Unless the context requires otherwise, references in this report to
"EverCommerce Inc.," the "Company," "we," "us" and "our" refer to EverCommerce
Inc. and its consolidated subsidiaries. The following discussion and analysis of
our financial condition and results of operations should be read in conjunction
with our consolidated financial statements and related notes appearing elsewhere
in this Annual Report on Form 10-K. Additionally, our historical results are not
necessarily indicative of the results that may be expected for any period in the
future. An analysis of our results of operations and cash flows for the year
ended December 31, 2019, including a discussion of the year ended December 31,
2020 as compared to the year ended December 31, 2019, has been reported
previously in our final prospectus dated June 30, 2021 pursuant to Rule
424(b)(4) (File No. 333-256641) of the Securities Act (the "Prospectus"), under
the heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

Overview

EverCommerce is a leading provider of integrated, vertically-tailored
software-as-a-service ("SaaS") solutions for service-based small- and
medium-sized businesses ("service SMBs"). Our platform spans across the full
lifecycle of interactions between consumers and service professionals with
vertical-specific applications. Today, we serve over 600,000 customers across
three core verticals: Home Services; Health Services; and Fitness & Wellness
Services. Within our core verticals, our customers operate within numerous
micro-verticals, ranging from home service professionals, such as home
improvement contractors and home maintenance technicians, to physician practices
and therapists within Health Services, to personal trainers and salon owners
within Fitness & Wellness. Our platform provides vertically-tailored SaaS
solutions that address service SMBs' increasingly specialized demands, as well
as highly complementary solutions that complete end-to-end offerings, allowing
service SMBs and EverCommerce to succeed in the market, and provide end
consumers more convenient service experiences.

We offer several vertically-tailored suites of solutions, each of which follows
a similar and repeatable go-to-market playbook: offer a "system of action"
Business Management Software that streamlines daily business workflows,
integrate highly complementary, value-add adjacent solutions and complete gaps
in the value chain to create end-to-end solutions. These solutions focus on
addressing how service SMBs market their services, streamline operations and
retain and engage their customers.

•Business Management Software: Our vertically-tailored Business Management
Software is the system of action at the center of a service business' operation,
and is typically the point-of-entry and first solution adopted by a customer.
Our software, designed to meet the day-to-day workflow needs of businesses in
specific vertical end markets, streamlines front and back-office processes and
provides polished customer-facing experiences. Using these offerings, service
SMBs can focus on growing their customers, improving their services and driving
more efficient operations.

•Billing & Payment Solutions: Our Billing & Payment Solutions provide integrated
payments, billing and invoicing automation and business intelligence and
analytics. Our omni-channel payments capabilities include point-of-sale ("POS"),
eCommerce, online bill payments, recurring billing, electronic invoicing and
mobile payments. Supported payment types include credit card, debit card and
Automated Clearing House ("ACH") processing. Our payments platform also provides
a full suite of service commerce features, including customer management as well
as cash flow reporting and analytics. These value-add features help small- and
medium-sized businesses ("SMBs") to ensure more timely billing and payments
collection and provide improved cash flow visibility.

•Customer Engagement Applications: Our Customer Engagement Applications
modernize how businesses engage and interact with customers by leveraging
innovative, bespoke customer listening and communication solutions to improve
the customer experience and increase retention. Our software provides customer
listening capabilities with real-time customer surveying and analysis to allow
standalone businesses and multi-location brands to receive voice of the customer
("VoC") insights and manage the customer experience lifecycle. These
applications include: customer health scoring, customer support systems,
real-time alerts,

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NPS-based customer feedback collection, review generation and automation, reputation management, customer satisfaction surveys, and a digital communications suite, among others. These tools help our customers gain actionable insights, increase customer loyalty, repeat purchases, and improve the customer experience.

•Marketing Technology Solutions: Our Marketing Technology Solutions work with
our Customer Engagement Applications to help customers build their businesses by
invigorating marketing operations and improving return on investment across the
customer lifecycle. These solutions help businesses to manage campaigns,
generate quality leads, increase conversion and repeat sales, improve customer
loyalty and provide a polished brand experience. Our solutions include: custom
website design, development and hosting, responsive web design, marketing
campaign design and management, search engine optimization ("SEO"), paid search
and display advertising, social media and blog automation, call tracking, review
monitoring and marketplace lead generation, among others.

We go to market with suites of solutions that are aligned to our three core
verticals: (i) the EverPro suite of solutions in Home Services; (ii) the
EverHealth suite of solutions within Health Services; and (iii) the EverWell
suite of solutions in Fitness & Wellness Services. Within each suite, our
Business Management Software - the system of action at the center of a service
business' operation - is typically the first solution adopted by a customer.
This vertically-tailored point-of-entry provides us with an opportunity to
cross-sell adjacent products, previously offered as fragmented and disjointed
point solutions by other software providers. This "land and expand" strategy
allows us to acquire customers with key foundational solutions and expand into
offerings via product development and acquisitions that cover all workflows and
power the full scope of our customers' businesses. This results in a
self-reinforcing flywheel effect, enabling us to drive value for our customers
and, in turn, improve customer stickiness, increase our market share and fuel
our growth.

We generate three types of revenue: (i) Subscription and Transaction Fees, which
are primarily recurring revenue streams, (ii) Marketing Technology Solutions,
which includes both recurring and re-occurring revenue streams and (iii) Other
revenue which consists primarily of one-time revenue streams. Our recurring
revenue generally consists of monthly, quarterly and annual software and
maintenance subscriptions, transaction revenue associated with integrated
payments and billing solutions and monthly contracts for Marketing Technology
Solutions. Additionally, our re-occurring revenue includes revenue related to
the sale of marketing campaigns and lead generation under contractual
arrangements with customers.

•Subscription and Transaction Fees revenue includes: (i) recurring monthly,
quarterly and annual SaaS subscriptions and software license and maintenance
fees from the sale of our Business Management, Customer Engagement and Billing
and Payment solutions; (ii) payment processing fees based on the transaction
volumes processed through our integrated payment solutions and processing fees
based on transaction volumes for our revenue cycle management, chronic care
management and health insurance clearinghouse solutions; and (iii) membership
subscriptions and our share of rebates from suppliers generated though group
purchasing programs.

•Marketing Technology Solutions revenues include: (i) recurring revenues for managing digital advertising programs on behalf of our clients, including website hosting, search engine management and optimization, social media management and blog automation; and (ii) recurring fees paid by service professionals for leads generated by our various platforms.

•Other revenue includes: (i) consulting, implementation, training and other
professional services; (ii) website development; (iii) revenue from various
business development partnerships; (iv) event income; and (v) hardware sales
related to our business management or payment software solutions.

Our business benefits from attractive unit economics. Approximately 95% of our
revenue in the years ended December 31, 2021 and 2020 was recurring or
re-occurring, and we maintained a stable average monthly net pro forma revenue
retention rate of 99% or more in each of the last 8 -quarters. We believe the
retention and growth of revenue from our existing customers is a helpful measure
of the health of our business and our future growth

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prospects. Our ability to cross sell additional products and services to our
existing customers can increase customer engagement with our suite of solutions
and thus have a positive impact on our net pro forma revenue retention rate. For
example, we have leveraged our land and expand strategy to cross sell solutions
to our existing customers, which has supported our high net pro forma revenue
retention rate by increasing customer utilization of our solutions, educating
customers as to how our platform and synergies can support their businesses and,
in turn, improving customer stickiness.

Our calculation of net pro forma revenue retention rate remains consistent with
prior periods. This rate for any fiscal period includes the positive recurring
and re-occurring revenue impacts of selling new solutions to existing customers
and the negative impacts of contraction and attrition among this set of
customers. Our net pro forma revenue retention rate may fluctuate as a result of
a number of factors, including the growing level of our revenue base, the level
of penetration within our customer base, expansion of solutions, new
acquisitions and our ability to retain our customers. Our calculation of net pro
forma revenue retention rate may differ from similarly titled metrics presented
by other companies.

