ESMT - Earnings call 1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. Thank you for attending today's EngageSmart First Quarter 2023 Earnings Call. My name is Todd, and I will be your moderator today. [Operator Instructions] Please note, this call will be recorded, and I will be standing by if you should need any assistance.

I'll now turn the call over to Josh Schmidt of EngageSmart. Josh?

Josh Schmidt

Cassandra and me our are on Chief Officer, morning, earnings quarter Bob Good Officer. Executive With Financial call. the and you. welcome first to XXXX Bennett, Thank Chief Hudson, call today

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

Form Actual Risk annual by During statements. these risk we information. Please discussing and business. Factors our materially our differ XX-K refer certain be call, could filings associated on factors regarding from information the section SEC forward-looking report of the this on with forward-looking and these to for will results other those contemplated statements forward-looking more risks

GAAP our management of now be found which our call website Bennett. non-GAAP provide metrics otherwise turn available Investor and Bob metrics reconciliation webcast can on noted. investor.engagesmart.com. metric during believes is on the both call over useful as information section the earnings A our are nearest supplemental to non-GAAP as regarding CEO, and would be statements I these presentation, call All well replay available website. discussed measures at being why are release press unless of in our for the This like live this will to of Relations to

Robert Bennett

thank Thanks, for Josh. first joining morning, earnings everyone, call today. you quarter Good and us XXXX on our

$XX.X growth, kick is the to new all year-over-year record adjusted excellent seventh business an of year $XX.X which of the EBITDA million, thrilled our off resilience which of strength EngageSmart margin record and and representing XX.X%. revenue, adjusted showcases are of quarter quarter We EBITDA consecutive with delivered that organic, million, model. an first XX% is our

to exceptional for work in hard have success deliver customers. and Our and instrumental dedication enabling our value teammates' to us been unwavering driving our excellence

trends quarter, continued segments see business. secular across Throughout sustained demand favorable the first to both our and we of

innovation, market driving solidifying to We further in position. also make progress our product continued

reach verticals. our paying focus and continue all across XXXX, client in forward move our on engagement customer is we and expand off, we As simplifying to

Before our and I'd Cassandra for XX% The to quarter professionals details a shortage for into care revenue, health our of to of XXXX, first share for quarter. Driven highlights. in positive segment first opportunity performance new some and deeper mental like unique the and the high transaction achieved meaningful dives financial our customer make the demand SMB revenue presents impact, a adds of outlook growth SMB by favorable and

their tailwind well growth in Our continued fueled to and capitalize digitizing for the providing a quarter. this Enterprise adoption organizations Enterprise on is steady delivered growth. trend paperless payments and segment by operations, positioned go-lives revenue digital strength of long-term customer XX%, of

has main growth elements Our strategy X SMB showing and traction. great in is

where SimplePractice need health on that a According the this highlighting of The vertical, gives By streamlining first they care the centers practitioners treating opportunity mental for core burnt most of unique in they patients. agreed the functions, on out our to to American element address to what strain see XX% due our presents administrative industry. Association, felt a growing on challenge. strongly psychologists their focus time health agreed the disorders. XXXX, about, SimplePractice to of or Psychological prevalence care strategy we mental

our of element second growth practices, a The see opportunity. strategy significant group which we targets as

among solo small our are helping of our fit track an traction comprehensive group see for given practices. area expand their These us excellent to in continued with solution. We businesses this particularly QX, practitioners with record

our and cater developing new in practices progress both. are invest of and to the group features to continue functionality small and We by both needs to large encouraged with

particularly pathologists with market see to and occupational strong expansion continue we growth, therapists. language speech Additionally,

around SimplePractice's keys One its foster community build to a its ability to and is success the platform. of

