EverCommerce Inc. (EVCM) Earnings Call Transcript & Summary

All right. We can get started. Thank you so much for joining us this morning at the EverCommerce session, day 4 of the Goldman Sachs Communacopia and Technology Conference. Eric, thank you so much for joining us this morning.

Appreciate me having come.

Great to have you.

It's great to see you again.

I wanted to start with a little bit of the founding story of the company. And more specifically, the evolution from PaySimple into the breadth of product and the breadth of micro verticals that EverCommerce addresses today. So talk to us a little bit about the decision to expand from PaySimple and the decision to -- decide to address a number of micro verticals versus picking 1 or 2 [indiscernible].

Sure. It's actually a really great question because it really gives the background of why we even created ever commerce. And so if you think about the predecessor, as you mentioned, PaySimple, started PaySimple 2006 with a vision to help service-based small business build, collect, manage and ultimately grow their business. Really great platform, continued to scale. About 6 years ago, what I realized was the needs of the service-based businesses to become more verticalized, even more market verticalized. So for example, if we have 1,000 field service contractors, think about electrician or plumber or HVAC, and we wanted 5,000, 10,000 or today, EverCommerce, we have almost 300,000. We just didn't have the workflows and think about dispatching inventory management in the truck. And because we were horizontal at PaySimple, all the different verticals needed something a little bit more specific. So as I looked at the verticals we're serving, what I saw was a power fragmentation, a bunch of point solutions and nobody was really bringing it all together. That's really whatever commerce set up to do is connect the dots, create end-to-end solutions for these service-based SMBs to really allow them to be more successful. And the last 2 points that I think are really important -- what we saw was the digitization of the service economy happening more and more. We were seeing this on a daily basis. And then the second piece of which just kind of gets to the second part of the question. To take advantage of that digitization was really important for us to own that core system of action. Think of it that ERP for these service SMBs. When you own that system of action, the thing they utilize every day to run their business, that allows them the platform to utilize you for more and more solutions. And so it gets really to the heart of your question of why the market verticals. That system of action is different in all these market verticals. And so the plumber needs something different than a landscape -- we need something different than alarm company because certainly, it's something doesn't sit from the doctor or the salon. So if you want to really own that core workflow, you need to provide them the core solution they need to run their business. It's no different than enterprise 10 years ago. If you provide them that core solution, as they go into this digital evolution, they can start providing more integrated surround sound to the ecosystem.

It allows me to ask about the foundational building blocks that are consistent across the different micro verticals that you address. When we think about some of the emerging software companies that we've had with us over the course week. Most of them will do one system of action really well and then they'll potentially struggle to find a second product or a third vertical to be able to expand over the longer term. So tell us a little bit more on the synergies that you have within the company that allow you to address the breadth of product and the threat of end markets that you do while maintaining profitability.

Yes. And it actually goes to another point, it's hard to go across verticals. One of the advantages that we have is we started horizontal, right? So we started a PaySimple. A lot of companies like, well, we do this really well. And or we look at all this additional TAM we're going to have, and I said, well, you're not going to do that because it's not just the product offering, it's the marketing. So we were really good at marketing a horizontal product to vertical people, and that's hard but we actually got much easier as you go into the verticals and you have a specific vertical solution utilizing that same core marketing competency to that service you can go specific to that customer with a better product offering, a better solution essentially. And so the way we look at this is the better the solutions we have, the easier to use the more cost effective it is to acquire these customers. So we talked about this before, 80% of our marketing is digital. 85% of our new customer acquisition is self-service. So we've gotten really good at being where these customers, again, the S of the SMB acts much more like a consumer than the enterprise business. So getting in front of them where they are, create products that are incredibly easy to buy to onboard and to ultimately use ongoing. And that allows us to have really good LTV to cap and ultimately have over 600,000 customers and on a really profitable company.

