EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, today reported financial results for the third quarter ended September 30, 2021.
“We delivered record results in the third quarter as we executed on our mission of simplifying customer and client engagement. We had rock-solid performance with 42% year-over-year total revenue growth,” said Bob Bennett, EngageSmart CEO.
“We founded EngageSmart because activities like paying bills, going paperless, and scheduling appointments shouldn’t be that hard,” continued Bennett. “We set out to create easy-to-use digital self-service software that simplifies customer and client interactions. Our growth in customer count and revenue is an indication of the strong market reception for our vision. Customers are increasingly adopting our vertically tailored customer engagement software and integrated payments capabilities to simplify engagement with their clients by driving digital adoption and self-service.”
Third Quarter 2021 Financial and Business Performance
- Total Revenue increased 42% to $55.5 million compared to $39.0 million in the third quarter of 2020.
- SMB Revenue increased 64% to $28.2 million compared to $17.3 million in the third quarter of 2020.
- Enterprise Revenue increased 25% to $27.3 million compared to $21.8 million in the third quarter of 2020.
- Gross Profit was $41.3 million compared to $29.5 million in the third quarter of 2020. Adjusted Gross Profit was $43.0 million, representing 77.5% Adjusted Gross Profit Margin compared to $31.3 million, or 79.8% Adjusted Gross Profit Margin, for the third quarter of 2020.1
- Net Loss was $8.3 million in the third quarter of 2021, compared to $0.5 million in the third quarter of 2020.
- Adjusted EBITDA was $8.7 million, representing 15.6% Adjusted EBITDA Margin, compared to $8.9 million, or 22.8% Adjusted EBITDA Margin, for the third quarter of 2020.1
- Cash and Cash Equivalents were $253.8 million as of September 30, 2021, compared to $29.4 million as of December 31, 2020.
- EngageSmart completed its initial public offering.
- Total customer count increased by 40% to 77.4 thousand compared to 55.4 thousand in the third quarter of 2020.
- Total transactions processed increased 40% to 28.6 million compared to 20.5 million in the third quarter of 2020.
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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.
“Continued demand by wellness professionals drove more than 60 percent year-over-year revenue growth in our SMB segment for end-to-end practice management software and payments,” said Cassandra Hudson, Chief Financial Officer. “Clinicians prefer our market-leading SimplePractice business software for scheduling appointments, documenting cases, deploying telehealth, enhancing billing, and managing billing and insurance claims, all within one integrated solution.
“The Enterprise segment delivered more than 25 percent year-over-year growth as we continue to capitalize on consumer preferences to engage and transact with easy-to-use digital self-service solutions,” continued Hudson. “Organizations are increasingly turning to our vertically tailored SaaS solutions: InvoiceCloud, DonorDrive, and HealthPay24 to drive digital adoption. Our fully integrated approach to paperless billing, autopay, virtual fundraising, revenue cycle management, and digital banking services such as PayPal and Venmo are building our monthly recurring revenue at a healthy pace.”
Financial Outlook
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FY21 |
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Guidance |
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Revenue (in millions) |
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$211.5 – $213.5 |
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Revenue growth |
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44% – 46% |
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Adjusted EBITDA (in millions) |
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$28.5 – $30.0 |
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Adjusted EBITDA Margin |
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13.5% – 14.1% |
A reconciliation of Adjusted EBITDA guidance to net loss on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to interest expense, net, benefit for income taxes, depreciation, amortization of intangible assets, transaction-related expenses, fair value adjustment of acquired deferred revenue, stock-based compensation, and restructuring charges, all of which are adjustments to Adjusted EBITDA.
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