XX% to a with bring can heart also With customers Our found we their critical over resources say a community approach that help their customers create are but and only a wellness We've have succeed mental survey network and XX% gap mentorship don't in vast them currently success, support. connect to this we practitioners, and over aspect to that supportive just our our that practices. to this investing positioned software In XXX,XXX but health career together. is need mentor. solution, uniquely are XXX of practitioners, that taken of recent practitioners a a address peer

launched XX-member In mentorship saw program, we was the a enormous. we pilot interest and March,

had In fact, we room received over XXx of we applicants for. than the number

as enable us this initiatives community, brand. into like grow our our bring expand excited new are practitioners We to they help us and about SimplePractice,

are committed We mental accessible. care health more to making

is practitioners, extension SimplePractice practitioner be or an programs believe often while Enterprise our issues MCOs, that Enterprise to supply address the has for expanding SimplePractice newest therapist providing by offering, systemic practitioner employee improving and growing in-network network strengthens valuable network. flywheel of and our scheduling existing find therapists our assistance EAPs particularly and We mission. for to Enterprise base which practitioner Our efficiency. managed community. also organizations, or care their struggle can regarding our easy our By patient SimplePractice also with potential

that we now We and our on forward you signed additional to progress. process are and of the previously bringing in updating EAPs live look MCOs

dealing practices be to continue address necessary or small expertise. RCM resources we group that face challenges in the time-consuming, Accepting or practitioners invest and insurance. and to solo complicated for SimplePractice when cycle particularly practitioners insurance Beyond management lack with Enterprise, the revenue can

and denied not believe healthcare by We choose As rely third payment they insurance accurate access improve or with various mental solo to a group Or practices and how insurance. the delays. potential accept at to often practitioners has the understand all. to they result, parties SimplePractice on manage transforming claims small claims, to submit policies, deal

most, at an We maximize and they ecosystem patients. reimbursement insurance developing that so focus accept treating help to designed can practitioners what are they innovative on rates, is scale love

determining ways to our are great making to insights, customer value we progress underway, the in expectations, insurance effective program valuable SimplePractice solution. pilot a most gathering add With and understanding

We with fit. achieving feedback, the solution and we'll we are product of advance market the excited about our on you updated goal our as initial keep progress strong

turning to modern Enterprise quarter rely driven we our our perform ongoing and to, industries on the outdated financial and adoption services, that heavily steady well, solutions. Now digital The utilities, capabilities. to segment, healthcare of giving, cater continued throughout wins lacks paperless Enterprise and government, and software features by

bills, creating this user-friendly or industries, in fall whether online seamless short convenient, of At features notifications. digital it's mobile integrations age a in as payments legacy shopping reminders demand InvoiceCloud, challenge and paying businesses However, consumers even adding In and new experience. these top tight basic systems. providing or and today's access, by automated such online existing on functionalities have we often addressed

deliver to without overhauls. experience for Our a approach modern the enables expensive customers need our

partner Once our win. to we we implemented, drive billers digital with why with that's adoption and them,

see customer we XXXX. insurance, of first in the Charter went to In In Chugach including robust Alaska, went several Michigan, customer for we customers, live Canton, Township in largest continued live quarter go-lives Indiana. County, with Vigo our with utilities, Electric date. We example, to and of

customer an our of recent and of cohorts, achieved we a to preferences ability In for rates evolving paperless and seeing digital superior are records Notably, new drive of with our to acceleration adoption adoption. billers. digital adoption addition, testament we

alliances. Hampton, the recently fueled was consistency of by first and signed In utilities, quarter insurance, customer Illinois. of signed we In Luba And wins we in Quincy, East Workers' from town we strategic North Our we in in for customers in won where and a several Comp. recent benefit tax, Carolina the quarter rooted new Connecticut the also InvoiceCloud, strong mid-market. City tailwinds bookings

relationships existing add important accelerate alliances and once strategic growth to top new new strengthening they they're and sales drivers open of as remain cycles implementation Forming and onboarded. our funnel, markets,

to often quickly. more move upmarket network our enables us Additionally,

key One through conferences. and network of our move initiatives is our accelerate strategic our further expand industry to upmarket

Energy For the forum water. we example, San enables Water Edge share InvoiceCloud first in that a technology the X in showcase, in of solutions Conference the Oracle of event's one forward-thinking companies companies shape quarter, future innovation Diego. participated and that energy was to Customer and in that the presented invitation-only

with satisfaction have California. utility service like billing engagement the and also digital past, Escondido, Water of Energy City In the to technologies Oracle to integrations, we new customers efficiencies, customer worked increased provide real-time and customer and

about Oracle future. the in are opportunities excited with potential to collaborate We

addition, Lab technology has Industry a collaborator. the joined as In Oracle InvoiceCloud

Another key success driver is innovation.