You alluded to this in the earlier question, the decision to focus on the of the SMB, in part because of how fragmented it is and how important digitization is at the small company. How do you think about the natural bifurcation in the market where customers become too big for it to make sense for you to target? So a little bit of a TAM targeting question where is the dividing line between small versus – small and making sense for EverCommerce versus small -- medium and not making sense for EverCommerce.

And it's a great question. Every vertical is a little bit different. We have in the alarm space, we have some large central station software that is a little bit larger. But for the most part, our view is we're were really good, and we think there's a huge market opportunity in that fragmented, call it, 1 to 10 employees. Every vertical is a little bit different. If you look at the home field service, 1 to 10 trucks. If you look at doctor practices, 1 to 20 physicians. And then the fitness and wellness, it's really based on locations. But when you think of the Scout, you talk about the TAM that we're going after, we really did size it by really the TAM that we think is addressable to us. And if you look at globally, both the categories we're in and not in but are in that service categories, it's literally $1 trillion down domestically, almost $0.5 trillion. And you and I talked about this specifically in the core 3 verticals we're in today, take $160 billion TAM. So it's just a very, very large market opportunity, which gives us the ability to acquire a lot of customers have a lot of diversification no customer concentration and a real, real long runway in terms of our ability to continue to kind of scale into the markets we're in.

As we dig a little deeper into horizontal vertical. One of the things that has been unique to your business model is the balance of organic versus inorganic development. So talk to us a little bit about back in 2006 and as the company has evolved, the decision to do acquisitions versus perhaps build out some of the foundational building blocks and the specific end markets in-house.

We saw the opportunity. I saw where this could be and where we can grow with this opportunity to build everything organically, you and I would be talking about 10 years from now because it just would be too much. And so the opportunity to fill in the gaps in the ecosystem that we kind of built out with M&A was just really a time scale relevance. How do we get the system of actions in the core verticals that we want to participate in, in a way that makes sense for the scale of this business. But how do we surround those with the horizontal tools that make them more successful. You asked this question earlier, how do you make these vertical businesses more successful and how do you get efficiency? Well, we only own one payments company that goes across all verticals. We own after 2 customer experience solutions based on specific verticals. You own one marketing technology platform that helps with SEO, SEM and lead generation. And so our horizontal platforms that we have allow us to get efficiency across the verticals from a product standpoint. You also get tons of efficiency to just the organizational infrastructure we've created. We've centralized our entire organization. This is one company with many products focusing on different verticals with the same end customers. So the obvious stuff, you've consolidated legal finance, accounting, HR, that's obvious. We've also consolidated and centralized go-to-market, product strategy, product development, business operations, security. So all of that is managed in a centralized space. So whether we're marketing to the landscaper or we're marketing to the doctor the characteristics of those organizations are very, very similar. So we may have within our centralized marketing team, a team specifically focused on health services and one focused on home services but the resources, the people, the technologies they utilize is all done from a centralized standpoint, not on a product standpoint.

Maybe let's get a little more specific on what that integration process like. So if we take one of the acquisitions from the past couple of years, perhaps something like [ Dr. Karna. ] You talked -- you gave a number of ways in which there is a synergy between being able to apply a lot of the foundational overcomes building walks to a potential acquisition. Give us a little more detail on that. What is the integration process looks like? And what do you preserve of the core company? What are you adding and integrating.

