Bob. No, that to bit little, of little dietitians, to with of others. full love still and sorry. a a speech the there in little are going market nutritionists from that product we product I do work just markets a on language forth,

Robert Napoli

of And then you excited investment you as just your Thank innovation? side, see when – far are the your years? are on And innovation, should as about expect what to of tech platform very but you the couple product should – proud to as most be, speed we on what What you. of you’re over are how you next that front? innovation leveraging

Bob Bennett

suggestions customer our not Well, making the about thing how is base shy we can focus about improve and on customer they are great our it.

across pushing got enough a can of It’s beauties but all, you one have having on to call we’ve of new the tell we we – So this that you solutions board. know SaaS I are time true constantly don’t the it go enhancements. through

know think over on XXXX I of material the call, You alone since pushes enhancements. InvoiceCloud in we mentioned XX

our all out new it play growth, adoption, things. satisfaction, you that solutions to drives so Apple organic like across come of able we’re and opportunity, and So provide a drives customer it as when lots know Pay things those

drive Our out constantly teams so box product customers and are to of new our the are innovations. thinking

Robert Napoli

the on quarter! Thank you. Congratulations

Cassandra Hudson

Thanks Bob.

Bob Bennett

you. Thank

Operator

And Needham. Berg will next we Scott to move with

is open. line Your

Michael Rackers

Berg. a taking my year-over-year of think how Scott rate. and the about moving that Can was of dynamic Michael on It give for question Rackers revenue deceleration to just there growth and the us for on quarter. looks little everyone! the transaction there color like SMB bit forward? on Thanks little in congrats you kind a Hi

Cassandra Hudson

Sure.

year. going growth ARPU drive QX again in I maximization know to You So would meaningful made we obviously, pretty overall this that’s business, changes the for of kind mean on pricing, subscription right? that I point for and to

just transaction of will processed times revenue. X that versus the part always packaging to what maximization shift we’re story claims see on trade-offs total And going in we it’s of growth I making and processing more some that to for we subscription us. the tiers, baked the changes of dollars between example we’re revenue between maximize in level ARPU growth. insurance, transactions on. just so going into top so side, continue a like at looking in ARPU subscription transaction as to QX, insurance pricing we very So strong is into of pricing growth subscription see say that’s An

Michael Rackers

that deeper Great! And about moving bit could and you think then mentioned, how maybe you forward? then the on you. DonorDrive, go quarter growth a know to strong you that with Thank

Bob Bennett

just Sure. – with pandemic the a non-profits. With is so primarily so DonorDrive, platform DonorDrive to for large we – refresh, fundraising peer-to-peer

those you not types So lot streaming, gathering when the video had peer-to-peer pandemic streaming prior positioned was rides charity pivoting by fundraising hit XXXX, of into pandemic in raise to through runs virtual there you think think type of money walks, well forth. so and March where the DonorDrive so of events, efforts. and a events, know

very So but lose we well did positioned, growth watch we in fairly and although in in as XXXX, happened bit actually see growth. were little XXXX the rides of momentum did we a XXXX, runs and without decent well few some

rides in see apps in product but pandemic, XXXX as prior it issuance. to So walks, runs some XXXX, fulsome growth and strong mobile we’re come starting was let’s development as to Not in the and back. say very and

among around you nice over further very the really helped space non-profit driving know non-profits as past has nice our And adoption drive well. of That’s the wins some couple had some years and growth. in we’ve automation check-in to

numbers, don’t I exactly well. we guide but the think to DonorDrive growth mean, I So is performing

Michael Rackers

you. Thank Great!

Operator

[Operator Instructions] We will with go Josh next KeyBanc. Beck to

Your line is open.

Madison Schrage

Hey guys! quarter! on Josh. Congrats is This for on Maddie the

Cassandra Hudson

Thank you.

Madison Schrage

you these wondering you the as talk bit expect to about ARPU exposure of yes, what again. into of there? happen or that starter is wanted to to you plan a are there – expect the emerging SMB I to some those Do little plan Essentials go if guys I’m changes like verticals. also to Plus most verticals right the more emerging away new or take

Cassandra Hudson

ARPU maximize to we these between after. is ARPU. health have to of a mix that on I likely know continue going behavioral be to would we’re feel newer stable pretty You point room I and markets the What we will think lot

to a I continue will have the room we charge, newer example. of set know in feature price we and lot our verticals, expand chiropractic for we match to You that these think of some physical especially therapy,

verticals the several You on next features over as roll to know years. out more we that come to those specific

Madison Schrage

you levels? about current is my landscape M&A then valuation question follow-up are guys for with how thinking And the you Thanks. Awesome!

Bob Bennett

to a think about growth, company organic continue of time. Well, intend blend we built through it. acquisitive and it to we and the We a all do

– I with we we’re and know we be and to think market, some M&A private valuations rationalization that sheet public move that as will able and to we’re our forward. see expectations private you aggressive to public continue optimistic between market market be balance starting

So we’re pushing.

Madison Schrage

Congrats the again. guys. on Awesome! Thanks quarter

Cassandra Hudson

you. Thank

Operator

to pass you. There Bennett registered questions Bob the at additional are remarks. Thank this no I’ll conference closing time. for

Bob Bennett

delivered your in Thank us. Standouts XXXX. business EngageSmart be quarter our increase per U.S. we our opportunity continues huge Momentum our customer positioning performance. second market the across revenue for of address Thank you strong in you our flywheel. customer of quarter another are results for with growth, record questions. to average drove excellent customer revenue retention. all our as Overall, joining exceptional proven compelling the and

XXXX Technology Deutsche excited Leadership and the and Forum, to Sachs again Bank’s Conference you Communacopia this speak the at later Conference. Goldman KeyBanc We are summer Technology with Technology

Operator

today’s does Thank program. conclude your you for participation. This

Engagesmart (ESMT) 7 Aug 222022 Q2 Earnings call transcript