Continued Business Momentum Drives First Quarter Revenue Growth of 42%
Company Raises Revenue Guidance
- SMB Revenue up 56% fueled by new customer adds and expansion with existing customers
- Enterprise Revenue up 28% driven by strong go-lives and high adoption rates
EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, today reported financial results for the first quarter ended March 31, 2022.
“EngageSmart had an exceptionally strong start to fiscal year 2022, delivering yet another quarter of record revenue with 42% year-over-year total revenue growth,” said Bob Bennett, EngageSmart CEO. “We continued to see excellent traction in our vertically tailored SaaS solutions, which was driven by robust customer growth and retention. This is a testament to the strength of our business model and our market leadership position in customer engagement software and integrated payments.”
“Businesses move to automation and self-service capabilities with EngageSmart because our digital solutions provide intuitive and frictionless consumer experiences, accelerate the adoption of modern self-service, and meet vertical-specific software needs,” stated Cassandra Hudson, EngageSmart CFO. “In the SMB segment, we delivered 56% year-over-year revenue growth, fueled by new customer adds and expansion with existing customers. We are tailoring our SimplePractice solution to suit our newer verticals and already are seeing strong uptake with speech-language pathologists, occupational therapists, and dietitians. In the Enterprise segment, revenue grew 28% year-over-year. We had a strong quarter with the number of new customers going live on our platform; and our focus on product innovation and improving the customer experience continues to drive high digital adoption rates. Looking ahead, we plan to capitalize on the strong demand for our solutions and the huge market opportunity before us to continue driving profitable growth.”
First Quarter 2022 Financial and Business Performance
- Total Revenue increased 42% to $67.4 million compared to $47.4 million in the first quarter of 2021.
- SMB Revenue increased 56% to $36.5 million compared to $23.3 million in the first quarter of 2021.
- Enterprise Revenue increased 28% to $30.9 million compared to $24.1 million in the first quarter of 2021.
- Gross Profit was $51.3 million, representing 76.2% gross margin, compared to $35.2 million, or 74.2% gross margin, for the first quarter of 2021. Adjusted Gross Profit was $53.0 million, representing 78.6% Adjusted Gross Profit Margin, compared to $36.8 million, or 77.6% Adjusted Gross Profit Margin, for the first quarter of 2021.1
- Net Income was $2.1 million, representing 3.1% net income margin, in the first quarter of 2022, compared to net income of $0.5 million, or 1.0% net income margin, in the first quarter of 2021.
- Adjusted EBITDA was $10.6 million, representing 15.7% Adjusted EBITDA Margin, compared to $7.9 million, or 16.7% Adjusted EBITDA Margin, for the first quarter of 2021.1
- Cash and Cash Equivalents were $256.2 million as of March 31, 2022, compared to $254.3 million as of December 31, 2021.
- Total Number of Customers increased by 32% to 87.8 thousand as of March 31, 2022, compared to 66.6 thousand as of March 31, 2021.
- Total Transactions Processed increased 38% to 34.3 million compared to the 24.9 million in the first quarter of 2021.
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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.
Financial Outlook
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|
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Q2’22 |
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FY’22 |
|
|
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Guidance |
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Guidance |
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Revenue (in millions) |
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$69.0 – $70.5 |
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$290.0 – $294.0 |
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Adjusted EBITDA (in millions) |
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$8.9 – $9.6 |
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$38.0 – $40.0 |
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 expense, net, provision for (benefit from) income taxes, depreciation, amortization of intangible assets, transaction-related expenses, fair value adjustment of acquired deferred revenue, and stock-based compensation, all of which are adjustments to Adjusted EBITDA.
Webcast and Conference Call Information
EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, will report first quarter 2022 financial results before the market opens on Thursday, May 5, 2022. Management will host a conference call to discuss the results at 8:30 a.m. ET.
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 (866) 518-6930 for domestic callers and (203) 518-9822 for international callers. The conference ID is ENGAGESMART, and the program title is EngageSmart Q1 2022 Earnings Call.
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