We acquire companies to deepen our competitive moats in existing verticals, and
enter new verticals and geographies. We have acquired 52 companies since our
inception, including five in 2021 and nine in 2020. We have an established
framework for identification, execution, integration and onboarding of targets,
which leverages our significant acquisition experience and utilizes internal
criteria for evaluating acquisition candidates and prospective businesses. We
have developed and refined our internal criteria over time with our
acquisitions, which has helped us to more readily identify attractive and
complementary targets that can be efficiently onboarded. These acquired
solutions can bring deep industry expertise and vertically-tailored software
solutions that provide additional sources of growth. We believe that our
methodology, track record and reputation for sourcing, evaluating and
integrating acquisitions positions us as an "acquirer-of-choice" for potential
targets.

Initial Public Offering

On July 6, 2021, we completed our Initial Public Offering ("IPO") which resulted
in the issuance and sale of 19,117,648 shares of common stock at the IPO price
of $17.00 generating net proceeds of $303.9 million after deducting underwriting
discounts. Additionally, we incurred other IPO related fees of $6.9 million. On
July 29, 2021, the underwriters of our IPO fully exercised their over-allotment
option, resulting in the sale of an additional 2.8 million shares at the IPO
price of $17.00 per share and after underwriter discounts, net proceeds were
$43.9 million.

Private Placement

On July 6, 2021 we sold 4,411,764 shares of our common stock to entities
affiliated with Silver Lake in a private placement (the "Private Placement") at
a purchase price equal to the IPO price of $17.00 per share of common stock for
net proceeds of $75.0 million.

Impact of COVID-19

The COVID-19 pandemic has caused economies, businesses, markets and communities
around the globe to be disrupted, and in many cases, shut-down. In the interest
of public health, many governments closed physical stores and business locations
deemed to be non-essential, which caused increased unemployment levels and
businesses to permanently close. Many SMBs have been adversely impacted by the
COVID-19 pandemic, and as a result, certain of our business operations were
negatively impacted, while others have benefited from customers shifting to
technology-focused, digital-first business models. A McKinsey survey from
October 2020 revealed that global business executives have accelerated the
digitization of their customer and supply-chain interactions by as much as three
to four years. Although we cannot predict when the United States and global
economy will fully recover from the COVID-19 pandemic, we believe that our
business is well positioned to be a partner-of-choice for new customers, to
capitalize on the growing trend of digital transformation and to benefit from
the revival of the SMB economy. Nevertheless, we do not have certainty that a
full economic recovery will happen in the near future, and it is possible that
the prolonging of the COVID-19 pandemic will adversely affect our business,
financial condition

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and results of operations. For more information regarding the potential impact
of the COVID-19 pandemic on our business, refer to Part II. Item 1A. "Risk
Factors-Risks Related to our Business-The outbreak of the novel strain of
coronavirus disease has impacted, and a future pandemic, epidemic or outbreak of
an infectious disease in the United States could impact, our business, financial
condition and results of operations, as well as the business or operations of
third parties with whom we conduct business."

Impact on financial performance

The COVID-19 pandemic negatively impacted our financial performance in the
second quarter of 2020, and to a lesser degree thru the remainder of 2020 and
2021, due to the adverse impact the pandemic had on certain service SMBs.
However, given the diversification of our business, the financial impact was
primarily limited to declines in revenue attributable to customers in the
Fitness & Wellness and Health Services verticals as many customers in those
verticals were forced to close their business or limit operations. Due to the
pandemic, in the three months ended June 30, 2020, our revenue declined from the
three months ended March 31, 2020, excluding the impact of acquisitions closed
in the first and second quarters of 2020. Throughout the second half of 2020 and
for the year ended 2021, our revenues, excluding the impact of acquisitions
closed within the respective periods, have increased as our customers and many
service SMBs resumed operations and the impact of the pandemic has lessened.

Given that the COVID-19 pandemic continues to evolve, the extent to which it may
further impact our financial condition, results of operations, or liquidity
continues to be uncertain and difficult to predict. Any further impact is likely
to vary by specific verticals, solutions and geographies, with the diversity of
our customer base potentially moderating the overall effect. Our priority
remains the safety of our employees, customers and the communities in which we
live and operate. We continue to remain in close and regular contact with our
employees, customers, business partners and communities to help navigate these
challenging times.

Key factors affecting our performance

We believe that our performance and future success depends on a number of factors which present significant opportunities for us, but which also present risks and challenges.

Expansion into new products and vertical markets

Given our position in the service SMB ecosystem, as well as our relationships
and level of engagement with our customers, we use insights gained through our
customer relationships and lifecycle to identify additional solutions that are
value-additive for our customers. These insights allow us to continually assess
opportunities to develop or acquire solutions to further grow our business by
expanding market share, cross-selling solutions and enhancing customer
stickiness to improve customer retention. Additionally, we have completed
acquisitions to enter new micro-verticals and geographies.

Pursue acquisitions to expand our reach

We acquire companies to accelerate our position as a market leader, fill gaps
within our vertically tailored solutions, deepen our competitive moats in
existing verticals and enter new verticals and geographies. We have acquired 52
companies since our inception, including five in 2021 and nine in 2020. We have
an established framework for identification, execution, integration and
onboarding of targets, which leverages our significant acquisition experience
and utilizes internal criteria for evaluating acquisition candidates and
prospective businesses. We have developed and refined our internal criteria over
time with our acquisitions, which has helped us to more readily identify
attractive and complementary targets that can be efficiently onboarded. These
acquired solutions can bring deep industry expertise and vertically-tailored
software solutions that provide additional sources of growth. We believe that
our methodology, track record and reputation for sourcing, evaluating and
integrating acquisitions positions us as an "acquirer-of-choice" for potential
targets.

Although we expect to continue to acquire companies and other assets in the
future, such acquisitions pose a number of challenges and risks. For additional
information, see Part I. Item 1A. "Risk Factors-Risks Related to Our
Business-Our recent growth rates may not be sustainable or indicative of future
growth and we expect our growth

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rate to slow," "-We may reduce our rate of acquisitions and may be unsuccessful
in achieving continued growth through acquisitions" and "-Revenues and profits
generated through acquisitions may be less than anticipated, and we may fail to
uncover all liabilities of acquisition targets through the due diligence process
prior to an acquisition, resulting in unanticipated costs, losses or a decline
in profits, as well as potential impairment charges. Claims against us relating
to any acquisition may necessitate our seeking claims against the seller for
which the seller may not indemnify us or that may exceed the seller's
indemnification obligations."

Acquire new customers

Sustaining our growth requires continued adoption of our solutions by new
customers. Through acquisitions and organic growth of our business, the number
of customers on our platform increased from over 500,000 at the end of 2020 to
over 600,000 at the end of 2021. We will continue to invest in our efficient
go-to-market strategy as we further penetrate our addressable markets. Our
financial performance will depend in large part on the overall demand for our
solutions from service SMBs.

Increase revenue from existing customers

As of December 31, 2021, we had over 600,000 customers worldwide, including
approximately 294,000, 90,000 and 67,000 customers in our Home Services, Health
Services and Fitness & Wellness Services verticals, respectively. For the year
ended December 31, 2021, we estimate that approximately 98% of our customers had
less than $2,000 in billings and less than 1% had more than $5,000 in billings.

We define a customer as an individual or entity that utilized or was capable of
utilizing an EverCommerce solution or service for which they paid any one or
combination of recurring, re-occurring, or transactional fees in a given period.
For solutions contracting with entities that service groups of customers, for
example franchises or other multi-location businesses, the customer is counted
at the level of the individual business utilizing the solution.