to We are customers thought employees. helps and is forefront and improved development customer-facing and forward preferences of look be customer customers' critical expectations. the product The revenue always We the our assisting and to payment solution our collaborative striving helping we on recently, Utility and operations-focused XXXX challenged insights while sharing leadership joined streams meet customers. exceed to at Most consistent focus how Collaborative. utilities on impact keep their on departments

margins. strong of fiscal a revenue another record had start expanded with we've In summary, yet delivering EBITDA XXXX, quarter to

continue customer satisfaction. save drive solutions elevate that costs, operational adoption and market to We of help efficiencies, improve

CFO, SaaS suite software With customer outcomes Our Hudson. Cassandra? model integrated and strength by our our and position tailored platform retention Cassandra payers, demonstrates of excellent rates. over our leaders with delivered adoption call as fueled customer by This of persistent that, vertically business to customer solutions the outstanding the in engagement demand, I'll payments. hand

Cassandra Hudson

Bob. Thank you,

margin results reported adjusted quarter adjusted revenue deliver verticals delivered first to defensive record-breaking exceeded robust showcasing while We've quarter. our in again our strength the expanding growth in of and first and expectations, profitability. Our our ability EBITDA continued growth and the EBITDA

making the following changes our XXXX fiscal are As guidance. to a we result, year

full million growth year, XX%. million range the to $XXX to be or revenue in we and of For approximately the $XXX of continue revenue expect

the be million, improvement of EBITDA range XX.X% fiscal an adjusted the full to are our now adjusted We in margin and and XXXX. a for raising point year for roughly or XXX-basis $XX we EBITDA which expect represents million over guidance year, of $XX

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

a QX QX timing in million the adjusted QX of an $XX XXXX. We $XX.X of at sequential range EBITDA due margin the in XX.X% expect midpoint. to the adjusted anticipate concentration from and represents in the adjusted which EBITDA EBITDA million, to of of We margin decrease and investments

and about quarter XXXX, the next remainder the mind. keep As of the following you in please think

our to the practices in opportunities This a within core patient awareness trend high mental has care. practitioners needs growing our for created SMB, meet driven increase growing Regarding a in and solution demand population. and small SimplePractice demand remains their expand of for vertical, by an health

purchase As represent and We packages, significant a practices our customers they are believe add we and us, seeing for through traction. our payments typically opportunity process solution. seats, SimplePractice higher-priced group grow, more continued

We to and value of on accelerate the In in QX helps enhancing expect. our proposition seamless experience our the points. remain of payment and to processing and increased offset further increase XXXX, our move to late strengthen to solution pricing we upmarket. our and basis This payment focused platform us higher costs processing allows by invest customers continue our XX provide integrated infrastructure

As it we for are growth. have steady relates robust demand solution continue to to a consistent believe will our that seeing fuel Enterprise, we built pipeline and

We on also sales remain highly implementation to focused enabling execution, move us upmarket. and our

critical We a this growth are excited market segment funnel aspect of becoming top of is our our as about strategy.

traction verticals. we are addition, and In strong in tax our insurance seeing

us. we several and represent for customer with progress slow, alliances. As tax and and customers a customer relied Bob systems inefficient, to with have Carolina, Insurance date our large on North mentioned, insurance heavily are strategic billing just and traditionally recent largest we and tailwinds our rooted in live new benefit from in tax error-prone went where billers encouraged wins opportunity by

both. adjust increases. on cases, we and We in absorb while increases average As revenue you some volume, other fixed our customer for cases, a per mix per transaction costs. ticket structure we cases, transaction fee needs. charge higher In regularly know, to and our which based our And customized of of charge customers a costs. we is assess In pricing charge revenue as the absorbing percent individual some pricing a optimize

second from Finally, quarter, our mentioned events our in disruption the DonorDrive this solution we macroeconomic revenue believe susceptible last as guidance of half in I fundraising is and growth to year. assumes more that slowdown a

representing million, transactions to processed. turning results. for by count $XX.X and quarter revenue Total fueled Now year-over-year customer QX an growth, XX% increase in first our was

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

to segment. continues our driven referrals new and programs adds from our be digital customer growth in customer word-of-mouth Our by SMB primarily marketing

strong a growth strong In processed. year-over-year, XX.X transactions, revenue representing delivered revenue QX, year that the processed packaging have million, first quarter, adds we grew segment million quarter our growth partial pricing growth. solution our $XX.X secular up new and from last changes for XX% of and in demand XX% the in also customer XX% in We million $XX.X year. made year-over-year. SimplePractice ago by million Driven related that tailwinds uplift XX.X we of in fueled health, mental delivered the transactions representing SMB propelled Subscription by of to

