EngageSmart, Inc. (NYSE:ESMT) Q4 2022 Earnings Call Transcript

Cassandra Hudson: Yes, I mean, I think, the difference in the contribution on the pricing and packaging will, will certainly impact the net revenue retention in a similar way to what we are seeing in ARPU expansion. So, I would certainly highlight that. And then we are expecting some slightly elevated churn this year, so maybe a small impact from that as well. But still expecting really strong net revenue retention, again, well north of a 100%, which is just really driven by our business model and the levers that we have across both segments to drive growth.

John Davis: Okay. And one quick last one here. Once again, in the fourth quarter you guys flow through the large majority of the revenue upside to EBITDA. Any reason why that should change in 2023? Should we see revenue upside? Do you feel like you have the investments that you want to make already baked in the guide and we could see kind of top line upside flow through to the bottom line? Or are there plans to maybe spend more if you do exceed the top line?

Cassandra Hudson: I think for the most part, to the extent that we see upside in revenue, we expect that to largely flow through at a consistent rate that we saw in 2022.

John Davis: Okay. Awesome. Thanks guys.

Cassandra Hudson: Thank you.

Operator: Thank you. There are no additional questions registered at this time. I’ll pass the conference to Bob Bennett for closing remarks.

Bob Bennett: Thank you. EngageSmart, delivered great results in our fourth quarter and for our full year of 2022. Momentum for both segments drove record revenue and adjusted EBITDA performance. Standouts are our strong customer growth, the increase in average revenue per customer, our successful pricing and packaging changes and exceptional customer retention. Our positioning continues to be compelling as we address our huge U.S. market opportunity with large TAM and SAM. Thank you all for joining us today. We are excited to speak with you again later this quarter at Raymond James 44th Annual Institutional Investors Conference in Orlando, the Wolfe Research March Madness software Conference in New York and Truist 2023 Technology, Internet & Services Conference also in New York. Thank you.

Operator: This concludes today’s call. Thank you for your participation. You may disconnect at any time.