We believe we have the opportunity to drive incremental revenue growth from our
existing customer base through increased cross-selling of our integrated
solutions, including digital payments, customer engagement and marketing
technology. We earn transaction fees for payment transactions initiated on our
platform, and our revenue and payment volumes grow as customers process more
transactions on our platform. Integrating our payments platform across our
EverPro, EverWell and EverHealth suites of solutions can improve customer
retention and satisfaction as it drives operating efficiencies for quicker and
more efficient billing and payment collection. We generate subscription and
marketing technology revenue from cross-selling our customer engagement and
Marketing Technology Solutions across our customer base. These solutions both
increase customer loyalty and repeat purchases, and improve customer
experiences, as well as help businesses to manage campaigns and generate quality
leads.

Continuous investment growing

We continue to drive awareness and generate demand for our solutions in order to
acquire new customers and develop new service SMB relationships, as we believe
that we still have a significant market opportunity ahead of us. We will
continue to expand efforts to market our solutions directly to SMBs through
online digital marketing, raising brand awareness at conferences and events, and
other marketing channels. We believe this investment, coupled with our
attractive unit economics, will enable us to grow our customer base and continue
our strategy of profitable growth.

We intend to increase our investment in our solutions to maintain our position
as a leading provider of integrated SaaS solutions for service SMBs. To drive
adoption and increase penetration within our base, we will continue to introduce
new features and upgrade our technology solutions. We believe that investment in
technology development will contribute to our long-term growth, but may also
negatively impact our short-term profitability.

As a result, we expect our operating expenses related to sales and marketing and
product development to increase as a percentage of total revenue over the near
term.

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Additionally, while we continued to invest in scalable operations and necessary
functions to support operating as a public company in 2021, a greater impact of
these investments, particularly related to Sarbanes-Oxley compliance, will be
realized in 2022 and beyond.

Main commercial and financial parameters

In addition to our results and measures of performance determined in accordance
with Generally Accepted Accounting Principles ("GAAP"), we believe the following
key business and non-GAAP financial measures are useful in evaluating and
comparing our financial and operational performance over multiple periods,
identifying trends affecting our business, formulating business plans and making
strategic decisions.

Pro forma revenue growth rate

Pro Forma Revenue Growth Rate is a key performance measure that our management
uses to assess our consolidated operating performance over time. Management also
uses this metric for planning and forecasting purposes.

Our year-over-year Pro Forma Revenue Growth Rate is calculated as though all
acquisitions closed as of the end of the latest period were closed as of the
first day of the prior year period presented. In calculating Pro Forma Revenue
Growth Rate, we add the revenue from acquisitions for the reporting periods
prior to the date of acquisition (including estimated purchase accounting
adjustments) to our results of operations, and then calculate our revenue growth
rate between the two reported periods. As a result, Pro Forma Revenue Growth
Rate includes pro forma revenue from businesses acquired during the period,
including revenue generated during periods when we did not yet own the acquired
businesses. In including such pre-acquisition revenue, Pro Forma Revenue Growth
Rate allows us to measure the underlying revenue growth of our business as it
stands as of the end of the respective period, which we believe provides insight
into our then-current operations. Pro Forma Revenue Growth Rate does not
represent organic revenue generated by our business as it stood at the beginning
of the respective period. Pro Forma Revenue Growth Rates are not necessarily
indicative of either future results of operations or actual results that might
have been achieved had the acquisitions been consummated on the first day of the
prior year period presented. We believe that this metric is useful to investors
in analyzing our financial and operational performance period over period and
evaluating the growth of our business, normalizing for the impact of
acquisitions. This metric is particularly useful to management due to the number
of acquired entities.

As the economy has continued to reopen and additional local, state and federal
restrictions have been scaled back, our Pro Forma Revenue Growth Rate increased
to 21.5% for the year ended December 31, 2021.

Non-GAAP Financial Measures

Adjusted gross profit

Adjusted Gross Profit is a key performance measure that our management uses to
assess our operational performance, as it represents the results of revenues and
direct costs, which are key components of our operations. We believe that this
non-GAAP financial measure is useful to investors and other interested parties
in analyzing our financial performance because it reflects the gross
profitability of our operations, and excludes the indirect costs associated with
our sales and marketing, product development, general and administrative
activities, depreciation and amortization and the impact of our financing
methods and income taxes.

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We calculate Adjusted Gross Profit as gross profit (as defined below) adjusted
to exclude depreciation and amortization allocated to cost of revenues. Adjusted
Gross Profit should be viewed as a measure of operating performance that is a
supplement to, and not a substitute for, operating income or loss, net earnings
or loss and other GAAP measures of income (loss) or profitability. The following
table presents a reconciliation of gross profit, the most directly comparable
financial measure calculated in accordance with GAAP, to Adjusted Gross Profit
on a consolidated basis.

                                        Year ended December 31,
                                         2021                  2020
                                                (in thousands)

Gross profit(1)                  $     308,301        (2)   $ 207,691   (3)
Depreciation and amortization           19,608                 14,814
Adjusted gross profit            $     327,909              $ 222,505



(1)Gross profit is calculated as total revenues less cost of revenues (exclusive
of depreciation and amortization), amortization of developed technology,
amortization of capitalized software and depreciation expense (allocated to cost
of revenues).
(2)For the year ended December 31, 2021, gross profit represents total revenues
of $490.1 million less cost of revenues (exclusive of depreciation and
amortization) of $162.2 million, amortization of developed technology of $14.7
million, amortization of capitalized software of $3.7 million and depreciation
expense (allocated to cost of revenues) of $1.2 million.
(3)For the year ended December 31, 2020, gross profit represents total revenues
of $337.5 million less cost of revenues (exclusive of depreciation and
amortization) of $115.0 million, amortization of developed technology of $10.7
million, amortization of capitalized software of $2.4 million and depreciation
expense (allocated to cost of revenues) of $1.7 million.

Adjusted EBITDA

Adjusted EBITDA is a key performance measure that our management uses to assess
our financial performance and is also used for internal planning and forecasting
purposes. We believe that this non-GAAP financial measure is useful to investors
and other interested parties in analyzing our financial performance because it
provides a comparable overview of our operations across historical periods. In
addition, we believe that providing Adjusted EBITDA, together with a
reconciliation of net income (loss) to Adjusted EBITDA, helps investors make
comparisons between our company and other companies that may have different
capital structures, different tax rates and/or different forms of employee
compensation.

Adjusted EBITDA is used by our management team as an additional measure of our
performance for purposes of business decision-making, including managing
expenditures, and evaluating potential acquisitions. Period-to-period
comparisons of Adjusted EBITDA help our management identify additional trends in
our financial results that may not be shown solely by period-to-period
comparisons of net income or income from continuing operations. In addition, we
may use Adjusted EBITDA in the incentive compensation programs applicable to
some of our employees. Our Management recognizes that Adjusted EBITDA has
inherent limitations because of the excluded items, and may not be directly
comparable to similarly titled metrics used by other companies.

We calculate Adjusted EBITDA as net income (loss) adjusted to exclude interest
and other expense, net, income tax benefit, loss on debt extinguishment,
depreciation and amortization, other amortization, acquisition related costs,
stock-based compensation and other non-recurring costs. Other amortization
includes amortization for capitalized contract acquisition costs. Acquisition
related costs are specific deal-related costs such as legal fees, financial and
tax due diligence, consulting and escrow fees. Other non-recurring costs are
expenses such as system implementation costs and severance related to planned
restructuring activities. Acquisition related costs and other non-recurring
costs are excluded as they are not representative of our underlying operating
performance. Adjusted

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EBITDA should be viewed as a measure of operating performance that is a
supplement to, and not a substitute for, operating income or loss, net earnings
or loss and other GAAP measures of income (loss). The following table presents a
reconciliation of net loss, the most directly comparable financial measure
calculated in accordance with GAAP, to Adjusted EBITDA on a consolidated basis.

