EVCM

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. EverCommerce (EVCM) is back in focus after releasing second quarter 2026 results, updated guidance, and a leadership change, giving investors fresh detail on the company’s earnings profile and upcoming transition. See our latest analysis for EverCommerce. Despite the latest quarterly results and CEO transition, EverCommerce’s recent share price performance has been mixed. The 7 day share price return declined 15.87% and the 1 year total shareholder return declined 8.11%, which signals fading momentum compared with the modest 90 day share price gain of 4.62%. If EverCommerce’s recent moves have you reassessing your watchlist, this can be a good moment to scan the market for other potential growth stories through the 19 top founder-led companies EverCommerce just posted higher earnings, trimmed its full year guidance and announced a new CEO, yet the share price has already pulled back. Does that mix still suggest more potential upside than downside for new buyers at this point? EverCommerce’s most followed valuation narrative pegs fair value at $13.00, which sits above the last close at $9.97 and frames the recent pullback in a very different light. Read the complete narrative. The fair value story for EverCommerce leans heavily on faster earnings growth than revenue, higher margins and a slimmer share count. Curious which assumptions really do the heavy lifting in that $13.00 figure and how they tie back to future profitability and cash flow. Result: Fair Value of $13.00 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, EverCommerce’s reliance on small business customers and ongoing use of acquisitions means weaker demand or tough integrations could quickly challenge this 23.3% undervalued story. Find out about the key risks to this EverCommerce narrative. While the fair value narrative for EverCommerce leans on earnings forecasts and discounted cash flows, the current P/E of 62x paints a very different picture. It sits almost double the US Software industry average of 31.8x and well above the 36.8x fair ratio. This points to meaningful valuation risk rather than a clear bargain. For a closer look at what this pricing gap could mean in practice, including how it compares with peers and the fair ratio the market could move toward, See what the numbers say about this price — find out in our valuation breakdown. If the mixed signals around EverCommerce leave you unsure, use that hesitation as a cue to review the underlying data quickly and decide where you stand. A useful place to start is by weighing the 3 key rewards and 2 important warning signs. Do not stop with EverCommerce. Use this moment to widen your search, pressure test your thesis, and spot opportunities others may overlook before they move. Target higher potential by scanning companies that look mispriced on fundamentals through the 49 high quality undervalued stocks. Strengthen your downside protection by focusing on businesses filtered through the 85 resilient stocks with low risk scores. Get ahead of the crowd by reviewing companies surfaced in the screener containing 20 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EVCM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 5:00 p.m. ET Chief Financial Officer - Ryan Siurek Chairman and Chief Executive Officer - Eric Remer Incoming CEO - Alex Goor President and the CEO of EverPro - Matt Feierstein CEO of EverHealth - Evan Berlin Operator: Thank you for standing by, and welcome to EverCommerce's Second Quarter 2026 Earnings Call. My name is Carmen, and I will be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded today, August 5, 2026. And I would now like to turn the conference over to Ryan Siurek, Chief Financial Officer for EverCommerce. Please go ahead. Ryan Siurek: Good afternoon, and thank you for joining. Joining me on today's call is Eric Remer, EverCommerce's Chairman and Chief Executive Officer. This call is being webcast with a slide presentation that reviews the key financial and operating results for the 3 months ended June 30, 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, we closed on the sale of the Marketing Technology business on October 31 last year. Our commentary today will center on the continuing operations of our business focused on our EverPro, EverHealth and EverWell verticals. All financial and operating metric results and year-over-year comparisons are presented related 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. Eric Remer: Thank you, Ryan. Before we begin, I'd like to share an important leadership update. As announced this afternoon, after nearly 2 decades leading EverCommerce, I made the decision to step down as CEO, who will continue to serve on the Board of Directors. Effective August 6, Alex Goor will begin serving as Chief Executive Officer and member of the Board of Directors. Building EverCommerce has been the privilege of my professional life. Together, we've grown from a start-up as a public company, serving more than 745,000 customers across our EverPro, EverHealth and EverWell businesses. I'm incredibly proud of what we've built and deeply grateful for the commitment of our employees to simplify and empowering the lives of our customers. I believe this is the right time for both me and EverCommerce to begin our next chapter. The company has a strong foundation, differentiated vertical businesses and a significant opportunity to create even greater value for our customers, our employees and our shareholders. I look forward to supporting Alex and the company as EverCommerce continues to execute on its mission to simplify the lives of small businesses and drive long-term value for our shareholders. Alex will be available as part of our Q&A session at the end of the call. Turning to performance. We delivered a solid quarter with revenue results in line with our midpoint of guidance and adjusted EBITDA exceeding the top end of our guidance range while continuing to invest in the strategic priorities that will support accelerated growth in the second half of 2026 and beyond. During the second quarter, EverCommerce generated revenue of $152 million, consistent with the midpoint of our guidance range, representing a 2.7% year-over-year growth. Adjusted EBITDA for the quarter of $44.5 million exceeded the top end of our guidance range, representing a margin of 29.3%. Our cross-sell motion continues to expand. In the second quarter, we saw approximately 26% growth in customers utilizing more than one solution. EverCommerce is building AI-powered workflows for service SMBs. We offer tremendous value to our customers by providing the system of action necessary to run their businesses with tailored unique workflows, 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 customer base represented a significant 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 $599 million of revenue, representing 3.7% year-over-year growth. We also generated a 29.4% adjusted EBITDA margin and $13 billion of total payments volume, or TPV, each on an LTM basis. Our payment strategy focuses 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 grow activation and utilization. At the end of the second quarter, 314,000 customers were enabled for more