So great question. And all of that starts in diligence. So as we're doing diligence, we're really creating a 30, 60, 90, 100-day plan for these acquisitions. And as we really look at them as for the most part, these are products not fully formed companies. So really onboarding the products into our ecosystem. DrChrono is a great example. It really is a great technology. It provides us a down market practice management for single practices across a lot of different key verticals that we wanted to enter into so we have a lot of specialty medical. This was kind of our steel vertical, but horizontal within that vertical. We're able to onboard that, the obvious stuff day one your HR, all of your accounting within 30 to 60 days, you're legal, but really more important to us. Day one , we take over the entire go-to-market strategy. A lot of these organizations are -- don't have the digital wherewithal to kind of market. Their marketing is often expensive. They might be spending money, whether that is or money to just acquire companies, whether that's cost effective or not. So we kind of take all that in-house. And then from an onboarding standpoint, we really believe 2 things in the field, the product development team that's focused on that product that knows the IP really, really well. We integrate them into our overall product strategy group and our road map group to make sure that we are focused on the right development, tighten up the SLAs, tighten up the best practices and then the other thing we lead there is the inside cells that understands that product more effectively. Everything else is actually centralized within the EverCommerce ecosystem. And then that's where we get a lot of efficiencies so we've integrated now our claims processing in the back end. We've integrated our patient pay into the front end. We've integrated into the workflow, and we integrated it into our patient engagement solutions into the front end. So now utilizing DrChrono before stand-alone EHR practice management. Now there's a patient engagement so you can get your online forms, your text reminders before you can actually go to the doctor, doctor gets the check-in, utilizes the UHR, you take patient pay as you be the office, our claims processor that we own is integrated now into the back end for that medical practice as well. And then our patient experience solution sends them reminders to even take additional medication as needed. So that was a really good product. We've made a great product.

The specific way that you think about M&A, you mentioned earlier looking at products rather than companies how else or what other factors are you when you think about what would make a good EverCommerce acquisition?

So there's both why we buy a company and then the tactical side. So if I start with why. They look for 3 things. a company or a product that we're very confident in a vertical we're in, we can sell our 600,000 customer base more valuable solutions buying this product. Secondly, expand geographically in existing verticals and An example of that is we already had a really great salon spot presence in the U.S. We found a leading solution over in New Zealand, which also has offices in U.K. and Australia, and now we have a global footprint with our salon spa software. And the third reason is to go into a new vertical or a new subvertical. And so we were at a really great presence in our home field services, but we actually had a gap in pest control. So we bought a pest control, which was a subvertical within Ever Pro. And now we have a great solution within that vertical itself. And so those are really the reasons we look for something. And then why or if it makes sense, comes down to 3 things. So we feel very confident that the Ever Commerce resources team and the ecosystem could add value to new product. Secondly, this product could add value to the rest of the ecosystem we have. And third, the economics just makes sense. And it kind of gets to probably your next question, right now, the economics don't make sense. There's a disconnect between the private company valuations and public company. The dislocation, which has happened in the public markets, it's just not happened in the private markets yet. So fortunately, we continue to tell people we will continue to grow organically at a really nice pace. We will continue to generate really good profits. And then we will compound this with additional M&A, but we have the ability because of the organic growth profile of the business to be disciplined to be patient and wait for the market to come back to us.

Remind us how should investors be thinking about the typical multiple that you'd be willing to pay for an acquisition and as interest rates go up and the cost of capital changes, does that also change your hurdle rate and your willingness to do M&A.

Yes. I think things have changed as we've gone public because we are sensitive to our own value, whether we agree with it or not, we are sensitive to where we sit in terms of our current value and making sure that what we buy accretive based upon the synergies we bring to the table in addition to a multiple. So historically, on a revenue side, we paid -- again, it's based on many factors that other investors are looking at to based on growth and scale and things like that. Anywhere from 3x to 7x in your revenue and slower growth, more profitable assets, call it, 6 to 15x EBITDA, EBITDA multiples. And so it just depends why it's swath based on the type of solution, the type of profitability and the makeup of its overall growth.

Yes, yes. One of the things as investors or analysts outside looking in that we try to do is figure out what are the products that can move the needle the most over the medium term. With EverCommerce, you have a number of products. And so is there a way to think about the top one to three products that we should be tracking that could really move the needle in terms of revenue growth over the next couple of years.