                                             Year ended December 31,
                                               2021               2020
                                                 (in thousands)

Net loss                               $     (81,966)          $ (59,954)
Adjusted to exclude the following:
Interest and other expense, net               36,111              41,545
Income tax benefit                           (10,051)             (3,630)
Loss on debt extinguishment                   28,714                   -
Depreciation and amortization                101,437              76,844
Other amortization                             2,814               1,801
Acquisition related costs                      3,452               9,558
Stock-based compensation                      22,095              10,721
Other non-recurring costs                      4,592               1,905
Adjusted EBITDA                        $     107,198           $  78,790


Description of certain components of financial data

Revenue

We derive our revenue from three primary sources which are described in detail
below: (i) Subscription and Transaction Fees, which are primarily recurring
revenue streams, (ii) Marketing Technology Solutions, which includes both
recurring and re-occurring revenue streams and (iii) Other revenue, which
consists primarily of the sale of distinct professional services and hardware.
Our revenue recognition policies are discussed in more detail under "Critical
Accounting Policies and Significant Judgments and Estimates."

Subscription and Transaction Fees: Revenue includes (i) recurring monthly,
quarterly and annual SaaS subscriptions and software license and maintenance
fees from the sale of our Business Management, Customer Engagement and Billing
and Payment solutions; (ii) payment processing fees based on the transaction
volumes processed through our integrated payment solutions and processing fees
based on transaction volumes for our revenue cycle management, chronic care
management and health insurance clearinghouse solutions; and (iii) membership
subscriptions and our share of rebates from suppliers generated though group
purchasing programs. Our revenue from payment processing fees is recorded net of
credit card and ACH processing and interchange charges in the month the services
are performed.

Marketing Technology Solutions: Revenue includes (i) recurring revenue from managing digital advertising programs on behalf of our clients, including website hosting, search engine management and optimization, social media and blogging automation; and (ii) recurring fees paid by service professionals for leads generated by our various platforms.

Other: Revenue includes (i) consulting, implementation, training and other professional services; (ii) website development; (iii) income from various business development partnerships; (iv) event revenue; and (v) hardware sales related to our business management or payment software solutions.

Revenue cost

The cost of revenues (excluding depreciation and amortization) includes expenses related to the provision of our services

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and products and providing support to our customers and includes employee costs
and related overhead, customer credit card processing fees, targeted mail costs,
third party fulfillment costs and software hosting expenses.

We expect that cost of revenue as a percentage of revenue will fluctuate from
period to period based on a variety of factors, including the mix of revenue
between subscription and transaction fees and Marketing Technology Solutions,
labor costs, third-party expenses and acquisitions. In particular, Marketing
Technology Solutions revenue generally has a higher cost of revenue as a
percentage of revenue than our subscription and transaction fee revenue. For the
year ended December 31, 2021, revenue from subscription and transaction fees
increased 51% compared to the year ended December 31, 2020, whereas Marketing
Technology Solutions revenue increased 37%. To the extent our Marketing
Technology Solutions revenue grows at a faster rate, whether by acquisition or
otherwise, than our subscription and transaction fees revenue, it could
negatively impact our cost of revenues as a percentage of revenue.

Sales and Marketing

Sales and marketing expense consist primarily of employee costs for our sales
and marketing personnel, including salaries, benefits, bonuses, stock-based
compensation and sales commissions. Sales and marketing expenses also include
advertising costs, travel-related expenses and costs to market and promote our
products, direct customer acquisition costs, costs related to conferences and
events and partner/broker commissions. Software and subscription services
dedicated for use by our sales and marketing organization, and outside services
contracted for sales and marketing purposes are also included in sales and
marketing expense. Sales commissions that are incremental to obtaining a
customer contract are deferred and amortized ratably over the estimated period
of our relationship with that customer. We expect our sales and marketing
expenses will increase on an absolute dollar basis for the foreseeable future as
we continue to increase investments to support our growth. We also anticipate
that sales and marketing expenses will increase as a percentage of revenue in
the near and medium-term.

Product Development

Product development expense consists primarily of employee costs for our product
development personnel, including salaries, benefits, stock-based compensation
and bonuses. Product development expenses also include third-party outsourced
technology costs incurred in developing our platforms, and computer equipment,
software and subscription services dedicated for use by our product development
organization. We expect our product development expenses to increase in absolute
dollars and remain generally consistent as a percentage of revenue for the
foreseeable future as we continue to dedicate substantial resources to develop,
improve and expand the functionality of our solutions.

General and administrative

General and administrative expense consists of employee costs for our executive
leadership, accounting, finance, legal, human resources and other administrative
personnel, including salaries, benefits, bonuses and stock-based compensation.
General and administrative expenses also include external legal, accounting and
other professional services fees, rent, software and subscription services
dedicated for use by our general and administrative employees and other general
corporate expenses. We expect general and administrative expense to increase on
an absolute dollar basis for the foreseeable future as we continue to increase
investments to support our growth and due to increased costs as a result of
being a public company. As we are able to further scale our operations in the
future, we would expect that general and administrative expenses would decrease
as a percentage of revenue.

Depreciation and amortization

Depreciation allowances mainly relate to intangible fixed assets, tangible fixed assets and capitalized software.

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Interest and other charges, net

Interest and other expense, net, primarily includes interest expense on long-term debt, net of interest income. It also includes the amortization expense of financing costs and discounts, as well as realized and unrealized gains and losses.

Loss on extinguishment of debt

The loss on extinguishment of debt represents the difference between the amount paid to extinguish the debt and the book value of the debt, including the write-off of previously deferred financing costs.

Tax benefit

We account for income taxes in accordance with ASC 740, Income Taxes. ASC 740
requires deferred tax assets and liabilities to be recognized for temporary
differences between the tax basis and financial reporting basis of assets and
liabilities, computed at the expected tax rates for the periods in which the
assets or liabilities will be realized, as well as for the expected tax benefit
of net operating loss and tax credit carryforwards. Income taxes are recognized
for the amount of taxes payable by the Company's corporate subsidiaries for the
current year and for the impact of deferred tax assets and liabilities, which
represent future tax consequences of events that have been recognized
differently in the financial statements than for tax purposes.


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Operating results

The following tables summarize key components of our results of operations for
the periods presented. The period-to-period comparisons of our historical
results are not necessarily indicative of the results that may be expected in
the future. We operate as a single reportable segment to reflect the way our
chief operating decision maker ("CODM") reviews and assesses the performance of
our business. For additional information concerning our accounting policies, see
Note 2 in the notes to the consolidated financial statements included in this
Annual Report on Form 10-K.

Impact of Acquisitions

The comparability of our operating results is impacted by our business
combinations and acquisitions. In our discussion of changes in our results of
operations for the year ended December 31, 2021 compared to the year ended
December 31, 2020, we quantitatively disclose the impact of the growth in
certain of our revenues where such discussions would be meaningful. Expense
contributions from our recent acquisitions for each of the respective period
comparisons generally were not separately identifiable due to the integration of
these businesses into our existing operations, and as such the discussion is
focused on major changes in components of costs.

Comparison of years ended December 31, 2021 and 2020

Year ended the 31st of December,

                                                                         2021                    2020
                                                                              (in thousands)

Revenues:
Subscription and transaction fees                                $     351,831              $   232,931
Marketing technology solutions                                         118,275                   86,331
Other                                                                   20,033                   18,263
Total revenues                                                         490,139                  337,525

Operating expenses: Cost of sales(1) (excluding depreciation presented separately below)

162,230                  115,020
Sales and marketing(1)                                                  93,789                   50,246
Product development(1)                                                  49,506                   30,386
General and administrative(1)                                          110,369                   87,068
Depreciation and amortization                                          101,437                   76,844
Total operating expenses                                               517,331                  359,564
Operating loss                                                         (27,192)                 (22,039)
Interest and other expense, net                                        (36,111)                 (41,545)
Loss on debt extinguishment                                            (28,714)                       -
Net loss before income tax benefit                                     (92,017)                 (63,584)
Income tax benefit                                                      10,051                    3,630
Net loss                                                         $     (81,966)             $   (59,954)


                                     II-13
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(1)Includes stock-based compensation expense as follows:

                                                 Year ended December 31,
                                                    2021                2020
                                                      (in thousands)

