EngageSmart Announces Third Quarter 2022 Results
EngageSmart (NYSE: ESMT) reported a robust 42% increase in third-quarter revenue, totaling $78.8 million, driven by strong customer demand. SMB revenue surged 52% to $42.9 million while Enterprise revenue rose 31% to $35.9 million. Gross profit hit $60 million, marking a 76.1% gross margin. The company achieved net income of $6.8 million, reversing a net loss from the previous year. With 97,800 customers, a 26% increase year-over-year, EngageSmart anticipates FY'22 revenue guidance of $300.5 - $302 million, reflecting ongoing digital adoption in its sectors.
- 42% revenue growth year-over-year to $78.8 million.
- SMB revenue increased by 52% to $42.9 million.
- Enterprise revenue rose 31% to $35.9 million.
- Gross profit of $60 million (76.1% gross margin).
- Net income of $6.8 million, compared to a loss in Q3 2021.
- 26% increase in total customers to 97,800.
- None.
Strong Customer Growth and Adoption Drive Third Quarter Revenue Increase of
Company Increases Revenue Guidance
-
SMB Revenue up
52% fueled by new customer adds and growth from existing customers
-
Enterprise Revenue up
31% driven by customer go-lives and continued digital adoption
“The third quarter of 2022 marked our first full year as a public company. Customer demand and appreciation for our solutions resulted in our ability to consistently beat and raise revenue and Adjusted EBITDA guidance each quarter since our IPO,” said
“We remain focused on delivering strong revenue growth with balanced profitability, and are pleased with the continued momentum, stability, and durability we experienced in both segments of our business,” stated
Third Quarter 2022 Financial and Business Performance
-
Total Revenue increased
42% to$78.8 million $55.5 million -
SMB Revenue increased
52% to$42.9 million $28.2 million -
Enterprise Revenue increased
31% to$35.9 million $27.3 million -
Gross Profit was
$60.0 million 76.1% gross margin, compared to$41.3 million 74.3% gross margin, for the third quarter of 2021. Adjusted Gross Profit was$61.9 million 78.5% Adjusted Gross Profit Margin, compared to$43.0 million 77.5% Adjusted Gross Profit Margin, for the third quarter of 2021.1 -
Net Income was
$6.8 million 8.6% net income margin, in the third quarter of 2022, compared to net loss of$8.3 million 14.9% net loss margin, in the third quarter of 2021. -
Adjusted EBITDA was
$13.2 million 16.8% Adjusted EBITDA Margin, compared to$8.7 million 15.6% Adjusted EBITDA Margin, for the third quarter of 2021.1 -
Cash and Cash Equivalents were
$293.5 million September 30, 2022 , compared to$254.3 million December 31, 2021 . -
Total Number of Customers increased
26% to 97,800 as ofSeptember 30, 2022 , compared to 77,400 as ofSeptember 30, 2021 . -
Total Transactions Processed increased
31% to 37.5 million compared to 28.6 million in the third quarter of 2021.
| ________________________ |
1Reconciliations of GAAP to non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA, and Adjusted EBITDA Margin, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below. |
Financial Outlook
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FY'22 |
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Guidance |
Revenue (in millions) |
|
|
Adjusted EBITDA (in millions) |
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|
With the information available as of
A reconciliation of Adjusted EBITDA guidance to net income (loss) on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to interest (income) expense, net, benefit from income taxes, depreciation, amortization of intangible assets, transaction-related expenses, the fair value adjustment of acquired deferred revenue, stock-based compensation, and restructuring charges, all of which are adjustments to Adjusted EBITDA.
Webcast and Conference Call Information
The conference call will be webcast live on EngageSmart’s investor relations website at https://investors.engagesmart.com/events-and-presentations/events/. A replay will be available on the investor relations website following the call.