Well, I'd like -- the way you worded the question is great because the products within the overall ecosystem. And so you're going to have some categories in those products that we just think are going to grow really well I think you had saw a demo recently of our down-market service fusion solution. And we are in -- before I go to that one, we are leading software in most of the key verticals, micro verticals that we're in. Service Fusion is a leading provider of kind of down market, electrical plumbing, HVAC solutions within that category, and it's crushing it. And it's doing a really great job. And we see that as continued growth, and we've been able to add additional value, both to the existing customer base and then the new customer acquisitions. So we've embedded fee generation embedded payments, we have better customer experience in the back end and really almost institutionalized and made that much more strong from a product offering, which we think adds even more opportunity. And the other one – I'll even give it more of a category -- EverHealth. That is a category that we've really kind of come together where the -- from beginning to end, we are now selling as one overall solution. So as I touched on earlier, we have a patient engagement platform. We have EHR practice management solutions, specifically focused for the verticals we're serving. And then we have back-end claims payment providers, specifically for patient payments specifically. So that has been the core solutions were growing really well. When you add the beginning and the end of the full cycle of that patient evolution, you get even increased growth with that. So those are the opportunities that we see are just really, really big for us. But I'm dismissing our salon business is growing extremely nice rate as well. So feel good about the overall ecosystem. And it's really important, especially in this marketplace and the diversification of our business and the sheer scale of the number of customers we have, I think, often gets lost in conversation about SMB being good or bad. And it's really important to note that SMB is just a broad word, and SMB is broken into retail and goods and e-commerce. We're focused on this thing called service commerce. We're focused on that service part of that SMB, which is way more resilient in the marketplaces. Specifically the verticals that we serve. And so when we look at how we believe we're going to continue to grow and we're the runways, a lot of are just the overall value of all the verticals that we serve and the products within those.

I'll pick up on your comment on resiliency and the resiliency of the service economy because I know that the company has data going back through 2006, a number of different economic curious, even within the service economy, there are nuances. There is some improvement. There are some verticals like landscaping that could be more discretionary or more of a nice to have plumbing, which is more of a tap. how do you think about within the customer verticals that you have, are some of them more susceptible to weaker macro? Have you seen any change over?

So we're really fortunate, a little lucky, a little strategic that the verticals that we serve, 80% of them were considered essential during COVID. So we're in...

It's a great data point.

Yes. So we're -- you mentioned people still get the leaks fixed during recessions from the former people, except for myself to get their haircuts during a recession. And most of the people still go to the doctor during a recession. And so the core verticals and the core service verticals that we do serve are pretty resilient. I think we mentioned on our Q2 call, the one area that we saw any kind of softness at all is really in marketing services is the smaller part of our business. And then lead gen is a smaller portion of marketing services. And then home services is a smaller portion of our lead gen within marketing services. And so discretionary spending within the home, which is a really small part of our business within the lead side of things, think about home remodeling, rebath, windows, doors, [indiscernible]. That was the only area that we've seen any type of a pullback. The payments, the software businesses have all been very, very strong at this point in time.

It leads into another demand question around the impact that COVID has had on your business? And you mentioned right at the beginning of this conversation, the concept of digitization in the smallest businesses. How do we think about the potential that the cover you've had all of these catalysts and trigger points for SMBs by EverCommerce. How do we think about the risk that the next 2 or 3 years has few [ point to. ]

Yes, I agree with the first part of it because I do believe the COVID became a catalyst. It was almost like a kick in the butt for these sees -- if you ask me probably even today, but definitely 3 or 4 years ago, who our biggest competition is, I would tell you it's inertia. And it's still not that different today. It's still -- you're dealing with a marketplace that as we landscape providing end-to-end solutions that we serve, it's like 10% penetrated. There's just a huge market opportunity. And we were definitely not a Zoom and COVID kind of bump. It was -- businesses did well on the businesses and health for services. really along the lines of historical. Well It wasn't -- we didn't get this big exponential growth. And we've seen coming out of COVID and even into the recession, the business has operated as expected. So it's less of a everyone got a service and now they don't need anymore. It's really much more -- it was a catalyst to begin to realize you need a digital platform to run your business. And we're seeing more and more of that happening. But we're at the -- we're still in the first or second inning digitalization of the service economy, it doesn't even really be gone because what happens is like we can go back to enterprise 10 years ago, the first thing that happens is people get this core solution. That's great. That becomes a part of it. But now that you have this SaaS platform that connects with the rest of the world, now you're able to kind of expand your digital evolution, your digital footprint, your digital white space in ways you could even consider before because you have that core platform. So we're just in the early stages of that step 1. And then as we talk about, then you embed payments, then you had but customer experience. then you have this full cycle of the plumber walk into your house. You know he's coming because you have a picture of this skinny ball guy named Eric showing up in your house and he fixes your sink and then you can take a payment sells you an ongoing maintenance plan. Then as you walk out the door, you get a reminder to give a review and the review goes on all the websites and then you have an ongoing relationship with them. So that workflow, which seems totally obvious and we all should be doing is in the infancy of the adoption in the marketplace today.