than one solution, reflecting 20% year-over-year growth. At the end of the second quarter, approximately 140,000 customers were actively utilizing more than one solution, reflecting 26% year-over-year growth. Over the trailing 12 months, net revenue retention was 94%, with multi-solution customers continue to generate NRR above 100%. The slight reduction in reported NRR was impacted by declining third-party partner revenue within our legacy payments business and other horizontal add-ons such as our customer experience products. We continue to put much of our focus and investment on our fast-growing solutions, and we continue to see outsized payment revenue growth in those 6 solutions. In our top 6 solutions, TPV grew 16.4% year-over-year and now represents 36% of total TPV, up from 31% in the second quarter of 2025. Payments revenue within our top 6 solutions grew 8.5% year-over-year, now representing over 48.5% of total payments revenue. Highlighting the payments performance in our growth solutions is important because this is where we are focusing our investments. The cross-sell metrics I highlighted a moment ago are largely due to the gains in our top 6 solutions. The remainder of our payments business drives meaningful cash flow generation at lower growth. As a reminder, we report our payments revenue on a net basis, and therefore, it incrementally contributes approximately 95% gross margin within our core solutions. As such, payments revenue growth is a meaningful contributor to 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 third quarter and full year 2026 guidance. Ryan Siurek: Thanks, Eric. Total reported revenue in the second quarter was $152 million, up 2.7% from the prior year period. Subscription and transaction revenue, our primary recurring revenue base was $147.4 million. Pro forma revenue adjusted for the acquisition of ZyraTalk, which closed in Q3 2025, was $599 million on an LTM basis, an increase of 3.7% and $152 million for the quarter, an increase of 2%, both on a year-over-year basis. Adjusted gross profit in the quarter was $119.5 million, representing an adjusted gross margin of 78.6%. Second quarter adjusted EBITDA was $44.5 million with an adjusted EBITDA margin of 29.3%. 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 47.1% to 49.3%, representing targeted growth investments across sales, marketing and product development, which include ZyraTalk costs on the post-acquisition period only. These increases for investments and acquisition were partially offset by continued cost discipline. For the LTM period as a percentage of revenue, adjusted expenses increased from 47.3% to 48.4% 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 businesses, including in our AI-powered products. It's important to note that the cash flow metrics shown on Slide 11 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 $28.5 million as compared to the prior year of $27 million. Levered free cash flow was $19.5 million for the quarter and for the trailing 12-month period, we generated more than $71.7 million. Adjusted unlevered free cash flow was $28.7 million in the quarter and $115.4 million for the last 12 months. We ended the quarter with $133 million in cash and cash equivalents and $155 million of undrawn capacity on our revolver, which did step down to $125 million in July 2026. As of June 30, we have $524 million of debt outstanding. Our total net leverage as calculated for our credit facility was approximately 2.2x, reflecting operational performance and free cash generation. This leverage position, together with our liquidity profile, provides meaningful flexibility to pursue our capital allocation priorities. 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 costs 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 focus on AI investments, in the second quarter, we repurchased approximately 1.4 million shares for $14.8 million at an average price of $10.32 per share. Based on the shares repurchased through June 30, 2026, approximately $19.2 million remains under our existing $300 million share repurchase authorization through the end of 2026. I would now like to finish by discussing our outlook for the third quarter and full year of 2026. For the third quarter of 2026, we expect total revenue of $151.5 million to $154.5 million and adjusted EBITDA of $44 million to $46 million. We maintain our full year 2026 guidance from March and continue to expect revenue of $612 million to $632 million and adjusted EBITDA of $183 million to $191 million. Based on our current outlook, however, we now expect full year results to trend toward the lower end of our guidance ranges. This outlook primarily reflects slower-than-expected new customer acquisition in certain EverPro solutions with an expectation of increasing growth from Q3 to Q4 through improved customer acquisition, pricing actions, disciplined expense management and consistency in customer retention. I'd like to briefly address the previously announced CEO transition. The Board and management remain aligned on the company's long-term strategy and growth opportunities. We expect to further explore opportunities to accelerate long-term growth, which could include changes to investment pacing, go-to-market initiatives and capital allocation priorities. We look forward to sharing more regarding these priorities after the transition is complete. I would now like to welcome Alex Goor, EverCommerce's incoming CEO; Matt Feierstein, EverCommerce's President and the CEO of EverPro; and Evan Berlin, the CEO of EverHealth, for the Q&A portion of the call. Operator, we are now ready to begin the question-and-answer session. Operator: [Operator Instructions] Our first question comes from the line of Bhavin Shah with Deutsche Bank. Bhavin Shah: Eric, it's been a pleasure working with you. Maybe first for Alex. Alex, now that you're going to be stepping into the role, kind of can you just talk about what attracted you to EverCommerce? I know it's very early, but like what are the opportunities that you see ahead? Alexander Goor: Yes, I'm very excited to be here and to meet all of you on the phone as well. I mean this is a very healthy company financially with a lot of really great opportunities, really great strong business units and great people. So I think I look at it and I say, I think we can take what we're doing and really accelerate growth, and we have a lot of potential. Bhavin Shah: Got it. And then maybe a follow-up for the rest of the team. Just in terms of -- you talked about the guide for the full year being at the lower end of the range and part of that is new customer acquisition kind of trending slightly below. Like what drives the confidence in that reacceleration in 4Q? What are the changes that you're making to ensure that you're able to get back to where you were? And what else are you thinking about in terms of improving execution as we head into the back half of the year? Ryan Siurek: Bhavin, this is Ryan. A couple of things. It will probably be a couple of us to think the answer here. First, -- with regard to the guide for Q3 and Q4, as we talked about last period, a portion of that is pricing related. A portion of that is really from the organic portions of the business. I would