Customer Engagement

EngageSmart Announces Second Quarter 2022 Results

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Customer Engagement

Strong Customer Growth and Adoption Drive Second Quarter Revenue Increase of 43%
Company Raises Revenue Guidance

  • SMB Revenue up 56% fueled by new customer adds and growth from existing customers
  • Enterprise Revenue up 29% driven by strong go-lives and digital adoption

EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, today reported financial results for the second quarter ended June 30, 2022.

“We are excited to report another strong quarter marked by high growth and increased profitability,” said Bob Bennett, EngageSmart CEO. “EngageSmart delivered revenue growth of 43% year over year and Adjusted EBITDA of $12 million, driven by exceptional traction in our vertically tailored SaaS solutions. Our continued success is a result of our solid business model, our market leadership position, and excellent execution by our dedicated team.”

“New customer adds and an increase in average revenue per customer fueled strong momentum across the business,” stated Cassandra Hudson, CFO of EngageSmart. “SMB’s impressive growth of 56% year over year, combined with Enterprise’s robust growth of 29% year over year, highlight the value of our model as it delivers durability, visibility, growth, and cash flow to fuel our flywheel. Our results are driven by strong demand for our solutions, our compelling market position in what we believe are resilient verticals and our product leadership as measured by adoption and retention. Looking ahead, we are enthusiastic about the significant opportunity before us and continue to invest in our solutions to unlock EngageSmart’s full potential.”

Second Quarter 2022 Financial and Business Performance

  • Total Revenue increased 43% to $73.9 million compared to $51.7 million in the second quarter of 2021.
  • SMB Revenue increased 56% to $40.8 million compared to $26.1 million in the second quarter of 2021.
  • Enterprise Revenue increased 29% to $33.0 million compared to $25.6 million in the second quarter of 2021.
  • Gross Profit was $56.1 million, representing 75.9% gross margin, compared to $38.5 million, or 74.3% gross margin, for the second quarter of 2021. Adjusted Gross Profit was $57.8 million, representing 78.2% Adjusted Gross Profit Margin, compared to $40.1 million, or 77.4% Adjusted Gross Profit Margin, for the second quarter of 2021.1
  • Net Income was $6.9 million, representing 9.3% net income margin, in the second quarter of 2022, compared to net loss of $0.2 million, or 0.4% net loss margin, in the second quarter of 2021.
  • Adjusted EBITDA was $12.0 million, representing 16.2% Adjusted EBITDA Margin, compared to $7.8 million, or 15.0% Adjusted EBITDA Margin, for the second quarter of 2021.1
  • Cash and Cash Equivalents were $274.2 million as of June 30, 2022, compared to $254.3 million as of December 31, 2021.
  • Total Number of Customers increased by 29% to 92.6 thousand as of June 30, 2022, compared to 71.8 thousand as of June 30, 2021.
  • Total Transactions Processed increased 35% to 36.1 million compared to 26.6 million in the second 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

With the information available as of August 4, 2022, we are providing the above guidance for the third quarter and full year of 2022, based on current market conditions and expectations. This guidance is subject to various important cautionary factors referenced in the “Forward-Looking Statements” section below.

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) provision for 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

EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, will report second quarter 2022 financial results before the market opens on Thursday, August 4, 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 (800) 891-3840 for domestic callers and (785) 424-1675 for international callers. The conference ID is ENGAGESMART, and the program title is EngageSmart Q2 2022 Earnings Call.

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