It leads into your question on the customer journey for EverCommerce customers and how you all think about cross-selling so maybe there's a way to frame it from a net retention standpoint or a deal size standpoint, walk us through what your typical lab expansion looks like with your customers?

So every vertical is a little bit different. But for us, our focus, the land is on the system of action. We want to own the core system of action in the core verticals that these businesses are working in every. We want to provide them the solutions to just make them more successful full stop. Once you own that, again, it's our strong premise and core thesis for EverCommerce. Once you own that, and you're able to kind of provide You have the permission to provide more value. So the lowest thinking fruit for us and something we've done for 15 years is embed payments. and the embedded payments is just part of the workflow of these service contractor service providers. So it's an obvious thing they should have within that ecosystem we're providing. So that is the first thing we provide. And then based upon business intelligence and AI that we're tracking within this, that provides us the opportunity to provide more solutions based on the data, based on the integrations or based on the -- I'm sorry, the activity within the software itself. But payments is by far, right now represents about [ 14% ] of our business, a huge growth opportunity. We have $10.1 billion of annual TPV representing, I mean, 12%, 13% of the total opportunity to fully penetrate which is well over $85 billion. And so we see that again, we talked about the early innings, the early innings of penetration. I'll give you an example because the question I get often is, well, that's great. What's the difference between the $10 billion and $80 billion? And why can't you penetrate it. A couple of years ago, we bought a salon software we had about a 25% penetration in terms of their customers accepting the payments. And it would be very clear once we own a software, we're the only show in town. We're the only payments that is allowed to be part of that software because we own that moat around that. Today, 2 years later, we're about 60% penetration in terms of payments. And the difference between the 25% and 16% was twofold. One, create a better workflow experience for that customer create a better POS experience for that customer and then time. So you multiply those together, and you go from 25% to 60%. But to give you an example of that 40%, what they're doing, why it makes those sense in many verticals you take your appointment, you have your check in, you assign the stylist, you give the tips over this one program. And then you take the payment, you actually leave that program over here and do a swipe and they come back here and update it. So it makes no sense to not integrate those 2, but their front desk team trained over here, they're not to do it. And so it just takes time. They need a moment to breathe to train the best person on how you pick the payments over here. I mean it's not difficult, but it's just -- you're dealing with SMB workflows and you just have to be thoughtful that sometimes it takes more time. But eventually, similar to that [ 25% to 60%, ] which I think will be plus [ 80 ] and a little bit more time, we will penetrate much deeper in the payment piece of business.

And the 25% to 60%, what is the implication for the EverCommerce revenue stream that's tied to that? Is it fair to say it's linear? And then relative platform fee essentially a value from that account has doubled? Or help us think about that.

Yes. I mean we gave an example on our last -- in Q2. We just broke out of the one products, but it's -- it could be up to 3 to 1 ARPU on a customer that takes payments that doesn't. You generate almost 200 additional basis points on NRR the customers that take that. And the gross margin on that business is very high. We book net revenue, not gross revenue. So that may -- you can grow faster and lower margins if you want to book grows, but we think it makes more sense to book the actual value to us. And that not only increases their gross margin but mostly hit the bottom line. So it's a huge value when you can get them to uptake additional products and services, and it's a huge focus within the organization to make those workflows work more effectively.