say that from a Q3 to Q4 perspective, we would expect the pricing elements to have relatively high confidence. We put some of those in place currently. We're putting those in Q2, and we put some in place in Q3. Most of the full impact of the pricing increases that we have across various solutions will have their full capabilities in Q4 from a value perspective in terms of revenue. So those are in action and working appropriately. On the organic side of the business, I would say that, that ramps through the year with the more significant portion of that coming through in Q4, but still only a portion of the total growth from a Q4 perspective. If you look at the guide and what we achieved from a Q2 perspective, I would look at it in the context of roughly a 2% increase in growth for Q2, ramping to based on the midpoint of the guide for Q3, 3% and probably at the low end of the guidance range you can infer on the total amount to a little over 5.5% for Q4. On the activities from a go-to-market perspective and new customer acquisition, I think I'll just ask Matt to take that portion of the question. Matthew Feierstein: Yes, for sure. To start, our customer acquisition fundamentals really do remain strong and healthy today. We've got strong end markets. We've got durable customer demand. We've got differentiated products. Like others have noted, there is evolving AI-driven search behavior that has created some headwinds on some organic acquisition in certain product lines in the first half of the year. We are executing against a comprehensive plan that includes technical optimization, AI-focused content, authority building initiatives to improve visibility, position ourselves well as search continues to evolve. We're very confident as we move into H2. We're already starting to see some leading indicators of that work that is impacting those organic traffic trends back in the direction that we'll make improvements in the back half of the year. Operator: Our next question is from Saket Kalia with Barclays. Saket Kalia: Okay. Maybe on that note, actually, right, just to build on the last line of questioning. Eric, maybe for you, why was now the right time to maybe step aside and make a change? And relatedly, Alex, of course, once you get settled in, get to know where the men's room is and all that stuff, where do you want to focus your energies as you get settled in? Eric Remer: Well, I appreciate the question. I'll kick it off. It's been over 20 years. Last year it was 20 years. I kind of had a circle that would be a good time. The opportunity to go into '26 made a lot of sense for where the business was at that time. And I've been talking to the Board for a little bit about when it would make sense, what the timing would make sense. And I think the business is in a really great space. We have 2 strong verticals, the opportunity to bring on talent with Alex through relationships that he previously had. So the combination all came together at the right time and was really a smooth transition for everyone. We have great leadership moving forward, great team that's still going to be here and an opportunity for me to take the next step in my own journey. Alexander Goor: And I'm excited, thanks for welcoming. I'm really going to spend the next 90 days or so trying to get to know the business on a very, very detailed level. But my presumption is that wherever I can bring technology to bear in strengthening our execution and basically doing what we do, but trying to do it in a better and more optimized way will be the near-term path to greater growth. I think there are a lot of possibilities with this company that we'll have. But short term, I think it's going to be really with an eye to applying technology. Saket Kalia: Got it. Got it. That makes sense. Ryan, maybe for my follow-up for you, I'd love to just dig in a little bit more just into the mix shift within the payments business. It's clear that the top 6 solutions are continuing to grow. Maybe the other side of that question is, where do you see the bottom on the other payments business, if that makes sense? Ryan Siurek: Well, we're not looking at that really more as a bottom. We're looking at that as kind of a continued ability to fund the top 6 solutions. They're cash flow accretive, Saket, and we continue to generate real cash flow from that business. at relatively strong margins as well. I would say our focus has been to spend as little capital as possible, but to maintain that cash flow from an overall revenue perspective while we're investing that cash in the top 6 solutions. So in our minds, it's not one or the other. It's both. We want to really continue to maintain what we have from the base perspective in the legacy payments platforms, while we're also growing the top 6. And we continue to have success in the growth in the top 6, which is exactly part of the strategy. Operator: Our next question is from Aaron Kimson with Citizens. Aaron Kimson: I think the first one is a good follow-up on Saket's question there. Can you talk about what drove the legacy payment solution back to year-over-year growth in 2Q? And any visibility you have into it going forward? Ryan Siurek: When you talk -- sorry, say it one more time in terms of the legacy payments, I didn't hear it on our end. Aaron Kimson: Yes. It's back to year-over-year growth in the second quarter. It had been shrinking for the prior couple of quarters that you disclosed it. And then just any visibility you have going into it going forward? Ryan Siurek: Yes, from a revenue perspective. Okay. Yes, I would say, I mean we fully expect that we're going to continue to maintain or grow on the Aaron, you may need to take put on mute or something. We're getting some feedback here. But that will fluctuate from quarter-to-quarter. So we will -- just like any other portions of our revenue business will. But as we've said previously, we are going to continue to maintain from a stability perspective, the revenue in that base, but while we're still focusing on growing the top 6 solutions. So I would not expect that's necessarily going to be in decline. Our objective would be to continue to maintain it while we may not be growing it in a substantial way like we were on the top 6. Aaron Kimson: Got it. And then as a follow-up for Alex, you talked about a significant opportunity to sharpen execution in the press release. I guess 2 questions for you. Number one, how is the opportunity to lead EverCommerce come about? And then what are the 1 or 2 areas you see as the lowest hanging fruit to sharpen execution? Alexander Goor: Well, I have a long-standing relationship with Silver Lake. I've worked in 3 Silver Lake portfolio companies over the last 20 years, and that was kind of the origin of the introduction. I'm going to hold off on answering the second question because I really am at the beginning of my journey. I think that every organization, no matter how well they're executing always has the opportunity to execute better. I think we have -- by virtue of the fact that we have so many touch points with our customers, we have so many opportunities to work to do better with them. Question would be figuring out the ones that drive growth the most and trying to apply investment to