For investors and analysts wishing to participate in the call, the dial-in numbers are (800) 267-6316 for domestic callers and (203) 518-9783 for international callers. The conference ID is
About
Forward-Looking Statements
Certain statements in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as “expect,” “intend,” “anticipate,” “estimate,” “believe,” “future,” “could,” “should,” “plan,” “aim,” and other similar expressions. These forward-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our financial outlook for the full year 2022 and thereafter, and other statements that are not historical facts. These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: our inability to sustain our rapid growth; failure to manage our infrastructure to support our future growth; our risk management efforts not being effective to prevent fraudulent activities; inability to attract new customers or convert trial customers into paying customers; inability to introduce new features or services successfully or to enhance our solutions; declines in customer renewals or failure to convince customers to broaden their use of solutions; inability to achieve or sustain profitability; failure to adapt and respond effectively to rapidly changing technology, evolving industry standards and regulations and changing business needs, requirements or preferences; real or perceived errors, failures or bugs in our solutions; intense competition; lack of success in establishing, growing or maintaining strategic partnerships; fluctuations in quarterly operating results; future acquisitions and investments diverting management’s attention and difficulties associated with integrating such acquired businesses; general economic conditions (including inflation and rising interest rates), both domestically and internationally, as well as economic conditions affecting industries in which our customers operate; the war in
Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company’s operating results and financial condition are discussed in Item 1A of our Annual Report on Form 10-K for the year ended
Non-GAAP Financial Measures
This press release includes certain performance metrics and financial measures not based on GAAP, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, and Non-GAAP Operating Expenses, as well as key business metrics, including total Number of Customers and total Transactions Processed.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, and Non-GAAP Operating Expenses are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP and should not be considered as an alternative to net income (loss), gross profit, and operating expenses or any other performance measure derived in accordance with GAAP.
We define Adjusted EBITDA as net income (loss) excluding interest (income) expense, net; benefit from income taxes; depreciation; and amortization of intangible assets, as further adjusted for transaction-related expenses, the fair value adjustment of acquired deferred revenue, stock/equity-based compensation, and restructuring charges. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue plus the fair value adjustment of acquired deferred revenue.
We define Adjusted Gross Profit as gross profit as adjusted for the fair value adjustment of acquired deferred revenue, amortization of intangible assets, stock/equity-based compensation, and transaction-related expenses. We define Adjusted Gross Margin as Adjusted Gross Profit divided by revenue plus the fair value adjustment of acquired deferred revenue.
We define Non-GAAP Operating Expenses as GAAP operating expenses excluding stock/equity-based compensation and transaction-related expenses. We define Non-GAAP Operating Expenses as a percentage of revenue as Non-GAAP Operating Expenses divided by revenue plus the fair value adjustment of acquired deferred revenue.
We define Number of Customers as individuals or entities with whom we directly contract to use our solutions.
We define Transactions Processed as the number of accepted payment transactions, such as credit card and debit card transactions, automated clearing house (“ACH”) payments, emerging electronic payments, other communication, text messaging and interactive voice response transactions, and other payment transaction types, which are facilitated through our platform during a given period. We believe Transactions Processed is a key business metric for investors because it directly correlates with transaction and usage-based revenue. We use Transactions Processed to evaluate changes in transaction and usage-based revenue over time.
We calculate our dollar-based net retention rate at the end of a given period by using (a) the revenue from all customers during the twelve months ending one year prior to such period as the denominator and (b) the revenue from all remaining customers during the twelve months ending as of the end of such period minus the revenue from all customers who are new customers during those twelve months as the numerator. We define new customers as customers with whom we have generated less than twelve months of revenue. Acquired businesses are reflected in our dollar-based net retention rate beginning one year following the date of acquisition.
We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, and Non-GAAP Operating Expenses may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate these non-GAAP financial measures in the same manner. We present these non-GAAP financial measures because we consider these metrics to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.
Non-GAAP financial measures assist management in assessing operating performance by removing the impact of items not directly resulting from our core operations, to present operating results on a consistent basis. Management uses these non-GAAP financial measures for planning purposes, including the preparation of our internal annual operating budget and financial projections; to evaluate the performance and effectiveness of our operational strategies; and to evaluate our capacity to expand our business. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income, gross profit, and operating expenses, or other financial statement data presented in accordance with GAAP in our consolidated financial statements.