XX% revenue due Transaction of price to platform a of by transaction ARPU increase well usage-based as and transactions $XX.X processed number our higher on year-over-year, the processing of higher million as integrated point payment XX-basis grew our driven solution. a

segment of growth, by $XX.X wins reported Our year-over-year consistent adoption marked revenue Enterprise to continued and well XX% representing quarter throughout with perform of our solutions. the continued digital million,

As expected, small timing InvoiceCloud XXXX sequential of large of a QX we in and for associated revenue the stepdown the tax concentration DonorDrive. with saw in billing fundraising due a on transactions to basis in events

up XXXX. million, of Sales $X.X in our and digital create drive increased as margin customer solution marketing acquisitions. new for XX.X% QX marketing we SimplePractice invest QX were to awareness channels for gross continue XXXX million expenses XX.X% slightly to $XX.X Our and of from adjusted to in

In our additional came Revenue segment, In well Enterprise our sales continue focused in group alliances headcount at as well Enterprise, for Management. Cycle as SMB $X $XX.X R&D features we opportunities as up practices in to and with the growth. our be million, investing and see strategic primarily investments SimplePractice expenses bookings fuel on million. long-term pipeline as we're to

$X.X primarily of to Section were in Enterprise by to digital the G&A, increase our segment, $XXX,XXX, Sequentially, XXXX. $XXX,XXX. payers an $X.X across changes. G&A Net our by we're functionality of efficiencies in insurance many for investing XXX quarter the tax with first continuously adoption income million code million all our up associated seen leverage was in million, driven and back-office quarter income tax experience and We've to in our income enhance the functions. premiums significant compared verticals. billers lower In their and to due for accelerate $XX.X decreased the in of net expense costs

the free cash to XXXX. primarily cash a flow first driven was for bonus timing million March and in our typically the $XXX.X sales $X.X quarter the cash $XX.X and flow quarter, of efficiencies representing the fiscal improvement compared as Free as as lower XXX-basis was to XX.X% in expanded The margin a extent, from XXXX. result of investments margin of EBITDA first planned XXXX. Adjusted point marketing $XX.X by to million, quarter well G&A, in lesser EBITDA year was EBITDA XX, conversion as of million, to payments. We balance million see annual increasing adjusted a our

moderate we NOLs due reminder, to to flow approximately EBITDA adjusted with XXXX code As the a cash expect free tax utilization cash our Section in and XXX higher changes in conversion associated of remaining the to XX% to taxes XXXX.

bills that uncertainty. majority of unmet in nature, in summary, defensive and towards our is segment, operate that trend strong. economic the digitization remains the are treatment remain verticals In believe even there should vibrant we attractive Enterprise health and times of In nondiscretionary widespread for mental and significant fuel In continues growth. we SMB, in to need

we customers. to enhance in to our serve needs invest ability solutions further to continue SMB both ahead, and of our unique our the enterprise Looking

in drive ahead. We our growth opportunities create stakeholders execute strategy profitable are and for to capitalize and we long-term confident our lie value on our as that the ability

now comments. to the closing over Bob I'll for turn back call

Robert Bennett

paying shouldn't like profit onboarding Thank activities be bills, and client because EngageSmart expansion. you, founded Wicked Cassandra. growth new We cool patients, and communications hard. appointments, scheduling that

driven of by simple combination is success Our X factors. a

retaining, keep teammates, proven unwavering is and going. our our prioritize and talent. focus exceptional centered momentum whose on developing and customer by customers we We playbook First, satisfaction have a on our led top-tier that recruiting, work

high evidenced by our focus Second, we rates. strong on and retention product leadership, a as adoption have

us markets decisions expertise industry-leading in vertical our deep prioritize resulting customers, to in Our innovative make that allows solutions.

operate and we market potential Third, growing in for significant a with large expansion.

morning, arise. opportunities market on We delighting have as across you focused addressable on you very We new share thank make captured We business and U.S. the seizing of they X% impact call look us to billion while creating world. our forward a we value all all appreciate remain our of a and customers, in positive $XX stakeholder market. joining growing verticals this this expanding approximately much. our We and presence

