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United States securities and exchange commission logo
May 26, 2021
Marc Thompson
Chief Financial Officer
EverCommerce Inc.
3601 Walnut Street, Suite 400
Denver, Colorado 80205
Re: EverCommerce Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted May 10,
2021
CIK No. 0001853145
Dear Mr. Thompson:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
April 27, 2021 letter.
Amendment No. 1 to Draft Registration Statement on Form S-1 submitted
May 10, 2021
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview, page 62
1. We note your response
and revised disclosures to prior comment 8. In order to support
your disclosure that
you attract customers both from acquisitions and organically, which
you indicate is a key
growth strategy, and to balance your disclosure of revenue related to
acquisitions in each
period, please further revise to indicate, at minimum, how much of
your increase in
customers was due to acquisitions in each period.
Marc Thompson
FirstName LastNameMarc Thompson
EverCommerce Inc.
Comapany
May NameEverCommerce Inc.
26, 2021
May 26,
Page 2 2021 Page 2
FirstName LastName
2. We note your response to prior comment 8. Please provide us with your
pro forma
revenue retention rate for each of the quarters in fiscal 2019 and
2020 as well as the first
quarter of 2021.
3. We note your response and revised disclosures to prior comment 10.
Please revise to
clarify whether direct sales and marketing costs included in this
measure relate to
customers obtained through your various acquisitions. Also, further
revise to clearly state
this metric is not based on GAAP information and to address any
factors that may
positively or negatively impact the calculation of this metric.
Key Business and Financial Metrics, page 67
4. We note your response and revised disclosures to prior comment 12.
However, it is still
unclear how this measure reflects the "organic growth" of your
business. In this regard,
organic revenue growth is typically attributable to increased sales
from your own business
operations and not growth generated through acquisitions. Please
revise to accurately
describe what this measure represents, which is pro forma revenue from
businesses
acquired during the period including revenues generated during periods
when you did not
yet own the businesses, and not organic revenue generated by your own
business
operations.
Non-GAAP Financial Measures, page 68
5. We note your response to prior comment 13. While we note that you do
not allocate
depreciation and amortization to cost of revenue for income statement
presentation
purposes, in order to reconcile this non-GAAP measure to the most
directly comparable
GAAP measure of gross profit you should provide a calculation of gross
profit which
includes the allocated portion of amortization and depreciation to
cost of revenue. Please
revise. Refer to Item 10(e)(i)(A) of Regulation S-K and SAB Topic
11.B.
6. We note your response to prior comment 14. We continue to believe that
your
purchase accounting adjustments for deferred revenue substitutes
individually tailored
recognition and measurement methods for those of GAAP. Please revise
to remove these
adjustments. Refer to Question 100.04 of the Non-GAAP Compliance and
Disclosure
Interpretations and Rule 100(b) of Regulation G.
7. We note your response to prior comment 15 regarding your non-GAAP
adjustment for
acquisition related non-recurring costs. You state in your response
that these costs do not
drive revenue and business growth and are not part of your normal
recurring operations.
However, given the frequency and number of acquisitions completed in
each period, and
the fact that you consider acquiring businesses and solutions to be
part of your key growth
strategy that supports customer and business growth and expanded
market share, it
appears acquisitions are a key part of your normal business operations
and strategy.
Further, while you state that each individual acquisition is a
distinct event, the volume of
these transactions in their totality (e.g. 13 in fiscal 2019, 9 in
fiscal 2020 and 3 to date in
Marc Thompson
EverCommerce Inc.
May 26, 2021
Page 3
fiscal 2021) cannot be ignored when considering the recurring nature of
such adjustment.
Accordingly, please revise to remove this adjustment. Refer to Item
10(e)(ii)(B) and
Question 100.01 of the Non-GAAP Compliance and Disclosure
Interpretations.
Comparison of the Years Ended December 31, 2020 and 2019 - Revenues, page 74
8. We note your response and revised disclosures to prior comment 18. Please
revise to
better address the specific reasons for this increase in your revenue,
including the amount
due to new or acquired customers versus the amount due to upsells to
existing customers,
as well as the amount due to other factors such as pricing changes. Also,
clarify for us
your reference to the amount of revenue contributed from acquisitions
consummated
during the period and how that supports the period-over-period increase
in revenue. In this
regard, you had numerous acquisitions throughout 2019 for which you
recognized a full
year of revenue during fiscal 2020, but it is unclear from your
disclosures how those
acquisitions impacted your revenue growth. Similarly, in your March 31
results discussion
you quantify the revenue from the 2021 acquisitions; however, it would
seem the six
acquisitions that occurred after the first quarter of 2020 also impacted
your March 31,
2021 revenue growth. Please revise your disclosures as necessary.
Notes to Consolidated Financial Statements
Note 4. Revenue, page F-27
9. We note your revised disclosures in response to prior comment 23. Please
further revise
to disclose, as you state in your response, that legal contracts with
termination rights are
considered to be one month contracts and are therefore excluded from your
remaining
performance obligation disclosures.
You may contact Brittany Ebbertt, Senior Staff Accountant, at (202)
551-3572
or Kathleen Collins, Accounting Branch Chief, at (202) 551-3499 if you have
questions
regarding comments on the financial statements and related matters. Please
contact Alexandra
Barone, Staff Attorney, at (202) 551-8816 or Jan Woo, Legal Branch Chief, at
(202) 551-3453
with any other questions.
Sincerely,
FirstName LastNameMarc Thompson
Division of
Corporation Finance
Comapany NameEverCommerce Inc.
Office of
Technology
May 26, 2021 Page 3
cc: Benjamin J. Cohen
FirstName LastName