Disclosure
We disclose information to the public concerning
*For information concerning
*For information provided to the investment community, including news releases, events and presentations, and
*For information provided to the media, including news releases, please visit: investors.engagesmart.com/news/default.aspx
*For additional information, please follow EngageSmart’s social media accounts: www.twitter.com/engagesmartinc, www.facebook.com/EngageSmartInc, and www.linkedin.com/company/engagesmart
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Condensed Consolidated Statement of Operations |
||||||||||||||||
(Unaudited, in thousands, except share and per share amounts) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
78,796 |
|
|
$ |
55,493 |
|
|
$ |
220,020 |
|
|
$ |
154,664 |
|
Cost of revenue |
|
|
18,845 |
|
|
|
14,237 |
|
|
|
52,687 |
|
|
|
39,735 |
|
Gross profit |
|
|
59,951 |
|
|
|
41,256 |
|
|
|
167,333 |
|
|
|
114,929 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
13,986 |
|
|
|
15,287 |
|
|
|
42,270 |
|
|
|
31,990 |
|
Selling and marketing |
|
|
25,906 |
|
|
|
19,096 |
|
|
|
72,262 |
|
|
|
51,224 |
|
Research and development |
|
|
12,978 |
|
|
|
9,132 |
|
|
|
34,011 |
|
|
|
23,947 |
|
Contingent consideration expense |
|
|
— |
|
|
|
1,157 |
|
|
|
— |
|
|
|
1,370 |
|
Restructuring charges |
|
|
— |
|
|
|
(330 |
) |
|
|
— |
|
|
|
(241 |
) |
Amortization of intangible assets |
|
|
2,363 |
|
|
|
2,362 |
|
|
|
7,087 |
|
|
|
7,086 |
|
Total operating expenses |
|
|
55,233 |
|
|
|
46,704 |
|
|
|
155,630 |
|
|
|
115,376 |
|
Income (loss) from operations |
|
|
4,718 |
|
|
|
(5,448 |
) |
|
|
11,703 |
|
|
|
(447 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, including related party interest |
|
|
(121 |
) |
|
|
(3,487 |
) |
|
|
(361 |
) |
|
|
(8,087 |
) |
Other income (expense), net |
|
|
1,116 |
|
|
|
(28 |
) |
|
|
1,466 |
|
|
|
(107 |
) |
Total other income (expense), net |
|
|
995 |
|
|
|
(3,515 |
) |
|
|
1,105 |
|
|
|
(8,194 |
) |
Income (loss) before income taxes |
|
|
5,713 |
|
|
|
(8,963 |
) |
|
|
12,808 |
|
|
|
(8,641 |
) |
Benefit from income taxes |
|
|
(1,057 |
) |
|
|
(671 |
) |
|
|
(2,900 |
) |
|
|
(623 |
) |
Net income (loss) and comprehensive income (loss) |
|
$ |
6,770 |
|
|
$ |
(8,292 |
) |
|
$ |
15,708 |
|
|
$ |
(8,018 |
) |
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.04 |
|
|
$ |
(0.06 |
) |
|
$ |
0.10 |
|
|
$ |
(0.05 |
) |
Diluted |
|
$ |
0.04 |
|
|
$ |
(0.06 |
) |
|
$ |
0.09 |
|
|
$ |
(0.05 |
) |
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
164,427,770 |
|
|
|
149,031,242 |
|
|
|
163,195,976 |
|
|
|
148,200,589 |
|
Diluted |
|
|
169,222,794 |
|
|
|
149,031,242 |
|
|
|
169,064,015 |
|
|
|
148,200,589 |
|
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(in thousands, except share and per share amounts) |
||||||||
|
|
|
|
|
|
|
||
Assets |
|
(unaudited) |
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
293,456 |
|
|
$ |
254,294 |
|
Accounts receivable, net of allowance for credit losses of |
|
|
12,372 |
|
|
|
10,266 |
|
Unbilled receivables |
|
|
5,722 |
|
|
|
3,441 |
|
Prepaid expenses and other current assets |
|
|
11,190 |
|
|
|
7,617 |
|
Total current assets |
|
|
322,740 |
|
|
|
275,618 |
|
Operating lease right-of-use assets |
|
|
28,024 |
|
|
|
— |
|
Property and equipment, net |