Cost of revenues                           $          39             $      -
Sales and marketing                                  506                    -
Product development                                  551                    -
General and administrative                        20,999               10,721
Total stock-based compensation expense     $      22,095             $ 10,721



Revenues

                                          Year ended December 31,                   Change
                                            2021               2020          Amount           %
                                                        (dollars in thousands)

Revenues:
Subscription and transaction fees   $     351,831           $ 232,931      $ 118,900        51.0  %
Marketing technology solutions            118,275              86,331         31,944        37.0  %
Other                                      20,033              18,263          1,770         9.7  %
Total revenues                      $     490,139           $ 337,525      $ 152,614        45.2  %



Revenues increased $152.6 million or 45.2% for the year ended December 31, 2021
as compared to the year ended December 31, 2020. This increase was primarily
driven by increases in subscription and transaction fees of $118.9 million and
marketing technology solutions of $31.9 million. The increase in subscription
and transaction fees related to growth in our customer base, higher transaction
volumes processed through our payments platform and revenue earned from
acquisitions completed in 2021 and 2020. The increase in marketing technology
solutions related to growth in customers using our digital marketing
applications, an increase in consumer leads generated by our platforms and
revenue earned from acquisitions completed in 2021 and 2020. Included in
revenues for the year ended December 31, 2021 is $21.6 million of revenue from
acquisitions closed subsequent to December 31, 2020.

Cost of Revenues

                                                Year ended December 31,                          Change
                                                2021                 2020              Amount                %
                                                                     (dollars in thousands)

Cost of revenues (exclusive of
depreciation and amortization presented
separately below)                          $    162,230          $ 115,020          $  47,210                 41.0  %
Percentage of revenues                             33.1  %            34.1  %



Cost of revenues increased by $47.2 million or 41.0% for the year ended
December 31, 2021 as compared to the year ended December 31, 2020 . This
increase is primarily related to the continued growth of the Company and is
comprised of $15.4 million in personnel and compensation expense, $8.9 million
in outsourced services, $16.0 million in product cost and other miscellaneous
items including, but not limited to, promotional expense, software hosting
expense, customer credit card processing costs and campaign mail expense. As a
percentage of revenue, cost of revenues was 33.1% and 34.1% for the years ended
December 31, 2021 and 2020, respectively.

                                     II-14
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Sales and Marketing

                               Year ended December 31,                  Change
                              2021                  2020          Amount          %
                                             (dollars in thousands)

Sales and marketing      $    93,789             $ 50,246       $ 43,543        86.7  %
Percentage of revenues          19.1   %             14.9  %



Sales and marketing expenses increased by $43.5 million or 86.7% for the year
ended December 31, 2021 as compared to the year ended December 31, 2020. This
increase was primarily driven by an additional $18.7 million in personnel and
compensation expense, $10.6 million in advertising spend and $8.1 million in
partner commissions, due to the continued investment in growth through various
marketing channels and personnel in 2021 as well as the reduced spend during
COVID affected periods in 2020. As a percentage of revenue, sales and marketing
was 19.1% and 14.9% for the years ended December 31, 2021 and 2020,
respectively.

Product Development

                               Year ended December 31,                  Change
                              2021                  2020          Amount          %
                                             (dollars in thousands)

Product development      $    49,506             $ 30,386       $ 19,120        62.9  %
Percentage of revenues          10.1   %              9.0  %



Product development expenses increased by $19.1 million or 62.9% for the year
ended December 31, 2021 as compared to the year ended December 31, 2020. This
increase was primarily driven by additional product development related
personnel expenses of $16.2 million, as a result of investments in our
technology teams to support our various solutions as well as centralized
security operations, information technology and cloud engineering. As a
percentage of revenue, product development expenses were 10.1% and 9.0% for the
years ended December 31, 2021 and 2020, respectively.

General and Administrative

                                  Year ended December 31,                Change
                                    2021             2020          Amount          %
                                                (dollars in thousands)

General and administrative    $    110,369        $ 87,068       $ 23,301        26.8  %
Percentage of revenues                22.5   %        25.8  %



General and administrative expenses increased by $23.3 million or 26.8% for the
year ended December 31, 2021 as compared to the year ended December 31, 2020.
This increase was primarily driven by additional stock-based compensation
expense of $10.3 million due to the vesting of certain restricted stock awards,
and personnel and compensation expense of $3.1 million, software and tools
expense of $2.6 million and insurance expense of $2.4 million due to the
continued investment in infrastructure required to support our rapid growth,
scalable operations and being a public company. Additionally, this investment
was reduced during COVID affected periods in 2020. For further details regarding
our stock-based compensation expense related to the vesting of certain
restricted stock awards refer to Note 11 in the notes to the consolidated
financial statements included in this Annual Report on Form 10-K. As a
percentage of revenue, general and administrative expenses were 22.5% and 25.8%
for the years ended December 31, 2021 and 2020, respectively.

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Depreciation and amortization

                                    Year ended December 31,                Change
                                      2021             2020          Amount          %
                                                  (dollars in thousands)

Depreciation and amortization $101,437 $76,844 $24,593

       32.0  %
Percentage of revenues                  20.7   %        22.8  %



Depreciation and amortization increased by $24.6 million or 32.0% for the year
ended December 31, 2021 as compared to the year ended December 31, 2020. This
increase was primarily driven by an increase of $23.1 million in intangible
assets' amortization as a result of intangible asset additions from our 2021 and
2020 acquisitions. As a percentage of revenue, depreciation and amortization
expenses were 20.7% and 22.8% for the years ended December 31, 2021 and 2020,
respectively.

Interest and other charges, net

                                        Year ended December 31,                  Change
                                       2021                  2020          Amount          %
                                                      (dollars in thousands)

Interest and other expense, net   $    36,111             $ 41,545       $ (5,434)      (13.1) %
Percentage of revenues                    7.4   %             12.3  %



Interest and other expense, net, decreased by $5.4 million or 13.1% for the year
ended December 31, 2021 as compared to the year ended December 31, 2020. This
decrease was primarily due to an overall lower outstanding debt balance in 2021
compared to 2020, as well as a lower effective interest rate as a result of the
Refinance (as defined below). For additional information concerning the
Refinance, see the "New Credit Facilities section" below. As a percentage of
revenue, interest and other expense, net were 7.4% and 12.3% for the years ended
December 31, 2021 and 2020, respectively.

Loss on Debt Extinguishment

                                       Year ended December 31,                    Change
                                      2021                        2020       Amount        %
                                                   (dollars in thousands)

Loss on debt extinguishment   $         28,714                   $  -      $ 28,714        N.M.
Percentage of revenues                     5.9   %                 N.M.


_______________

N.M. - Not Meaningful.

Loss on debt extinguishment increased by $28.7 million for the year ended
December 31, 2021 as compared to the year ended December 31, 2020. As a result
of the Refinance in the third quarter of 2021, the Company recorded a loss on
debt extinguishment of approximately $28.7 million. For additional information
concerning our loss on debt extinguishment, see Note 9 in the notes to the
consolidated financial statements included in this Annual Report on Form 10-K.

                                     II-16
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Income Tax Benefit

                               Year ended December 31,                   Change
                               2021                   2020        Amount          %
                                             (dollars in thousands)

Income tax benefit       $     10,051              $ 3,630       $ 6,421       176.9  %
Percentage of revenues            2.1   %              1.1  %



Income tax benefit increased by $6.4 million or 176.9% for the year ended
December 31, 2021 as compared to the year ended December 31, 2020. This increase
was primarily driven by acquisition accounting, differences between the U.S.
Federal income tax rate and the income tax rate in certain foreign jurisdictions
and various other discrete items recorded in the year ended December 31, 2021.

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Cash and capital resources

To date, our primary sources of liquidity have been net cash provided by
operating activities, proceeds from preferred stock and common stock issuances,
including our recent IPO and proceeds from long-term debt. For a description of
our recent IPO and Private Placement, see above in this Part II, Item 7. under
"Initial Public Offering" and "Private Placement," respectively.