So you mentioned 3:1 on the payment side, you have much more than just payments. How do you think about white space and ARPU, even bigger picture? And then how do you set up your own salespeople to be successful training and enablement on the cross sell.

Great question. And I'm going to go back to the example like in the Ever Health. So that's the category where most -- we're further along, and we've actually centralized both the products from the beginning to end as well as the sales go-to-market. So go-to-market centrally is what we do anyway in terms of the marketing piece of it. But on the sales execution side and EverHealth we've actually consolidated where they can sell all of those solutions within those calls. So they can sell the patient engagement, the EHR, the practice management as well as the back-end claims management solution. So we're getting to the point in certain vertical that were just further along that we've done a better job kind of consolidating that sales effort in that sales cycle. But remember, 85% of our customers are still self-serve. So we are laser focused on making sure that when we're selling something to somebody that the products are that could be found without touch. They could be onboarded without touch and they can be sold with that touch. And then with those customers, we utilize different types of upsell, cross-sell motion. So tons of in product marketing and product marketing happens based on utilization of the software. It happens based upon the flow of it, so you're working through a flow within that plumbing software. And the moment where you should be taking a payment, a payment in pops up and allows you the opportunity to kind of turn that on. If that opportunity and that ARPU expansion is large enough, we will actually -- we have our own customer success team will reach out directly. So all of the motions are already in place, and it's just a matter of executing at a higher level.

I know the company has a lot of detail on the customer success team and specifically the impact of the customer success team has on term. And so it leads to the broader question on churn, which is how does EverCommerce comes manage some of the churn that's inherent in your business? And what are some of the levers that you could pull to potentially reduce churn over time?

So it's every SMB focused business deals with the same thing. And we've been in this market for 16 years. And what you're not going to do is majorly affect your gross churn. You're going to lose 20% to 25% of logos. It just happens. They're going to go out of business or they're going to sign up for something they didn't ultimately need. Where our focus is really on maintaining those customers that are actually not [ illegal. ] When you lose those customers, you usually lose the bottom feeders not the guys that are actually engaging with the process solutions. And so the focus is much more on how you increase your RR, how do you engage the customers quicker, how do you get them to utilize more products? And how do you get them to spend more with the platform by getting more value from the platform essentially. And so it's less on the, yes, do we do everything we can to save a customer, yes. We have all those programs, but we've realized over time, the real value comes in engaging quickly, getting them on board, getting them activated, getting them to take payments, getting them to use multiple solutions, increases your ARPU increases your NRR and that increases your lifetime value.

I'd like to ask about the financial model, and then we will open it up to questions from the audience. The long-term target that you have for organic growth, 15% to 20%. We've just talked about the churn, the inherit in the logos about the levers of cross-sell and upsell. Why is 15% to 20% the right target? How did you arrive at that?

Part of it was historical. We've been consistently been able to take COVID out of it, which I mean we're actually proud that 35% of our business was shut down, and we still grew 8%. So that was actually a good year, not a bad year, and we were incredibly profitable that year. But historically, that -- those are the ranges we've grown in. And we feel very confident even at scale that we can continue to maintain that level of growth based upon the market and the TAM we're going after. And that allows us to also generate existing 20-plus percent operating leverage with, we think, opportunity to kind of grow that as well. So could you look faster, of course, you'd always grow faster. And then was sitting here a year from now like Eric, how do you increase your operating leverage, right? So to us, that's a good motion, 15%, 20% growth, 20-plus percent operating profit is just kind of where we feel very comfortable. And I think what gets lost a lot you look at SMB NRR, yes, we're not going to be 115%, 120% enterprise. The enterprise often have 1,000 customers, 1,500 customers, maybe 2000 customers. We have 600,000 customers going after a marketplace of what is it [ for 100 million ] potential customers, right? And so you don't run out of real estate. We aren't fighting for every last tooth and nail for every last customer because it's a large, large market opportunity. And so when you change the kind of the mindset and say, Great, well, you have 100, we can get to the low 100s, maybe 105, wherever the number is on NRR. But what's your LTV to CAC. Our LTV to CAC is significantly higher than our enterprise counterparts I will also tell you what you're going to hear in another couple of months with a bunch of pros coming out. They're going to say, our sales cycles have elongated. We're going to say other things we have to say that because our sales cycles are literally day-to-day, right? And so we are not selling -- we're not an enterprise sales company selling to other enterprise sales companies. They all pull back. NRR looks really good and going back, right? Ours are really consistent over the diversification of the customers we're going after. So you combine the TAM, the number of customers, the efficiency of our acquisition, our self-serve model and our LTV to CAC, you have a really long runway of profitable growth in front of you.