|
|
13,426 |
|
|
|
10,968 |
|
|
|
|
425,677 |
|
|
|
425,677 |
|
Acquired intangible assets, net |
|
|
76,219 |
|
|
|
87,920 |
|
Other assets |
|
|
5,018 |
|
|
|
3,811 |
|
Total assets |
|
$ |
871,104 |
|
|
$ |
803,994 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
759 |
|
|
$ |
2,090 |
|
Accrued expenses and other current liabilities |
|
|
33,621 |
|
|
|
25,229 |
|
Contingent consideration liability |
|
|
— |
|
|
|
2,800 |
|
Deferred revenue |
|
|
7,819 |
|
|
|
6,792 |
|
Operating lease liabilities |
|
|
4,557 |
|
|
|
— |
|
Total current liabilities |
|
|
46,756 |
|
|
|
36,911 |
|
Long-term operating lease liabilities |
|
|
28,450 |
|
|
|
— |
|
Deferred income taxes |
|
|
1,324 |
|
|
|
4,224 |
|
Deferred revenue, net of current portion |
|
|
285 |
|
|
|
232 |
|
Other long-term liabilities |
|
|
188 |
|
|
|
5,528 |
|
Total liabilities |
|
|
77,003 |
|
|
|
46,895 |
|
Stockholders' equity: |
|
|
|
|
|
|
||
Preferred stock, par value |
|
|
— |
|
|
|
— |
|
Common stock, par value |
|
|
165 |
|
|
|
162 |
|
Additional paid-in capital |
|
|
808,334 |
|
|
|
787,043 |
|
Accumulated stockholders' deficit |
|
|
(14,398 |
) |
|
|
(30,106 |
) |
Total stockholders’ equity |
|
|
794,101 |
|
|
|
757,099 |
|
Total liabilities and stockholders’ equity |
|
$ |
871,104 |
|
|
$ |
803,994 |
|
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited, in thousands) |
||||||||
|
|
Nine Months Ended |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
15,708 |
|
|
$ |
(8,018 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
13,989 |
|
|
|
13,620 |
|
Stock/equity-based compensation expense |
|
|
10,112 |
|
|
|
7,163 |
|
Contingent consideration expense |
|
|
— |
|
|
|
1,370 |
|
Non-cash operating lease expense |
|
|
3,385 |
|
|
|
— |
|
Deferred income taxes |
|
|
(2,900 |
) |
|
|
(623 |
) |
Loss on disposal of property and equipment |
|
|
22 |
|
|
|
43 |
|
Non-cash interest expense, including loss on extinguishment of debt |
|
|
175 |
|
|
|
4,066 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
(3,573 |
) |
|
|
(3,194 |
) |
Accounts receivable, net |
|
|
(2,106 |
) |
|
|
(2,195 |
) |
Unbilled receivables |
|
|
(2,281 |
) |
|
|
(931 |
) |
Other assets |
|
|
(1,382 |
) |
|
|
(484 |
) |
Accounts payable |
|
|
(1,253 |
) |
|
|
3,622 |
|
Accrued expenses and other current liabilities |
|
|
7,227 |
|
|
|
5,475 |
|
Deferred revenue |
|
|
1,080 |
|
|
|
1,142 |
|
Operating lease liabilities |
|
|
(4,115 |
) |
|
|
— |
|
Other long-term liabilities |
|
|
26 |
|
|
|
(702 |
) |
Net cash provided by operating activities |
|
|
34,114 |
|
|
|
20,354 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment, including costs capitalized for development of internal-use software |
|
|
(4,759 |
) |
|
|
(3,190 |
) |
Net cash used in investing activities |
|
|
(4,759 |
) |
|
|
(3,190 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions |
|
|
— |
|
|
|
331,989 |
|
Proceeds from issuance of common stock to |
|
|
— |
|
|
|
43,236 |
|
Payment to settle fractional shares related to Class A-2 shareholders in connection with the Corporate Conversion |
|
|
— |
|
|
|
(43,236 |
) |
Repayment of long-term debt |
|
|
— |
|
|
|
(114,174 |
) |
Payment of debt issuance costs |
|
|
(23 |
) |
|
|
(747 |
) |
Payment of debt extinguishment costs |
|
|
— |
|
|
|
(90 |
) |