Our primary use of liquidity has been acquisitions of businesses. For a
description of our recent acquisitions, see Note 3 in the notes to the
consolidated financial statements included in this Annual Report on Form 10-K.
Absent significant deterioration of market conditions, we expect that working
capital requirements, capital expenditures, acquisitions, debt servicing and
lease obligations will be our principal needs for liquidity going forward.
During the year ended December 31, 2021, we completed five acquisitions for
total consideration of $367.1 million. During the year ended December 31, 2020,
we completed nine acquisitions for total consideration of $415.3 million.

As of December 31, 2021, we had cash, cash equivalents and restricted cash of
$97.6 million, $190.0 million of available borrowing capacity under our New
Revolver (as defined below) and $548.6 million outstanding under our New Credit
Facilities (as defined below). We believe that our existing cash, cash
equivalents and restricted cash, availability under our New Credit Facilities
and our cash flows from operations will be sufficient to fund our working
capital requirements and planned capital expenditures, and to service our debt
obligations for at least the next twelve months. However, our future working
capital requirements will depend on many factors, including our rate of revenue
growth, the timing and size of future acquisitions and the timing of
introductions of new products and services. We expect to consummate acquisitions
of complementary businesses in the future that could require us to seek
additional equity or debt financing. Additional funds may not be available on
terms favorable to us, or at all. If we are unable to raise additional funds
when desired, our business, financial condition and results of operations could
be adversely affected. See Part I, Item 1A."Risk Factors."

Cash flow

The following table presents the cash flow data:

                                                                         Year ended December 31,
                                                                        2021                  2020
                                                                              (in thousands)

Net cash provided by operating activities                         $      37,482          $     57,539
Net cash used in investing activities                                  (379,668)             (418,308)
Net cash provided by financing activities                               341,183               401,850
Effect of foreign currency exchange rate changes on cash                    224                   (87)
Net increase (decrease) in cash, cash equivalents and restricted
cash                                                              $        (779)         $     40,994


Cash flow from operating activities

During the year ended December 31, 2021, net cash provided by operating
activities consisted of net loss of $82.0 million, adjusted by net non-cash
adjustments to net loss of $147.8 million and net changes in operating assets
and liabilities of $28.4 million. Non-cash adjustments primarily consisted of
depreciation and amortization of $101.4 million, loss on debt extinguishment of
$28.7 million and stock-based compensation of $22.1 million offset partially by
deferred taxes of $12.0 million. Changes in working capital during the year
ended December 31, 2021 primarily included cash outflows from accounts
receivable, net of $13.3 million, other non-current assets of $10.5 million,
prepaid expenses and other current assets of $8.0 million and accrued expenses
and other of $4.1 million, partially offset by cash inflows of $9.2 million from
deferred revenue.

During the year ended December 31, 2020net cash provided by operating activities consisted of the net loss of $60.0 millionadjusted by net non-cash adjustments to net income of $91.4 million and net changes in operating assets and

                                     II-18
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liabilities of $26.1 million. Non-cash adjustments primarily consisted of
depreciation and amortization of $76.8 million and stock-based compensation of
$10.7 million. Changes in working capital during the year ended December 31,
2020 primarily included net cash inflows from accrued expenses and other of
$13.2 million, customer deposits and other long-term liabilities of $9.0 million
and prepaid expenses and other current assets of $5.0 million, partially offset
by cash outflows for other non-current assets of $4.2 million.

Cash flow from investing activities

During the year ended December 31, 2021, net cash used in investing activities
was $379.7 million. The cash flow used was driven primarily by acquisition of
companies, net of cash acquired, of $364.9 million. The remainder was primarily
for purchases of property and equipment and cost to develop software.

During the year ended December 31, 2020, net cash used in investing activities
was $418.3 million. The cash flow used was driven primarily by acquisition of
companies, net of cash acquired, of $403.2 million. The remainder was primarily
for purchases of property and equipment and cost to develop software.

Cash flow from financing activities

During the year ended December 31, 2021, net cash provided by financing
activities was $341.2 million. The cash flow provided was driven primarily by
net proceeds from preferred and common stock issuances of $109.8 million and
$415.7 million, respectively, and proceeds from long-term debt of $851.0
million, partially offset by payments on long-term debt of $1,028.5 million. The
proceeds from these financings were primarily used, after payments on long-term
debt, to fund acquisitions and for the Refinance discussed below.

During the year ended December 31, 2020, net cash provided by financing
activities was $401.9 million. The cash flow used was driven primarily by
proceeds from long-term debt of $314.7 million and proceeds from preferred stock
issuance of $150.2 million, partially offset by payments on long-term debt of
$55.9 million. The net proceeds from these financings were primarily used for
acquisitions.

Equity Offerings

For more information regarding our IPO, see Note 2 in the Notes to the Consolidated Financial Statements included with this Annual Report on Form 10-K.

Credit facilities

As of January 1, 2020, EverCommerce Solutions Inc. (formerly PaySimple, Inc.),
as borrower, and EverCommerce Intermediate Inc. (formerly PaySimple
Intermediate, Inc.) had an outstanding credit agreement with various agents and
lenders (the "Credit Agreement"). The Credit Agreement provided for (i) a term
loan in an aggregate principal amount of $415.0 million (the "term loan"), (ii)
commitments for delayed draw term loans up to an aggregate principal amount of
$135.0 million (the "Delayed Draw Term Loans"), (iii) commitments for revolving
loans up to an aggregate principal amount of $50.0 million (the "Revolver") and
(iv) a sub-limit of the Revolver available for letters of credit up to an
aggregate face amount of $10.0 million, or the letters of credit (the term loan,
Delayed Draw Term Loans and Revolver are referred to herein as the "Credit
Facilities"). In September 2020, the Credit Agreement was amended to provide for
additional commitments of Delayed Draw Term Loans in an aggregate principal
amount of $250.0 million on the same terms and conditions as the original
Delayed Draw Term Loans under the Credit Agreement. Following this amendment,
the aggregate principal amount of Delayed Draw Term Loans available under the
Credit Agreement was $385.0 million.

Simultaneously with the execution of the Credit Agreement, we and various of our
subsidiaries entered into a collateral agreement and guarantee agreement.
Pursuant to the guarantee agreement, EverCommerce Intermediate Inc. and various
of our subsidiaries were guarantors under the Credit Agreement. Pursuant to the
collateral agreement, the Credit Facilities were collateralized by substantially
all our assets, including our intellectual property and the equity interests of
our various subsidiaries, including EverCommerce Solutions Inc.

                                     II-19
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The Credit Agreement that governed the Credit Facilities contained certain
affirmative and negative covenants, including, among other things, restrictions
on indebtedness, issuance of preferred equity interests, liens, fundamental
changes and asset sales, investments, negative pledges, repurchases of stock,
dividends and other distributions and transactions with affiliates and a passive
holding company covenant applicable to EverCommerce Intermediate Inc. In
addition, we were subject to a financial covenant with respect to the Revolver
whereby, if the aggregate principal amount of revolving loans and letter of
credit disbursements, together with the amount of all undrawn letters of credit
(excluding undrawn letters of credit up to $5.0 million and letters of credit
that are cash collateralized) outstanding on the last day of any fiscal quarter,
exceeded 35% of the aggregate principal amount of the Revolver, then our First
Lien Leverage Ratio (as defined in the Credit Agreement) as of the last day of
such fiscal quarter was required to be 8.80 to 1.00 or less.