them. Operator: Our next question is from Alex Sklar with Raymond James. John Messina: This is John on for Alex. I wanted to ask on EverPro. It sounds like customer adds there have remained slower. And I realize it's only a faster sales cycle, but what gives you the confidence to see that acceleration in the back half of the year? And then on the existing customer side, any color on TPV trends or health of the customer base and competitive environment that you can share there? Ryan Siurek: Yes. I'll start from the back on that. From a TPV perspective, customer -- TPV for our processing merchants remains very stable and healthy. We look at it across the multiple solutions that we have. And there specifically in our top solutions as we've continued to add features, new payment-enabled workflows, making the process easier for someone to get from payment enabled into actively processing, we're actually seeing growth in those metrics as well. And we expect to see that as our payment capabilities become more fulsome and able to take on more of the wallet share of those customers. So that is -- it's a very healthy trend and one that we continue to think that we can impact as we continue to drive the fulsomeness of the payments product suite. On the retention, I think retention is relatively held course for us at EverPro in terms of where our expectations were. And in fact, as we look at Q2, actually, our retention performance was a bit better. That also is going to improve as we continue to integrate payments better, integrate other capabilities across our core systems of action like AI voice reception, our customer experience solutions. And just in general, as we continue to make our systems of action just more valuable, better workflows, integrate AI into those workflows. So again, from a retention standpoint, excited about where we landed from Q2. Your question about confidence in customer acquisition, like I said, we have strong visibility to where there has been softness. It has absolutely been from that organic traffic perspective, and we're quite confident we're doing all of the right things from an AI search optimization standpoint, a traditional search optimization standpoint and are seeing those leading indicators going in the right direction that, again, going back to my comment about our fundamentals are healthy. We've got strong end markets. We've got strong demand, and we've got differentiated products. So that's ultimately what gives us confidence that we will turn that trend. John Messina: Okay. Perfect. And then I wanted to ask one on the M&A environment. Look, as you look at deal flows across the space, maybe can you speak to what you're seeing in deal markets right now? Has there maybe been any falling in like seller expectations or in terms of willingness to accept valuations as they stand today? Eric Remer: Yes, I'll take that, John. From an M&A perspective, obviously, we're not going to -- we don't guide anything in particular. I'd say we stay active in the marketplace. We looked at what the environment is currently. Our focus right now is entirely on the continued transformation of the existing business. Less of a focus from an M&A perspective, but obviously, we don't rule that out. We have recent acquisitions like ZyraTalk. And when we think that it's appropriate and valuable to the business from an ROI point of view, which has actually fueled our ability to move forward in some key AI capabilities. So not really talking about the broader market, but for us, it's going to be like very strategically focused if there's something that would have a higher ROI than us transforming the continued business that we have today. Operator: Our last question comes from Matt Hedberg with RBC. Matthew Hedberg: I just wanted to go back to the kind of the weakness that you saw in EverPro new customer acquisition. To me, it sounds like that's the reason why the full year guide is maybe going to be at the lower end of the range. I'm curious, you talked about improvements that you expect there. Does the guidance imply that you do see that pickup in new business? Or does it imply kind of continued softness on kind of the new business element? Ryan Siurek: I'll answer it first, and if Matt wants to add anything on to that, he can, but thanks for the question, Matt. This is Ryan. I mean our guidance implies what we're seeing currently from a forecast perspective. We're not trying to do anything in our opinion from a herculean perspective of like changing the trend or bending the trajectory. Outside of that, though, we are actually making substantial and continued improvements in the go-to-market and also the search capabilities that Matt talked about. If those have opportunities for improvements beyond what we're seeing today, that could be upside in Q4, but that is not necessarily what we're talking about today. What we're continuing to do is continue to drive improvement in the top of funnel activity so we can continue to drive revenue growth. Matthew Feierstein: Yes. I think Ryan's commentary is spot on. Two things can be true. We are absolutely with urgency working on what we believe will return the organic traffic trends to where they need to. That's not an overnight switch that takes time and engagement. We're seeing the leading indicators of that work going in the direction that we believe. But I think our guidance is, to Ryan's point, more run rate from where we are today with not expecting herculean improvement through the back half of the year. Matthew Hedberg: Great. And then maybe, Matt, just as a follow-up on the EverPro on kind of the weakness, just to double-click on that. Was there a geographic element to it? Like was it a particular region of the U.S., for instance? Or was it more sort of broad-based than that? Matthew Feierstein: No, it's more broad-based in the product lines where we've seen that. And these were product lines that had a pretty significant organic presence from a search perspective. They weren't -- there was nothing geographic about it. These were national and international serving products. Operator: And this will conclude our Q&A session. I will pass it back to Eric Remer for final comments. Eric Remer: Thank you again for joining us today. As we look ahead, EverCommerce is well positioned with strong vertical software businesses, a clear strategy centered on AI, payments and multi-solution adoption. While there is still important work ahead, I remain confident in the team's ability to execute and capitalize on the significant opportunities in front of us. On a personal note, as this is my final earnings call as CEO, I want to sincerely thank our investors for the trust and support throughout this journey. Most importantly, I want to thank our employees, past and present, whose passion, dedication and commitment have built EverCommerce into the company of today. I look forward to supporting Alex and leadership team to lead the company to the next phase of growth, innovation and impact. Thank you again for joining us today. Operator, this concludes our call. Operator: And thank you all for participating. You may now disconnect. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed solid Q2 performance to the expansion of the cross-sell motion, with customers utilizing multiple solutions growing 26% year-over-year. The company is pivoting toward AI-powered workflows for service SMBs, positioning its software as a 'system of action' rather than just a record-keeping tool. Performance in the 'top 6' growth solutions is driving the narrative, with these products now representing over 48.5% of total payments revenue and showing 16.4% TPV growth. Net Revenue Retention (NRR) of 94% was impacted by declining third-party partner revenue in legacy payments, though multi-solution customers maintain NRR above 100%. Strategic focus remains on the EverPro and EverHealth verticals, which together account for approximately 95% of consolidated revenue. The transition from founder Eric Remer to new CEO Alex Goor is framed as a natural evolution to leverage Goor's technology background for the next growth phase. Full-year 2026 results are expected to trend toward the lower end of guidance due to slower-than-expected new customer acquisition in specific EverPro solutions. Management anticipates a growth acceleration from Q3 to Q4, primarily driven by the full-period impact of pricing actions implemented in the second and third quarters. The outlook assumes a gradual recovery in organic traffic through technical optimization and AI-focused content to counter evolving search engine behaviors. Future strategic shifts may include changes to investment pacing and go-to-market initiatives as the new CEO completes a 90-day business review. Capital allocation will prioritize AI investments and share repurchases over aggressive M&A, which is currently described as 'strategically focused' rather than a primary driver. The company completed the divestiture of its Marketing Technology business in late 2025, making year-over-year cash flow comparisons not fully comparable. A leadership transition effective August 6, 2026, sees Alex Goor succeeding founder Eric Remer as CEO. Management identified a specific headwind in organic customer acquisition caused by evolving AI-driven search behaviors affecting certain product lines. The company maintains a significant debt load of $524 million, though it is mitigated by $425 million in interest rate swaps through late 2027. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expressed high confidence in pricing-related revenue gains for Q4, as most increases will reach full capability by then. Organic growth recovery is expected to be gradual rather than a 'herculean' overnight shift, supported by leading indicators in search optimization. The legacy payments business is managed as a cash flow engine to fund investments in the top 6 growth solutions. Management clarified that they aim for stability in the legacy base rather than substantial growth, prioritizing capital for higher-ROI segments. Incoming CEO Alex Goor plans a 90-day deep dive into the business units to identify execution gaps. Goor intends to apply his technology background to optimize existing operations and strengthen execution as the primary path to accelerated growth. The softness in customer adds is broad-based across specific product lines rather than tied to a particular geographic region. The issue is specifically linked to products that previously relied heavily on organic search traffic, which is now being disrupted by AI search trends.

EverCommerce (EVCM) came out with quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.03 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -50.00%. A quarter ago, it was expected that this business software company would post earnings of $0.03 per share when it actually produced earnings of $0.04, delivering a surprise of +33.33%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. EverCommerce, which belongs to the Zacks Internet - Software industry, posted revenues of $152.02 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.12%. This compares to year-ago revenues of $148.01 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. EverCommerce shares have lost about 1.2% since the beginning of the year versus the S&P 500's gain of 13%. While EverCommerce has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for EverCommerce was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.20 on $156.88 million in revenues for the coming quarter and $0.69 on $618.33 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Chegg (CHGG), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This an online learning platform is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of -150%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Chegg's revenues are expected to be $49.78 million, down 52.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EverCommerce Inc. (EVCM) : Free Stock Analysis Report Chegg, Inc. (CHGG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in EverCommerce Inc.? Here are five stocks we like better. Second-quarter revenue rose 2.7% year over year to $152 million, while adjusted EBITDA reached $44.5 million and exceeded guidance. EverCommerce maintained its 2026 outlook but now expects revenue and EBITDA to land near the lower ends of the ranges because of slower new-customer acquisition in some EverPro offerings. CEO Eric Remer will step down Aug. 6 after nearly two decades, remaining on the board; Alex Goor will succeed him. Management is prioritizing technology, AI-powered workflows and improved execution under the new leadership. EverCommerce attributed EverPro acquisition weakness to changing AI-driven search behavior, while retention remained on plan. The company continued expanding cross-selling and payments, with multi-solution customers up 20% year over year and $14.8 million spent on share repurchases during the quarter. EverCommerce (NASDAQ:EVCM) reported second-quarter revenue that grew 2.7% year over year to $152 million, while adjusted EBITDA of $44.5 million exceeded the company’s guidance range. The company maintained its full-year outlook but said results are now expected to trend toward the lower end of its revenue and adjusted EBITDA ranges, reflecting slower-than-expected new customer acquisition in certain EverPro offerings. The earnings call also marked a leadership transition. Chairman and Chief Executive Officer Eric Remer said he would step down as CEO effective Aug. 6 after nearly two decades leading the company, while remaining on EverCommerce’s board. Alex Goor will become CEO and join the board. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “Building EverCommerce has been the privilege of my professional life,” Remer said, citing the company’s evolution from a startup into a public company serving more than 745,000 customers across its EverPro, EverHealth and EverWell businesses. Revenue for the second quarter was in line with the midpoint of EverCommerce’s guidance range. Subscription and transaction revenue, the company’s primary recurring revenue base, totaled $147.4 million. On a pro forma basis including the ZyraTalk acquisition, which closed in the third quarter of 2025, revenue was $152 million for the quarter, up 2% year over year. → 3 Drone Stocks That Should Soar After the Summer Slump Adjusted gross profit was $119.5 million, producing an adjusted gross margin of 78.6%. Adjusted EBITDA rose to $44.5 million, equal to a 29.3% margin. Chief Financial Officer Ryan Siurek said adjusted operating expenses increased as a percentage of revenue to 49.3% from 47.1% a year earlier, driven by targeted investments in sales, marketing and product development, including post-acquisition ZyraTalk costs. Those investments were partially offset by continued cost discipline. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure For the third quarter, EverCommerce expects: Revenue of $151.5 million to $154.5 million. Adjusted EBITDA of $44 million to $46 million. The company maintained its full-year 2026 guidance for revenue of $612 million to $632 million and adjusted EBITDA of $183 million to $191 million. However, Siurek said EverCommerce now expects results to land near the lower end of those ranges. Management expects growth to increase from the second through fourth quarters, aided by pricing actions, improved customer acquisition efforts, expense discipline and stable customer retention. Siurek said pricing initiatives have already been implemented across several solutions, with their fuller revenue impact expected in the fourth quarter. EverCommerce said slower customer acquisition in certain EverPro solutions was the primary factor affecting its outlook. Matt Feierstein, EverCommerce’s president and CEO of EverPro, said the softness was linked to evolving AI-driven search behavior that affected organic customer acquisition in some product lines during the first half of the year. Feierstein said the issue was broad-based among products with substantial organic search exposure rather than concentrated in a specific geographic region. He described the affected offerings as national and international-serving products. The company is pursuing technical optimization, AI-focused content and authority-building initiatives intended to improve visibility as search behavior changes. Feierstein said the company has begun to see leading indicators move in the desired direction, although he and Siurek stressed that the full-year outlook does not assume an immediate or unusually large recovery in customer acquisition. “We are absolutely and with urgency working on what we believe will return the organic traffic trends to where they need to,” Feierstein said. “That’s not an overnight switch.” EverCommerce also said retention in EverPro remained in line with expectations and was somewhat better during the second quarter. Feierstein said payment integration, customer-experience tools, AI voice reception and other workflow capabilities could further improve the value proposition for existing customers. Management highlighted continued expansion in multi-solution adoption. At the end of the quarter, 314,000 customers were enabled for more than one solution, up 20% year over year. About 140,000 customers were actively using more than one solution, up 26% from a year earlier. Over the trailing 12 months, net revenue retention was 94%. Multi-solution customers generated net revenue retention above 100%, according to the company. EverCommerce said reported net revenue retention was affected by declining third-party partner revenue in its legacy payments business and certain horizontal add-on products. The company’s six priority growth solutions generated 16.4% year-over-year total payments volume growth and represented 36% of total payments volume, up from 31% in the second quarter of 2025. Payments revenue in those solutions increased 8.5% and accounted for more than 48.5% of total payments revenue. Remer said EverCommerce is focused on AI-powered workflows for service-oriented small and midsize businesses, including home field services through EverPro, medical practices through EverHealth and wellness providers through EverWell. EverPro and EverHealth together represent about 95% of consolidated revenue. Goor said his initial focus will be learning the business in detail during his first roughly 90 days as CEO. He said he expects technology to play a central role in improving execution and growth. “Wherever I can bring technology to bear in strengthening our execution and basically doing what we do, but trying to do it in a better and more optimized way, will be the near-term path to greater growth,” Goor said. EverCommerce generated $28.5 million in cash flow from operations during the quarter, compared with $27 million in the prior-year period. Levered free cash flow was $19.5 million for the quarter and more than $71.7 million for the trailing 12 months. Adjusted unlevered free cash flow totaled $28.7 million in the quarter and $115.4 million over the trailing 12 months. Siurek noted that year-over-year comparisons for cash-flow measures are not fully comparable because they include cash generated by the divested Marketing Technology Solutions business through Oct. 31, 2025. At June 30, EverCommerce had $133 million of cash and cash equivalents, $524 million of debt outstanding and total net leverage of about 2.2 times under its credit facility. The company also had $155 million of undrawn revolver capacity at quarter-end, though that capacity stepped down to $125 million in July. During the quarter, EverCommerce repurchased approximately 1.4 million shares for $14.8 million, or an average price of $10.32 per share. About $19.2 million remained under its existing $300 million share repurchase authorization through the end of 2026. EverCommerce, Inc is a provider of cloud-based software-as-a-service (SaaS) solutions designed for local service businesses. The company delivers an integrated platform that helps organizations manage customer interactions, streamline operations and facilitate recurring revenue. By combining multiple functions into a single interface, EverCommerce aims to simplify back-office processes and enhance the overall customer experience. The company’s offerings encompass tools for appointment scheduling, payment processing, client relationship management, marketing automation, reputation management and reporting analytics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "EverCommerce Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

DENVER, Aug. 05, 2026 (GLOBE NEWSWIRE) -- EverCommerce Inc. ("EverCommerce" or the "Company") (NASDAQ: EVCM), a leading service commerce platform, today announced financial results for the quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Revenue from continuing operations of $152.0 million, an increase of 2.7% compared to $148.0 million for the quarter ended June 30, 2025. Pro Forma Revenue increased 2.0% to $152.0 million, compared to $149.0 million for the quarter ended June 30, 2025. Subscription and transaction fees revenue from continuing operations of $147.4 million, an increase of 3.2% compared to $142.8 million for the quarter ended June 30, 2025. Pro Forma subscription and transaction fees revenue increased 2.4% to $147.4 million, compared to $143.9 million for the quarter ended June 30, 2025. Net income from continuing operations was $9.7 million, or $0.05 per basic and diluted share, for the quarter ended June 30, 2026, compared to $5.8 million, or $0.03 per basic and diluted share, for the quarter ended June 30, 2025. Adjusted EBITDA from continuing operations was $44.5 million for the quarter ended June 30, 2026, compared to $45.0 million for the quarter ended June 30, 2025. "Evercommerce’s second quarter results were in-line with the midpoint of guidance range for revenue and exceeded the top end of guidance range for Adjusted EBITDA.” said Eric Remer, Evercommerce’s Founder and CEO.  “I'm proud of what our team accomplished during the quarter and, more importantly, of the Company we've built together, While our outlook for the balance of 2026 has moderated and we now expect results toward the lower end of our guidance ranges, I remain confident in the strength of our platform, our customer relationships and our long-term strategy. As the Company begins its next chapter with Alex as CEO, he will focus on accelerating long-term growth and continuing to create value for our customers, employees and shareholders." A reconciliation of GAAP to Non-GAAP measures has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures and Key Performance Metrics.” Share Repurchases The Company repurchased and retired 1.4 million shares of common stock for approximately $14.8 million during the three months ended June 30, 2026. As of June 30, 2026, $19.2 million remained available under the Repurchase Program. Repurchases under the program may be made from time to time in the open market at prevailing market prices or in privately negotiated transactions. Open market repurchases will be structured to occur within the pricing and volume requirements of Rule 10b-18. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of common stock and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion. The Company expects to fund repurchases with cash on hand. Business Outlook Based on information as of today, August 5, 2026, the Company is issuing the following financial guidance for the third quarter 2026 and full year 2026. Third Quarter 2026: Revenue is expected to be in the range of $151.5 million to $154.5 million. Adjusted EBITDA is expected to be in the range of $44 million to $46 million. Full Year 2026: Revenue is expected to be in the range of $612 million to $632 million. Adjusted EBITDA is expected to be in the range of $183 million to $191 million. Based on our current outlook, we now expect full-year results to trend toward the lower end of our guidance ranges. A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to certain charges excluded from this non-GAAP measure; in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. It is important to note that these charges could be material to EverCommerce's results computed in accordance with GAAP. Conference Call Information EverCommerce’s management team will hold a conference call to discuss our second quarter 2026 results and outlook today, August 5, 2026, at 5:00 p.m. ET. Please visit the "Investor Relations" page of the Company's website (https://investors.evercommerce.com) for both telephonic and webcast access to this call as well as a copy of the presentation materials used on the call. An archive replay will be available following the conclusion of the call. Investor ContactRyan SiurekChief Financial [email protected] Media ContactJeanne TroganVP of [email protected] About EverCommerce EverCommerce (Nasdaq: EVCM) is an AI platform for the service economy, enabling more than 745,000 SMB customers worldwide with software that helps them schedule and manage work, communicate with customers and patients, bill and get paid, and build lasting customer relationships. With its EverPro, EverHealth, and EverWell brands specializing in the Home, Health, and Wellness service industries, EverCommerce delivers AI-driven workflows that matter most so service professionals can spend more time delivering great outcomes and less time on administrative work. Learn more at EverCommerce.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation, statements regarding our future operations and financial results, including our guidance, AI based tools and anticipated expansion efforts, future stock repurchases, our potential for growth and our strategy. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our limited operating history and evolving business; our historical growth rates may not be sustainable or indicative of future growth; we have experienced net losses in the past and we may not achieve profitability in the future; we may continue to experience significant quarterly and annual fluctuations in our operating results due to a number of factors, which makes our future operating results difficult to predict; in order to support the growth of our business and our acquisition strategy, we may need to incur additional indebtedness or seek capital through new equity or debt financings; we may not be able to continue to expand our share of our existing vertical markets or expand into new vertical markets; we face intense competition in each of the industries in which we operate; the industries in which we operate are rapidly evolving and the market for technology-enabled services that empower SMBs is relatively immature and unproven; we are subject to economic and political risk, the business cycles of our clients and changes in the overall level of consumer and commercial spending, which could negatively impact our business, financial condition and results of operations; we are dependent on payment card networks, such as Visa and MasterCard, and payment processors, such as Worldpay and PayPal, and if we fail to comply with the applicable requirements of our payment networks or our payment processors, they can seek to fine us, suspend us or terminate our agreements and/or terminate our registrations through our bank sponsors; the inability to keep pace with rapid developments and changes in the electronic payments market or to introduce, develop and market new and enhanced versions of our software solutions; real or perceived errors, failures or bugs in our solutions; our and our third-party providers' exposure to cybersecurity risks and incidents; our use of AI technologies and evolving regulatory framework governing the use of such technologies; our estimated total addressable market is subject to inherent challenges and uncertainties; failure to effectively develop and expand our sales and marketing capabilities; impairment in the value of our goodwill or intangible assets; our information technology systems and our third-party providers’ information technology systems, including Worldpay, PayPal and other payment processing partners, may fail or our third-party providers may discontinue providing their services or technology generally or to us specifically; the impact of a future pandemic, epidemic or outbreak of an infectious disease on our business, financial condition and results of operations, as well as the business or operations of third parties with whom we conduct business; our success in achieving our objectives through acquisitions, divestitures or other strategic transactions; our revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets; risks related to scrutiny on environmental sustainability and social initiatives; our ability to adequately protect or enforce our intellectual property and other proprietary rights; risk of patent, trademark and other intellectual property infringement claims; the impact of our use of AI technologies on our ability to obtain intellectual property protection in our solutions; risks related to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations; risks related to our sponsor stockholders agreement and qualifying as a “controlled company” under the rules of The Nasdaq Stock Market; as well as the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 and updated by our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. Non-GAAP Financial Measures and Key Performance Metrics EverCommerce has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). EverCommerce uses these non-GAAP financial measures internally in analyzing its financial results and believes that use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing EverCommerce’s financial results with other companies in its industry, many of which present similar non-GAAP financial measures. Unless otherwise indicated, all non-GAAP financial measures are presented on the basis of continuing operations only. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with EverCommerce’s consolidated financial statements prepared in accordance with GAAP. A reconciliation of EverCommerce’s historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation. Pro Forma Revenue, Pro Forma Subscription and Transaction Fees Revenue, Pro Forma Revenue Growth Rate, Pro Forma Subscription and Transaction Fees Revenue Growth Rate. Pro Forma Revenue, Pro Forma Subscription and Transaction Fees Revenue, Pro Forma Revenue Growth Rate, and Pro Forma Subscription and Transaction Fees Revenue Growth Rate are key performance measures that our management uses to assess our consolidated operating performance from continuing operations over time. Management also uses these metrics for planning and forecasting purposes. Our year-over-year Pro Forma Revenue, Pro Forma Subscription and Transaction Fees Revenue, Pro Forma Revenue Growth Rate, and Pro Forma Subscription and Transaction Fees Revenue Growth Rate are calculated as though all acquisitions and divestitures completed as of the end of the latest period were completed as of the first day of the prior year period presented. In calculating Pro Forma Revenue, Pro Forma Subscription and Transaction Fees Revenue, Pro Forma Revenue Growth Rate, and Pro Forma Subscription and Transaction Fees Revenue Growth Rate, we add the revenue from acquisitions for the reporting periods prior to the date of acquisition (including estimated purchase accounting adjustments) and exclude revenue from divestitures for the reporting periods prior to the date of divestiture, and then, calculate our revenue growth rate between the two reported periods. As a result, these metrics include pro forma revenue from businesses acquired and excludes revenue from businesses divested of during the period, including revenue generated during periods when we did not yet own the acquired businesses and excludes revenue prior to the divestiture of the business. In including such pre-acquisition revenue and excluding pre-divestiture revenue, these metrics allow us to measure the underlying revenue growth of our business as it stands as of the end of the respective period, which we believe provides insight into our then-current operations. Pro Forma Revenue, Pro Forma Subscription and Transaction Fees Revenue, Pro Forma Revenue Growth Rate, and Pro Forma Subscription and Transaction Fees Revenue Growth Rate do not represent organic revenue generated by our business as it stood at the beginning of the respective period. Pro Forma Revenue, Pro Forma Subscription and Transaction Fees Revenue, Pro Forma Revenue Growth Rate, and Pro Forma Subscription and Transaction Fees Revenue Growth Rate are not necessarily indicative of either future results of operations or actual results that might have been achieved had the acquisitions and divestitures been consummated on the first day of the prior year period presented. We believe that these metrics are useful to investors in analyzing our financial and operational performance period over period and evaluating the growth of our business, normalizing for the impact of acquisitions and divestitures. These metrics are particularly useful to management due to the number of acquired entities. Adjusted Gross Profit. Adjusted Gross Profit is a key performance measure that our management uses to assess our operational performance, as it represents the results of revenues and direct costs, which are key components of our operations. We believe that this non-GAAP financial measure is useful to investors and other interested parties in analyzing our financial performance because it reflects the gross profitability of our operations, and excludes the indirect costs associated with our sales and marketing, product development, general and administrative activities, and depreciation and amortization, and the impact of our financing methods and income taxes. Gross profit is calculated as total revenues less cost of revenues (exclusive of depreciation and amortization), amortization of developed technology, amortization of capitalized software and depreciation expense (allocated to cost of revenues). We calculate Adjusted Gross Profit as gross profit adjusted to exclude depreciation and amortization allocated to cost of revenues. Adjusted Gross Profit should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss) or profitability. Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are key performance measures that our management uses to assess our financial performance and are also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because they provide a comparable overview of our operations across historical periods. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of net income (loss) to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation. Adjusted EBITDA and Adjusted EBITDA margin are used by our management team as additional measures of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA and Adjusted EBITDA margin help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income (loss) or income (loss) from continuing operations. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Our Management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies. We calculate Adjusted EBITDA as net income (loss) adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation, and transaction-related and other non-recurring or unusual costs. Other amortization includes amortization for capitalized contract acquisition costs. Transaction-related costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. Other non-recurring or unusual costs are expenses such as impairment charges, (gains) losses from divestitures, system implementation costs including amortization of cloud-based software implementation costs, executive separation costs, severance expense related to planned restructuring activities, and costs associated with integration and transformational improvements. Transaction-related and other non-recurring or unusual costs are excluded as they are not representative of our underlying operating performance. Adjusted EBITDA should be viewed as a measure of operating performance that is a supplement to, and not a substitute for, operating income or loss, net earnings or loss and other GAAP measures of income (loss).