Payments of related party notes |
|
|
— |
|
|
|
(5,900 |
) |
Payments of contingent consideration |
|
|
(1,066 |
) |
|
|
(1,868 |
) |
Proceeds from exercise of stock/equity-based options |
|
|
11,187 |
|
|
|
1,063 |
|
Repurchase and retirement of common shares |
|
|
— |
|
|
|
(51 |
) |
Payments of taxes related to net share settlement of equity awards |
|
|
(468 |
) |
|
|
— |
|
Proceeds from issuance of common stock under employee stock purchase plan |
|
|
463 |
|
|
|
— |
|
Payment of initial public offering costs |
|
|
(286 |
) |
|
|
(2,912 |
) |
Net cash provided by financing activities |
|
|
9,807 |
|
|
|
207,310 |
|
Net increase in cash, cash equivalents and restricted cash |
|
|
39,162 |
|
|
|
224,474 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
254,594 |
|
|
|
29,650 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
293,756 |
|
|
$ |
254,124 |
|
Reconciliation of cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
293,456 |
|
|
$ |
253,824 |
|
Restricted cash within other assets |
|
|
300 |
|
|
|
300 |
|
Total cash, cash equivalents, and restricted cash |
|
$ |
293,756 |
|
|
$ |
254,124 |
|
|
||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Net income (loss) |
|
$ |
6,770 |
|
|
$ |
(8,292 |
) |
|
$ |
15,708 |
|
|
$ |
(8,018 |
) |
Net income (loss) margin |
|
|
8.6 |
% |
|
|
(14.9 |
)% |
|
|
7.1 |
% |
|
|
(5.2 |
)% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit from income taxes |
|
|
(1,057 |
) |
|
|
(671 |
) |
|
|
(2,900 |
) |
|
|
(623 |
) |
Interest (income) expense, net |
|
|
(1,005 |
) |
|
|
3,486 |
|
|
|
(1,127 |
) |
|
|
8,086 |
|
Amortization of intangible assets |
|
|
3,900 |
|
|
|
3,901 |
|
|
|
11,700 |
|
|
|
11,701 |
|
Depreciation |
|
|
816 |
|
|
|
933 |
|
|
|
2,289 |
|
|
|
1,919 |
|
Fair value adjustment of acquired deferred revenue |
|
|
— |
|
|
|
28 |
|
|
|
— |
|
|
|
122 |
|
Stock/equity-based compensation |
|
|
3,798 |
|
|
|
6,603 |
|
|
|
10,112 |
|
|
|
7,163 |
|
Restructuring charges |
|
|
— |
|
|
|
(330 |
) |
|
|
— |
|
|
|
(241 |
) |
Transaction-related expense |
|
|
— |
|
|
|
3,014 |
|
|
|
(38 |
) |
|
|
4,246 |
|
Adjusted EBITDA |
|
$ |
13,222 |
|
|
$ |
8,672 |
|
|
$ |
35,744 |
|
|
$ |
24,355 |
|
Adjusted EBITDA Margin |
|
|
16.8 |
% |
|
|
15.6 |
% |
|
|
16.2 |
% |
|
|
15.7 |
% |
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
Gross profit |
|
$ |
59,951 |
|
|
$ |
41,256 |
|
|
$ |
167,333 |
|
|
$ |
114,929 |
|
Gross margin |
|
|
76.1 |
% |
|
|
74.3 |
% |
|
|
76.1 |
% |
|
|
74.3 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value adjustment of acquired deferred revenue |
|
|
— |
|
|
|
28 |
|
|
|
— |
|
|
|
122 |
|
Amortization of intangible assets |
|
|
1,537 |
|
|
|
1,539 |
|
|
|
4,613 |
|
|
|
4,615 |
|
Stock/equity-based compensation |
|
|
397 |
|
|
|
152 |
|
|
|
660 |
|
|
|
160 |
|
Transaction-related expense |
|
|
— |
|
|
|
29 |
|
|
|
— |
|
|
|
81 |
|
Adjusted Gross Profit |
|
$ |
61,885 |
|
|
$ |
43,004 |
|
|
$ |
172,606 |
|
|
$ |
119,907 |
|
Adjusted Gross Margin |
|
|
78.5 |
% |
|
|
77.5 |
% |
|
|
78.5 |
% |
|
|
77.5 |
% |
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands, except percentages) |
|
|||||||||||||
General and administrative expenses |
|
$ |
13,986 |
|
|
$ |
15,287 |
|
|
$ |
42,270 |
|
|
$ |
31,990 |
|
General and administrative as a percentage of revenue |
|
|
17.7 |
% |