New credit facilities

In connection with our IPO, on July 6, 2021 we refinanced our existing Credit
Facilities and EverCommerce Solutions Inc., as borrower, and EverCommerce
Intermediate Inc. entered into a new credit agreement (the "New Credit
Agreement") in an aggregate principal amount of $540.0 million, consisting of
(i) an aggregate principal amount of $350.0 million ("New Initial Term Loans"),
(ii) a revolver with a capacity of $190.0 million ("New Revolver") and (iii) a
sub-limit of the New Revolver available for letters of credit up to an aggregate
face amount of $20.0 million. We used the net proceeds of the New Term Loans and
a portion of the funds available under our New Revolver, together with the net
proceeds from the IPO, to repay all amounts outstanding under our Credit
Facilities. These transactions are collectively referred to herein as the
"Refinance". In August 2021, the Company used the net proceeds from the sale of
the additional shares of common stock following the exercise of the
underwriters' over-allotment option granted in our IPO to repay $44.0 million of
the amount outstanding under the New Revolver. In November 2021, the Company
drew an additional $155.0 million on the New Revolver to fund an acquisition.
Subsequently, in November 2021, the Company drew an additional $200.0 million
("New Additional Term Loans," and collectively with the New Initial Term Loans,
the "New Term Loans") as permitted by the New Credit Agreement. The Company used
the proceeds to repay all amounts outstanding on the New Revolver and for
general corporate purposes. The New Initial Term Loans, New Additional Term
Loans and New Revolver are collectively referred to herein as the "New Credit
Facilities."

Simultaneously with the execution of the New Credit Agreement, we and various of
our subsidiaries entered into a collateral agreement and guarantee agreement.
Pursuant to the guarantee agreement, EverCommerce Intermediate Inc. and various
of our subsidiaries are guarantors of the obligations under the New Credit
Agreement. Pursuant to the collateral agreement, the New Credit Facilities are
secured by liens on substantially all of our assets, including our intellectual
property and the equity interests of our various subsidiaries, including
EverCommerce Solutions Inc.

The New Credit Agreement contains certain affirmative and negative covenants,
including, among other things, restrictions on indebtedness, issuance of
preferred equity interests, liens, fundamental changes and asset sales,
investments, negative pledges, repurchases of stock, dividends and other
distributions and transactions with affiliates. In addition, we are subject to a
financial covenant with respect to the New Revolver whereby, if the aggregate
principal amount of revolving loans (excluding letters of credit) outstanding on
the last day of any fiscal quarter exceeds 35% of the aggregate commitments
available under the New Revolver, then our first lien leverage ratio as of the
last day of such fiscal quarter must be 7.50 to 1.00 or less.

Borrowings under the New Credit Agreement are available as ABR or Eurocurrency
borrowings. ABR borrowings under the New Credit Agreement accrue interest at an
alternate base rate plus an applicable rate, and Eurocurrency borrowings accrue
interest at an adjusted LIBOR rate plus an applicable rate. The ABR rate
represents the greater of the prime rate, Federal Reserve Bank of New York rate
plus ½ of 1%, and an adjusted LIBOR rate for a one month interest period plus
1%. The applicable rate for the New Term Loans and the New Revolver loans is 3%
for Eurocurrency borrowings and 2% for ABR Borrowings, in each case subject to
change based on our first lien net leverage ratio.

For ABR loans, interest payments are due on a quarterly basis on the last business day of each month of March, June, September and December. For Eurocurrency borrowings, interest payments are due on the

                                     II-20
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last business day of the interest period applicable to the borrowing and, in the
case of a Eurocurrency borrowing with an interest period of more than three
months' duration, each day prior to the last day of such interest period that
occurs at intervals of three months' duration after the first day of such
interest period.

The New Revolver has a variable commitment fee, which is based on our first lien
leverage ratio. We expect the commitment fee to range from 0.25% to 0.375% per
annum. We are obligated to pay a fixed fronting fee for letters of credit of
0.125% per annum.

Amounts borrowed under the New Revolver may be repaid and re-borrowed through
maturity of the New Revolver in July 2026. The New Term Loans mature in July
2028. New Term Loans may be repaid or prepaid but may not be re-borrowed.

As of December 31, 2021, there was $548.6 million outstanding under our New
Credit Facilities, comprising $548.6 million related to the New Term Loans and
none outstanding related to the New Revolver. The effective interest rate on the
New Term Loans was approximately 3.9% from July 6, 2021 through December 31,
2021.

From December 31, 2021we were in compliance with the covenants of the new credit agreement.

Contractual Obligations

Refer to Notes 9 and 16 in the notes to the consolidated financial statements
included in this Annual Report on Form 10-K for a discussion of our debt and
operating lease obligations, respectively.

Critical accounting estimates

Our financial statements are prepared in accordance with U.S. GAAP. The
preparation of our financial statements in conformity with U.S. GAAP requires us
to make estimates and assumptions that affect certain reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period.

While our significant accounting policies are described in further detail in
Note 2 in the notes to the consolidated financial statements included in this
Annual Report on Form 10-K, we believe that the following accounting policies
are those most critical to the judgments and estimates used in the preparation
of our financial statements.

Revenue Recognition

Revenues are derived from subscription and transaction fees, marketing
technology solutions, and other revenues. We recognize revenue when our
customers obtain control of goods or services in an amount that reflects the
consideration that we expect to receive in exchange for those goods or services.
In determining the total consideration that we expect to receive, we include
variable consideration only to the extent that it is probable that a significant
reversal of cumulative revenue will not occur when the uncertainty is resolved.

Subscription and transaction fees:

Subscription revenue is primarily comprised of the sale of SaaS offerings, software licenses and associated support services and payment processing services.

The timing of revenue recognition within our software subscription services is
dictated by the nature of the underlying performance obligation. Our SaaS
offerings and license support services are generally recognized ratably over the
contractual period that the services are delivered, beginning on the date our
service is made available to customers. Revenues generated from the sale of
on-premise perpetual or term licenses are generally recognized at the point in
time when the software is made available to the customer to download or use.
Subscription revenue related contracts can be both short and long-term, with
stated contract terms that range from one month to five years. Our contracts may
contain termination for convenience provisions that allow the Company, customer
or both parties

                                     II-21
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the ability to terminate for convenience, at any time or upon specified notice, without penalty.

Transaction fees relate to payment processing and group purchasing program
administration services. In fulfillment of our payment processing services, we
partner with third-party merchants and processors who assist us in fulfillment
of our obligations to customers. We have concluded that we do not possess the
ability to control the underlying services provided by third parties in the
fulfillment of our obligations to customers and therefore recognize revenue net
of interchange fees retained by the card issuing financial institutions and fees
charged by payment networks. Transaction services contracts with customers are
generally for a term of one month and automatically renew each month.

We also receive rebates from contracted suppliers in exchange for our program
administration services. Rebates earned are based on a defined percentage of the
purchase price of goods and services sold to members under the contract the
Company has negotiated with its suppliers. Administration services contracts
with customers are generally for an annual or monthly term and renew
automatically upon lapse of the current term.

Marketing technology solutions:

Marketing technology solutions consist of digital advertising management and consumer connection services.

Revenue generated from digital advertising management services is recognized on
a ratable basis over the service period as the customer simultaneously receives
and consumes the benefits of the management services evenly throughout the
contract period. Revenue generated from consumer connection services may be
recognized at either a point-in-time or an over-time basis as each connection is
delivered.

Contracts for marketing technology solutions services are generally short-term with stated contract terms of less than one year.

Other:

Other revenues generally consist of fees associated with the sale of distinct
professional services and hardware. Contract terms for other revenue
arrangements are generally short-term, with stated contract terms that are less
than one year.

Our professional services associated with our subscription revenue generally
relate to standard implementation, configuration, installation, or training
services applied to both SaaS and on-premise deployment models. Marketing
revenue related professional service fees are derived from website design,
creation or enhancement services. Professional service revenue is recognized
over time as the services are performed, as the customer simultaneously receives
and consumes the benefit of these services.

Hardware revenue is recognized at a point-in time and consists of equipment that
supports or enables our products or services within subscription and transaction
fees offerings.

Performance obligations and autonomous selling price:

Our contracts at times include the sale of multiple promised goods or services
that have been determined to be distinct. The transaction price for contracts
with multiple performance obligations is allocated based on the relative
stand-alone selling price of each performance obligation within the contract.