Operator

Bank. Instructions] Bhavin Deutsche Shah [Operator with comes Our from first question

Nicholas Giovacchini

tiers? It's Digging mix us on you Pro this customer developed to further Starter for Nick the and across growth on some SMB, on Bhavin to morning. within Essential the has within can on graduating in from color pricing tiers has how give How different from progression looked SimplePractice? up even clinicians

Cassandra Hudson

and We've would the Sure. top today, percentage overall on I are and are happening, so upgrade mix a the our up use start say customers small plan. what happening X the a tier. rolled to we it, in of get to into packaging QX right? and of seeing see with we they we majority pricing That more product, line say new graduate in for our But of were rollout. very with on a need the activity I really have The would stable ton seen is XXXX. Once activity we of then do a impacting pricing starter features, tiers since for out expectations the driving next them the

Nicholas Giovacchini

the updated us expected on a guidance any Great. and how can then investments just be about expenses anything just aware else of just give linearity? color should as for the second thinking And follow-up, we you half? to the year, trend on And in are

Cassandra Hudson

I the in We marginally last one. that revenue we think QX And year. will I touched on say I decelerate really on certainly influence expect quarter that certainly investments, progression of would to so in the big terms the profitability. timing things do throughout think see we revenue, just of is terms of

impact the right consulting number now and projects that EBITDA that margin a of are quarter. our in will happening have We

a should of smoother. really make of But bit the some rest be little these depends year progress the think that we on the projects. again, it on I

Some particular investment a that QX It a is shift again spending But of of we the just from here. was concentration right in QX. in seeing possible upside the saw that to little that really that QX. quarter happening we're bit in now, QX in second happens

Operator

question Our Jason next with of Kupferberg Bank from comes America.

Tyler DuPont

the Nice on just on briefly margin. want Jason. EBITDA adjusted Tyler quarter. during DuPont is to touch job This for I

came majority you clarity where additional any would the mentioned almost everyone's expectations. bit Can more During but that in of it surprise there quarter, to efficiencies discuss the helpful. a I just seemed G&A, little be know beat maybe on you from?

Cassandra Hudson

Sure. really Yes, in I the mean it's profitability quarter. certainly strong

'XX of We Lower public are speaking. over growing lot a function invest had investments quickly was business, a seeing public behind made our efficiency broadly insurance And function in a to we to a and XXXX, cost as being in really, one 'XX especially also we of back-office G&A factor. really lot growing and support a that's and as just our ours. went company

the efficient And across more get are was efficiencies and starting then there bit would and timing little I'd more efficiency pleasant this -- QX. I in Also, some us Enterprise the which quarter related just some to a I a say marketing in little think really those QX side continued than between And as say sales for quarter we to business. bit surprise. in the drive on a

Tyler DuPont

gaining you addition then And language provide pathology others. rate additional know traction a just to I compared faster great. to health. within on be OT you health Okay, seems mentioned SMB speech to in an at verticals and update if also, potentially can mental the

mental we and breakout Just remind health the And you can when segment, about then other any SMB just verticals? the between healthcare us clarity the there. think

Robert Bennett

specialties to The segment. towards the we roughly health therapy continue a we're mental us SMB plans. really seeing growth for be pathology expansion emphasis bit overall opportunities language as very from market has group new supporting our see be strong natural growth the well. growth in occupational shifted And The to but practices, coming speech strong continue in to Bob. XX% It's continues and of

Operator

Huang comes Tien-Tsin next JPMorgan. question from Our with

Tien-Tsin Huang

on the pretty an I just want the it days as board season, versus ground there interesting consumer demand you this pay sounds if do strong. just What on see been performance on like observations there's as curious enterprise side, bill quarter And the April. the in terms played It health? to like has up ask across seems shaping well consumer out side, of steady, any as how's observation the XX ago? into earnings it's but

Cassandra Hudson

the Just your we're on that question, side overall about strong. you're strong. asking to very clarify been seeing? Yes, very just trends Yes. enterprise It's

very QX pipeline, We continue and performance to as strong have were implementations a well. strong really robust bookings in

I any as to green of board, kind you've relates got? looking additional performance. color it QX across think Bob, especially the

Robert Bennett

of some with plus a top I No, that is adjustments as we aligning and providing continue of engine so sales very be building with driving our in the inventory executing strong And is terms and new you seems funnel. forth we steady a of yield partnerships of will deals a think bookings. go-to-market if teams very selling ago to that just made our strong scale, year to and quite in well having