|
|
27.5 |
% |
|
|
19.2 |
% |
|
|
20.7 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock/equity-based compensation |
|
|
(1,832 |
) |
|
|
(5,738 |
) |
|
|
(6,528 |
) |
|
|
(6,192 |
) |
Transaction-related expense |
|
|
— |
|
|
|
(1,212 |
) |
|
|
38 |
|
|
|
(2,163 |
) |
Non-GAAP general and administrative expenses |
|
$ |
12,154 |
|
|
$ |
8,337 |
|
|
$ |
35,780 |
|
|
$ |
23,635 |
|
Non-GAAP general and administrative as a percentage of revenue |
|
|
15.4 |
% |
|
|
15.0 |
% |
|
|
16.3 |
% |
|
|
15.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing expenses |
|
$ |
25,906 |
|
|
$ |
19,096 |
|
|
$ |
72,262 |
|
|
$ |
51,224 |
|
Selling and marketing as a percentage of revenue |
|
|
32.9 |
% |
|
|
34.4 |
% |
|
|
32.8 |
% |
|
|
33.1 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock/equity-based compensation |
|
|
(869 |
) |
|
|
(506 |
) |
|
|
(1,829 |
) |
|
|
(569 |
) |
Transaction-related expense |
|
|
— |
|
|
|
(603 |
) |
|
|
— |
|
|
|
(603 |
) |
Non-GAAP selling and marketing expenses |
|
$ |
25,037 |
|
|
$ |
17,987 |
|
|
$ |
70,433 |
|
|
$ |
50,052 |
|
Non-GAAP selling and marketing as a percentage of revenue |
|
|
31.8 |
% |
|
|
32.4 |
% |
|
|
32.0 |
% |
|
|
32.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development expenses |
|
$ |
12,978 |
|
|
$ |
9,132 |
|
|
$ |
34,011 |
|
|
$ |
23,947 |
|
Research and development as a percentage of revenue |
|
|
16.5 |
% |
|
|
16.5 |
% |
|
|
15.5 |
% |
|
|
15.5 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock/equity-based compensation |
|
|
(700 |
) |
|
|
(207 |
) |
|
|
(1,095 |
) |
|
|
(242 |
) |
Transaction-related expense |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
|
|
(30 |
) |
Non-GAAP research and development expenses |
|
$ |
12,278 |
|
|
$ |
8,912 |
|
|
$ |
32,916 |
|
|
$ |
23,675 |
|
Non-GAAP research and development as a percentage of revenue |
|
|
15.6 |
% |
|
|
16.1 |
% |
|
|
15.0 |
% |
|
|
15.3 |
% |
Disaggregated Revenue |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Enterprise Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transaction and usage-based |
|
$ |
32,620 |
|
|
$ |
24,977 |
|
|
$ |
90,928 |
|
|
$ |
69,517 |
|
Subscription |
|
|
2,280 |
|
|
|
1,946 |
|
|
|
6,517 |
|
|
|
5,663 |
|
Other |
|
|
966 |
|
|
|
354 |
|
|
|
2,298 |
|
|
|
1,811 |
|
Total Enterprise Solutions revenue |
|
|
35,866 |
|
|
|
27,277 |
|
|
|
99,743 |
|
|
|
76,991 |
|
SMB Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transaction and usage-based |
|
|
11,349 |
|
|
|
8,580 |
|
|
|
33,613 |
|
|
|
23,884 |
|
Subscription |
|
|
31,216 |
|
|
|
19,324 |
|
|
|
85,493 |
|
|
|
52,980 |
|
Other |
|
|
365 |
|
|
|
312 |
|
|
|
1,171 |
|
|
|
809 |
|
Total SMB Solutions revenue |
|
|
42,930 |
|
|
|
28,216 |
|
|
|
120,277 |
|
|
|
77,673 |
|
Total revenue |
|
$ |
78,796 |
|
|
$ |
55,493 |
|
|
$ |
220,020 |
|
|
$ |
154,664 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20221103005442/en/
Investor Relations
IR@engagesmart.com
Press:
Quarter Horse PR
Engagesmart@qh-pr.com
Source:
FAQ
What are EngageSmart's third-quarter 2022 financial results?
How did EngageSmart's revenue in Q3 2022 compare to Q3 2021?
What is EngageSmart's FY'22 revenue guidance?
What is EngageSmart's net income for the third quarter of 2022?
How many customers does EngageSmart have as of September 30, 2022?
