EverCommerce's Q3 2025: Contradictions Emerge on ZyraTalk Acquisition, Rebate Program, AI Integration, and Macroeconomic Outlook

Date of Call: November 6, 2025

Financials Results

• Revenue: $147.5M in Q3 2025, up 5.3% YOY (subscription & transaction revenue $142.2M, +4.4% pro forma YOY)
• Gross Margin: Adjusted gross profit margin 77.3% in Q3 2025, compared to 78.1% in Q3 2024
• Operating Margin: Adjusted EBITDA margin 31.5% in Q3 2025, compared to 30.1% in Q3 2024 (expanded 140 bps YOY)

Guidance:

• Q4 2025 revenue expected $148M–$152M
• Q4 2025 adjusted EBITDA expected $39.5M–$41.5M
• Full-year 2025 revenue narrowed to $584M–$592M
• Full-year 2025 adjusted EBITDA narrowed to $174.5M–$179.5M (top end increased)
• ZyraTalk contribution to Q4 expected to be immaterial

Business Commentary:

* Revenue Growth and Pro Forma Performance: - EverCommerce reported revenue of $147.5 million for Q3, with a 5.3% year-over-year growth on both a reported and pro forma basis. - Growth was driven by payments revenue growth of 6% year-over-year and the strategic acquisition of ZyraTalk contributing to pro forma results.

• Adjusted EBITDA and Margin Expansion:
• EverCommerce achieved adjusted EBITDA of $46.5 million, beating the top of their guidance range, representing a margin of 31.5%.
• Margin expansion of 140 basis points year-over-year was attributed to cost optimization initiatives, mix shift to higher-margin products, and operational scale economies.

• AI Integration and Strategic Acquisition:
• EverCommerce acquired ZyraTalk, an AI-powered customer engagement solution, to enhance its AI capabilities and focus on vertical SaaS and payments business.
• The acquisition is expected to accelerate AI development and bring production-ready AI platforms, increasing the value proposition to SMB customers.

• Payments Revenue and Growth:
• EverCommerce's payments revenue grew by 6% year-over-year, contributing approximately 21% of overall revenue.

• Growth was driven by investments in product capabilities and go-to-market motions to prioritize payments enablement, activation, and utilization.

• Customer Enablement and Retention:

• By the end of Q3, 276,000 customers were enabled for more than one solution, reflecting a 33% year-over-year growth.
• The increase in customer enablement and utilization rates, particularly in front book attach, is a key driver for revenue, retention, and ultimately profitability.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted revenue of $147.5M, adjusted EBITDA $46.5M (beat guidance) and 140 bps margin expansion. They closed ZyraTalk to accelerate AI roadmap, tightened FY guidance while increasing the top end of adjusted EBITDA, and reported strong free cash flow and deleveraging (~2.1x net leverage).

Q&A:

• Question from Bhavin Shah (Deutsche Bank AG): Can you describe ZyraTalk's business model (subscription vs consumption) and what percentage of your customer base it's suitable for?
  Response: ZyraTalk will be fully integrated into EverCommerce (turnkey, home‑services focused); management is not disclosing a subscription vs usage split now and expects expansion via bolt‑ons/upsell across verticals over time.

• Question from Bhavin Shah (Deutsche Bank AG): Can you elaborate on what played out with the rebate program and what's factored into guidance for Q4?
  Response: Rebates are a small, macro‑sensitive revenue item; Q3 saw ~$1.6M softness due to tariffs/manufacturers, this was factored into guidance and is not expected to be a material continuing headwind.

• Question from Bill (Evercore ISI): Please walk through changes to guidance for the remainder of the fiscal year and any macro trends that drove the change.
  Response: No broad macro weakness other than the small group‑purchasing rebate headwind; strong core SaaS (≈8% growth) and transformation/optimization gains supported tightening guidance and raising the top end of adjusted EBITDA.

• Question from Matthew Hedberg (RBC Capital Markets): How is ZyraTalk priced today and how will pricing evolve after full integration?
  Response: Today it sells as a mix of subscription and usage; going forward the AI receptionist will be sold as SaaS and integrated Agentic features are expected to drive higher SaaS pricing over time.