Judgement can be involved when determining the stand-alone selling price of
products and services. For the majority of the Company's SaaS, on-premise
license and professional services, we establish a stand-alone selling price
based on observable selling prices to similar classes of customers. If the
stand-alone selling price is not observable through past transactions, we
estimate the stand-alone selling price taking into consideration available
information such as market conditions and internally approved pricing guidelines
related to the performance obligation. As permitted under ASC 606, at times we
have established the stand-alone selling price of performance

                                     II-22
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obligations as a range and utilize this range to determine whether there is a
discount that needs to be allocated based on the relative stand-alone selling
price of the various performance obligations.

At contract inception, we perform a review of each performance obligation's
selling price against the established stand-alone selling price range. If any
performance obligations are priced outside of the established stand-alone
selling price range, we reallocate the total transaction price to each
performance obligation based on the relative stand-alone selling price for each
performance. The established range is reassessed on a periodic basis when facts
and circumstances surrounding these established ranges change.

Business combinations

Our acquisitions have been accounted for under the acquisition method. Net
assets and results of operations are included in our financial statements
commencing at the respective acquisition dates. We allocate the fair value of
the purchase consideration of our acquisitions to the tangible and intangible
assets acquired and liabilities assumed, based on their estimated fair values.
The excess of the fair value of purchase consideration over the fair values of
these identifiable assets and liabilities is recognized as goodwill. The
allocation of the purchase price requires management to make significant
estimates in determining the fair values of assets acquired and liabilities
assumed, especially with respect to intangible assets. These estimates and
assumptions can include, but are not limited to, the cash flows that an asset is
expected to generate in the future, the appropriate weighted average cost of
capital, and the estimated useful lives. Changes in these assumptions could
affect the carrying value of these assets.

We perform an impairment test annually in the fourth quarter or whenever events
or changes in circumstances indicate that the carrying value of goodwill might
not be fully recoverable. In accordance with applicable accounting guidance, a
company can assess qualitative factors to determine whether it is necessary to
perform a goodwill impairment test. Alternatively, a company may elect to
proceed directly to a quantitative goodwill impairment test. The Company's
annual impairment assessment did not identify any goodwill impairment during the
years ended December 31, 2021, 2020 or 2019.

Intangible assets are initially valued at fair value using generally accepted
valuation methods appropriate for the type of intangible asset. Intangible
assets with definite lives are amortized over their estimated useful lives and
are reviewed for impairment if indicators of impairment arise. Intangible assets
primarily consist of customer relationships which include government contracts,
developed technology, trademarks and trade names, and non-compete agreements,
which are recorded at acquisition date fair value, less accumulated
amortization. The determination of estimated useful lives and the allocation of
purchase price to intangible assets requires significant judgment and affects
the amount of future amortization and possible impairment charges. We determine
the appropriate useful life of intangible assets by performing an analysis of
expected cash flows of the acquired assets.

Income taxes

Deferred income tax assets and liabilities are determined based upon the net tax
effect of the differences between the financial statement carrying amounts and
the tax basis of assets and liabilities and are measured using the enacted tax
rate expected to apply to taxable income or loss in the years in which the
differences are expected to be reversed. A valuation allowance is used to reduce
some or all of the deferred tax assets if, based upon the weight of available
evidence, it is more likely than not that those deferred tax assets will not be
realized. In making such determination, we consider all available positive and
negative evidence, including future reversals of existing taxable temporary
differences, projected future taxable income, tax planning strategies, recent
financial operations and their associated valuation allowances, if any.

We recognize the tax benefit from an uncertain tax position only when it is more
likely than not, based on the technical merits of the position, that the tax
position will be sustained upon examination, including the resolution of any
related appeals or litigation. The tax benefits recognized in the consolidated
financial statements from such a position are measured as the largest benefit
that has a greater than fifty percent likelihood of being realized upon ultimate
resolution.

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Capitalized software

We capitalize certain costs related to software developed for internal use for
which we have no plans to market externally. The internal use software includes
the software used for our SaaS offerings. We expense the costs of developing
computer software until the software has reached the application development
stage and capitalize all costs incurred from that time until the software has
been placed in service, at which time amortization of the capitalized costs
begins. Determination of when the software has reached the application
development stage is based upon completion of conceptual designs, evaluation of
alternative designs and performance requirements. Costs of major enhancements to
internal use software are capitalized while routine maintenance of existing
software is charged to expense as incurred.

We also capitalize certain costs related to software developed for external use
for which we plan to sell to customers, i.e. on-premise software to be installed
on customer computers at the customer site. Costs incurred prior to reaching
technological feasibility are expensed as incurred. Once technological
feasibility is reached, additional development costs incurred are capitalized.
Technological feasibility is demonstrated by the completion of the product
design and when all high-risk development issues have been resolved.
Capitalization ceases when the product is available for general release to the
customers.

We amortize both internal and external software costs on a straight-line basis over their estimated useful life of five years.

Stock-based compensation

All stock-based compensation, including grants of common stock options and
restricted stock, are valued at fair value on the date of grant. We use the
Black-Scholes option-pricing model to estimate the fair value of common stock
options granted with time-based vesting. The following inputs are considered in
estimating the fair value:

Risk-free interest rate: The risk-free rate is based on observed interest rates appropriate for the terms of our grants.

Dividend Yield: Dividend yield is based on history and the expectation of paying no dividends.

Expected term: The expected term is based on the "simplified" method that
measures the expected term as the average of the vesting period and the
contractual term, given our limited stock option exercise data. Once we have
sufficient option exercise data we will calculate the expected term based on our
history of option exercises.

Expected volatility: We do not have a sufficient history of market prices of our
common stock, and as such volatility is estimated, using historical volatilities
of comparable public entities. Once we have sufficient history of trading prices
we will use our calculated volatility.

Valuation of common shares

For all periods prior to our IPO, the fair value of the shares of common stock
underlying our share-based awards were estimated on each grant date by our Board
of Directors with input from management and contemporaneous third-party
valuations. We believe that our Board of Directors has the relevant experience
and expertise to determine the fair value of our common stock. Given the absence
of a public trading market for our common stock prior to our IPO, our Board of
Directors exercised reasonable judgment and considered a number of objective and
subjective factors to determine the best estimate of the fair value of our
common stock, including:

• contemporaneous valuations of our common stock performed by independent third party valuators;

•our actual operating results and financial performance;

•general industry and economic conditions;

•the rights, preferences and privileges of our then outstanding convertible preferred stock over those of our common stock;

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•the likelihood of a liquidity event occurring for holders of our common stock, such as an initial public offering or sale of our company, given prevailing market conditions;

• equity market conditions affecting comparable public companies and the market performance of comparable publicly traded companies;

•the we and global capital market conditions; and,

•the lack of marketability of our common stock and the results of independent
third-party valuations. Valuations of our common stock were prepared by an
unrelated third-party valuation firm in accordance with the guidance provided by
the FASB in ASC 718, ASC 820, as well as the AICPA in its Accounting and
Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as
Compensation.

Recent accounting pronouncements

See Note 2 in the notes to the consolidated financial statements included in
this Annual Report on Form 10-K for a discussion of accounting pronouncements
recently adopted and recently issued accounting pronouncements not yet adopted
and their potential impact to our financial statements.

Election under the Jumpstart Our Business Startups Act of 2012

The Company currently qualifies as an "emerging growth company" under the
Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the
Company is provided the option to adopt new or revised accounting guidance
either (i) within the same periods as those otherwise applicable to non-emerging
growth companies or (ii) within the same time periods as private companies.

The Company has elected to adopt new or revised accounting guidance within the
same time period as private companies, unless management determines it is
preferable to take advantage of early adoption provisions offered within the
applicable guidance. Our utilization of these transition periods may make it
difficult to compare our financial statements to those of non-emerging growth
companies and other emerging growth companies that have opted out of the
transition periods afforded under the JOBS Act.

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