Tien-Tsin Huang

both second question just any AI, there. of comments around Productivity would curious how be I that. what it lot appreciate impact AI questions ChatGPT my fit might and demand of generative thoughts on guess think the we're you your to what on in on I'm terms a getting or be Bob, product hear or last thinking generative and especially I so question, roadmap do businesses. SMB, great. might

Robert Bennett

to having segment that that techniques, with or you it majority It's great building through of tickets, our vast questions We've our already from going support think Sure. people in I really come we're customer And course, are across not question. base, efficient AI has. so AI job self-service that deal and right it. a of handled of a if actually everybody through the to now, bounce already done see SMB into will,

over the generally and are over they questions again. Because same

we're of of think our which with more there we I new of shift simplifying engagement. we think and really done natural going yes, direction whole fits to even see customer Enterprise. towards well be I can a think driving some client age there's lots that that self-service, as that But

Operator

Terry from Our comes Truist with next Securities. question Tillman

Terrell Tillman

cool Hey, Bob, and Cassandra a Bob. good like It wicked Josh. seemed quarter,

Robert Bennett

bada bing. Terry, bing, Bada

Terrell Tillman

there. played Well

of First very Bob, small SimplePractice, on practice. question, sounds was on like it that small like is, the mental I'm what to But SimplePractice a when million do What products how skew that? curious revenue part I just and practices? of go-to-market number typically X-part differently group you practice. standpoint? like business and scale. a you and brought that group just repeat it relates of from Unfortunately, is it's like practice health every of large have compared small a a can early oriented or very believe, if And like up a versus large business it's does anything about of for I group group question, How want. now and And these lot you thereabouts, $X you group clinicians for to to exploded there roots the practice was is kind

Robert Bennett

deals, expect to continue fill Definitely We've permissions-based complexity see definitely that to that they all they've forward. migration we base, what rooms figure we get for to room more continue see big towards larger to a customer continue got more and another their items if that. we organically and as they it. will, they collect within our to from the going reporting to with as something. or new natural you group get There's somewhat groups out add that clinic to and and more used move hierarchical who's needs, seen base, and clinician as up practices, larger work a have to they at them The they schedules,

number built don't increase I -- worked they expand. and more very think steady the solution leave that we've want the that migration it clinicians see the a their more with product the needs. seen we've gearing continue needs we've to closely practitioner. -- SimplePractice. adjusted They been very to over of And accommodate was to support it successful think SimplePractice. it's to to a for of And more We originally And is leave time. clients growing over group don't We've solo I accommodate group needs time, just in practices. of of want them per to as and

Cassandra Hudson

XX lot would that's group do group and even have above certainly practices to we a today. just XX where Terry, for a of add, we lot strong of And range, above the couple But X I traction a in and XXX. practices XX see

practices we're permissions, groups. testament and a reason why UI allow waitlist to is clinician to investing behind a payroll that's that features we practices then group A to in across think manage for simplification, those things include more of management, demand big group and the things roles some couple for specifically and I like see base. like their features productivity

Terrell Tillman

you really That's on I helpful. is challenges. it, maybe And this both macro-driven but I second appreciate you to think maintained is half, -- did Cassandra, thing that. at one maybe guidance way look all's I responses one some mean you say DonorDrive,

DonorDrive? kind like business Could full of InvoiceCloud about for SimplePractice businesses how feels kind if of and and are the of of bit adjusting it actually little another the flesh you ahead out kind SMB maintaining. at more Looking expectations the maybe Enterprise it you're on the you feel way, a year

Cassandra Hudson

Sure.

broadly expectations. and in we outperformance saw we the very to the our by that performance really relative speaking, think encouraged I are QX

our demand to solution view InvoiceCloud the given that macro speaks think it just and think solutions, see particular. of continued that strength I business. course, up make really that of in for we of the don't the on given concentration of there changed in just I susceptibility has primarily they all our DonorDrive, SimplePractice our

where there fact in. the see to would in events concentration wanted revenue is that of back and factored would the we highlight fundraising the impact. half just from We That's a year, that be of certainly the

our year early sticking in factors, about But ability good feel the for and kind given confident confident in now. still of and the really feel we're really range all to continue to revenue We guidance. still our achieve there. full of those It's year, very just to with ability again, our get