Excellent. Questions from the audience.

[indiscernible].

So Intuit is obviously an amazing accounting platform and the vast majority of our customers, I think like 75% utilized QuickBooks on the back end. And so we have all of our software APIs back into QuickBooks. And so think about our softwares as your daily workflow management, you wake up in the morning on a plumber, it tells me what schedule where I'm going with GPS integrated as I show up to the house, it's got inventory within my truck. I could take a payment real-time, integrate into that solution. So QuickBooks and for basic -- you can send an estimate, you could take a payments and they may work for some businesses. But our real differentiation is specifically in the verticals we serve is think of us as that workflow management solution that people are utilizing on a daily basis and then use QuickBooks on the back end to manage the books, which ultimately go to the account in which they would manage.

I'll ask a broader question on competition, which is how do you think about competition from a horizontal standpoint, there are software companies that have marketing tools, regeneration tools. From a vertical standpoint, there are some software companies that specialize in, for example, the service verticals. So how do you evaluate the competitive environment? And how do you think about few real competitors?

We have no competitors. The reality is every vertical we serve as different competitors and different types of competitors. And so you really break it down by vertical. If you look at the home field services we are down market, a name that often comes up because they've done an amazing job market themselves as someone like ServiceTitan, right? And ServiceTitan, a great company. They've done a great job in the enterprise space. We're down market. And so just as a point of reference, we have 300,000 contractors, they have 7,000 or 8,000, and it's not better words, just kind of gives you an understanding of where we play versus where they. Play. So in that specific vertical the competitors that we have and every subvertical we have, think of them as subscale $3 million, $5 million, $7 million software providers that are providing solutions within those verticals. Our value prop within those is we take that $5 million, $7 million software, integrate other solutions to make it more valuable market from the way that they just don't have those resources. And we become leading providers and gain market share within those verticals and so if you look at Health Services, again, it's down market and brands, you won't really know. And then in fitness and wellness is probably the most competitive space. And we do run into some better known brands. So Vista owns Mindbody [indiscernible] financial. That part of our business, fitness and wellness is -- overall, it's 12%, the fitness is 6%. So it's a small part of our business, and our focus is more on specialized classes, studio and also bringing, I call it, member engagement versus just having a core solution. So it's connecting the dots to give us value. Others use fitness is a great example. We won World gyms kind of national account because of the connectivity of our ecosystem. We have a CRM integrated to a payment solution, integrated to a core member management. So they have one choke to throat -- throat to choke if they have any issues, and it's one solution. Believe it or not, even in that vertical, there's many solutions, which gets the second part of your question, how do you compete with some of the point solutions within these verticals more and more of these SMBs and certainly, the franchise that own these SMBs, they don't want to connect 7 dots. They don't want to have somebody for [indiscernible] and somebody to manage the [indiscernible] business, somebody to do payments. And so part of the core value proposition is integrating all those into the same workflow. So I could generate a lead. I could see my [indiscernible] go to the customer, I can tap to take a payment. I can get back-end reviews that could posted on to my -- all my different social sites and that I can give them ongoing marketing messaging, all through one platform, so they know where that customer sits versus me as a plumber. And I'm not dismissing them as is, but most of us know that the plumbers are in the field. And they have challenges trying to connect the dots. They don't want to do it. They can't even think about it that we make that easier for them.

Excellent. Let's leave at that.

Excellent.

Thank you so much for your time. We really appreciate you joining us.