• Question from Matthew Hedberg (RBC Capital Markets): Do you see pricing shifting from seat‑based to more consumption/usage models in the future?
  Response: No immediate strategic pivot—current pricing mechanisms remain; the company may consider more variable/consumption pricing for 2026+ if market opportunity supports it.

• Question from Jessica Wang (Raymond James): How are spending optimization efforts progressing and how much more leverage remains from reducing third‑party costs?
  Response: Transformation program delivered >$10M of operating cost reductions in 2025, driving >30% adjusted EBITDA; management expects ongoing margin expansion while continuing targeted product investments (LTM capex ≈$25M).

Contradiction Point 1

ZyraTalk Acquisition Integration and Impact

It involves expectations and priorities regarding the integration of the ZyraTalk acquisition, which could impact operational strategies and investor expectations.

How will the ZyraTalk acquisition business model integrate over time? - Bhavin Shah (Deutsche Bank AG, Research Division)

2025Q3: The primary focus is not the revenue model but the capabilities to enhance existing business. - Eric Remer(CEO)

Can you provide an update on the current status of your transformation initiatives and how you assess your progress? - Bhavin S. Shah (Deutsche Bank)

2025Q2: The second phase, which is really to drive further growth and margin expansion, will be enhanced product and market leadership. - Eric Remer(CEO)

Contradiction Point 2

Rebate Program Impact and Strategic Focus

It involves the impact and strategic focus on the rebate program, which could affect financial performance and operational strategies.

Can you explain the rebate program's Q3 performance? - Bhavin Shah (Deutsche Bank AG, Research Division)

2025Q3: Rebate program experienced macroeconomic headwinds, especially due to tariffs in HVAC manufacturing, impacting $1.6 million in Q3. - Ryan Siurek(CFO)

Why not raise rates for the remainder of the year? Are there any macro factors or other considerations we should be aware of for the remainder of the year? - Bhavin S. Shah (Deutsche Bank)

2025Q2: Some of the rebate program near term has been impacted by the tariffs and some of the previously mentioned headwinds. - Ryan Siurek(CFO)

Contradiction Point 3

AI Integration and Impact Across Functions

It involves the expected impact and integration of AI across different functions, which could influence operational efficiency and company strategies.

What is the future of EverCommerce's software pricing, and will it shift to consumption or usage-based models? - Matthew Hedberg (RBC Capital Markets, Research Division)

2025Q3: AI features launched in several product lines, improving efficiency and targeting. - Matthew Feierstein

Can you provide an update on AI and have you observed improvements in R&D (e.g., code suggestion tools), sales and marketing, or customer service? Are there any anecdotal examples of increased efficiency or improved sales outcomes? - Matthew George Hedberg (RBC)

2025Q2: AI chat agents handling 25-50% of support tickets, high customer satisfaction, and significant cost avoidance. - Matthew Feierstein

Contradiction Point 4

Rebate Program Impact and Significance

It involves the impact and significance of the rebate program on the company's revenue and financial performance, which is crucial for investor understanding.

Can you explain what happened to the rebate program in Q3? - Bhavin Shah (Deutsche Bank AG, Research Division)

2025Q3: Rebate program experienced macroeconomic headwinds, especially due to tariffs in HVAC manufacturing, impacting $1.6 million in Q3. Rebates are a small portion of overall revenue but remain a good business. - Ryan Siurek(CFO)

Does the majority of tariff risk affect the EverPro segment? - Aaron Kimson (Citizens)

2025Q1: Rebates historically have been a very small part of our revenue. And they've been profitable historically. - Ryan Siurek(CFO)

Contradiction Point 5

Macroeconomic Impact and Business Performance

It pertains to the company's perspective on macroeconomic conditions and their impact on business performance, which is important for forecasting and investor confidence.

How is spending optimization progressing, and how much additional leverage do you expect in the medium term? - Jessica Wang (Raymond James & Associates, Inc., Research Division)

2025Q3: Business as usual, no degradation in key metrics. Monitoring macroeconomic volatility daily. - Eric Remer(CEO)

How has focusing on payment attachment at point of sale versus future add-on sales affected your sales teams' win rates? - Unknown Analyst (Evercore ISI)

2025Q1: We've seen increases in payment attachment with new customers, integrating the selling motion into SaaS workflows, and using sell-behind efforts. Nuances involve integrated motions and additional go-to-market optimizations, which have proven fruitful in Q1. - Matthew Feierstein(President)