Operator

question John with comes from Raymond next James. Our Davis

John Davis

the the see in that X,XXX came SMB Have increases. price given basis XXX I think light we attrition were there? any points in that especially of you increases or March? than count going think about price you to went seen Do attrition? any Cassandra, expected, from the seen customer you comments better in Any SMB you've

Cassandra Hudson

guess you, I terms SimplePractice. JD, customer did in of a with agree adds to good we have certainly at quarter

we for customer that growth the very turned out pleased were side, the how with On quarter. add

I think was as largely I and change small. churn pricing expected. it is The the on side, packaging think

what As last to disruption we've we the and the that quarter, with seeing far. side, least alluded on expect be, churn aligns minimal, more to we at been so

that, changed still and there's we for to speaking. pricing the for quarter new. some broadly pretty late think QX, the There's it's for given event but a largely in just that potential us, potential smaller I impact still still

John Davis

was you to have be think think And then packaging, last going us assume little bit the it's pricing moderate the the helpful. rest and year would XX% year. SMB SMB the price because of there increase. year-over-year. this Obviously, help the I about comments increase puts that a lapping for smaller you're and Maybe I the price about takes up on I think but ARPU but versus any year, was

Cassandra Hudson

Yes.

still pricing trend the on ARPU, we that I subscription I see of obviously, lot side, a think saw would the think payments certainly, increase and to the is expect continue. the I on that side. ARPU change We in related increase to steady

in and impact That the that well. we and think rest mind year. the the one typically the QX of in of bit throughout keep that just stepdown I seasonality strongest, will thing in terms to a start happen as business, little see is there's of our ARPU to appointments is

result this we'll ARPU think those more I work get balance -- through certainly of as a year factors. the we see of as moderate

John Davis

quick one one And Bob. more for

Have to rationalize all? color would M&A there cash stacking be comments on helpful. started environment? Pipeline? here. Any Any valuations You're at

Robert Bennett

Yes.

we're definitely be I we continue at we see rationalized continue We JD, no, -- valuations opportunities. yet we Terry, and active were. mean active, to than to but I think completely And more all, haven't

Operator

comes with Our question next Berg from Needham. Scott

Scott Berg

I guess have I X.

do and does into partner partner-driven outlets for anyways. Bob, had pushes InvoiceCloud obviously motion to making fairly a product? and of extensively talked always all, go-to-market events incremental some has of having business First of I guess the the sell for some this just the maybe fairly InvoiceCloud. you're about what of outside you more conferences ecosystems push these

Robert Bennett

to also a versus a an it fundamentally a Yes, use real-time it's stronger system. To become Scott. integration. And provides the simple tighter batch let's a integration. create information customer example, with therefore, us integration Yes, opportunity say

and utility in want sending be if send delinquent, to see a that. to truck might If morning, if might you're you in comes water out not don't batch, shut But truck. you you're a you somebody that the a is off. a And payment

the better can and support tighter It to sort the files you're -- If overnight, batch-mode, you alliances. better somebody of integrations needs a might are of an you just lots There you send paid might top versus ways example systems morning. It's a integrations that in stronger. are truck strong having our that by just and uploaded around isn't ecosystems proposition just payment their of to funnel. we competitors. actually that create That's Real-time customer not support simple it. improved of value

Scott Berg

But versus increase you Helpful. see it. pricing nominal. perspective, negatively if the have Cassandra, payment how I And very that on very Got might talked quarter? any from about impact it's a did that I the churn processing. customers small is. then it processing, know the on the in reality the modest, know on didn't follow-up

Cassandra Hudson

a didn't in expecting event we're We disruption it see Again, of small too there much impact. terms really QX. to be in very churn

it again, we think new us. As is. get impact see of But I be impact here, that out mentioned did may -- I we for quarter, later pretty in the an it just how still nominal earlier, will roll some so given

Operator

next from KeyBanc. question Josh Beck Our with comes

Madison Schrage

on on the EBITDA is, do you the penetration the Congrats Maddie My digital how is how thinking you are about the that rate seeing number forward? for question payments first you think This see guys love for affects expectations. And within going average that take Enterprise I you Where way quarter. going? today? above Josh. segment do

Robert Bennett

XX% get customer, bills paid average probably of Our average for customer. through Maddie, the our is about get that us issued,

check, payments. adoption XX%. online On natural basis, it's pay other and to and our a still, very drive over are we a penalty tend that a in because simplicity of of adoption-driving with customers paperless high not but both -- not words, have We paper motion, they they're to

than go is from And XX% for a the We're That's several think to that base. There's an adoption at our we certainly now, near-term base. think this XX% see customer years customers it higher opportunity of that be today, within plenty that's trend. goal XX%. existing sort of virtually to average XX for got But will that. really the drive to try over to We've for I XX%. see us our just of customers. of we all

Madison Schrage

just helpful. How of progress Got base that it. say guys then in to EAPs That's talks are wanted And of what's that approximate Monarch. super on And touch there? today? would size you you guys targeting many are you the with the business

Robert Bennett

Yes.

and gone couple. that about progress care access that's this And We've several at for there you providing we and contracted with extremely largest if our support. a are meetmonarch.com provide bases talks need and simple Several through calendaring actually this our We to appointments in with. care growing to that assistance professionals organization, able employee live direct our EAPs not have making through but in we're to for very managed for or mental functions point, and naming this MCO, the those fast. that to We've names excited week health methodology we're be will, they really the are come. health by MCOs with patients mental the for marketplace

Madison Schrage

or clinicians just into Monarch? all Monarch quick part And just that. the of of on the follow-up clinicians a to opt automatically Do need one

Robert Bennett

customers our already us existing simple need got Maddie. -- we to provide they question, see good create a which that full their What build out -- thousands we of bio tools they It's within system, have our that. need done that of is for. their We've our for to

access for today. lot But in We in cost EAPs have MCOs lots of clinicians and a enroll to these do it, anything of available to to have enroll it. Doesn't they yes, sure to able but the bio care appointments create have their that is our be and to the coordinators MCOs calendar just to and website make the for they online update online.

Operator

from Our next Blair. Bob William Napoli comes question with

Spencer James

maybe James the towards maybe of quick amount opportunities Enterprise versus Bob. increase adjusted want the go-to-market I just going and in between summarize go and product is SMB real to segment? outlook you the the just enhancements near-term This for Spencer expenses longer-term sequential differently, Or incremental Could for to the put expenses EBITDA. SimplePractice for on business? back

Cassandra Hudson

business. would hiring, least the also, in at engineering I little that little we're There's a terms more just bit There's investment bit of And side. planned. QX, to timeframe we results little go-to-market we and the bit also is that influencing had as certainly think get And I a of investments as the SMB executed say, of investments originally in it in projects lots side weren't EBITDA all relates bit. terms QX well. more in to right? G&A just adjusted of QX, the a of in a to same in those able on investments obviously general That's our making weighted consulting the

Spencer James

How for we the then market about outlook about in segment. rest ads think And of Okay. the be what new might year? might new that the I the for that in and and the ask wanted to digital digital SMB market trends impacting ad mean should how ads the ad in

Cassandra Hudson

I approaching those we've been that, very, funnel customer gosh, We're and for quarters results. prices the despite seen advertising stable Certainly, digital X, really very continued now. cost in pleased of increasing over adds XX time. of obviously, and with say top gross would has strength X,

really very, continue. as them broader environment. and that you well. to can And cash LTV perspective now, very the that's our For in as to Today, from expect us, see I we still for think the efficient demand it business an see, to speaks trend

Operator

to additional no now remarks. over closing are this registered back at additional the any time. Bob or questions There will floor I pass Bennett for

Robert Bennett

contributed quarter momentum strong revenue Both of EngageSmart execution. first you. adjusted successful business. and our our segments record and results, to of reflecting durability a had achieving EBITDA Thank the with

Our an factors, robust pricing revenue changes, increase in effective achievements were customer several retention. average and including by exceptional per and packaging driven key customer growth, customer,

Conference with to in Technology, speaking you the opportunity remain We this continues positioned of quarter at the take customers. Communications Thank look advantage and proposition Annual Stock William resonate We Annual U.S. our in immense Chicago. compelling and with forward value and bullish Media to very Conference to in again and you well Blair's Boston Global JPMorgan's much. XXrd later XXst Growth market

Operator

EngageSmart Thank Call. This you. today's Quarter First Earnings XXXX concludes

You a wonderful time, disconnect day. and have at this may

Engagesmart (ESMT) 4 May 232023 Q1 Earnings call transcript