# EDGAR Filing Document

**Accession Number:** 0001863105
**File Stem:** 0000950170-23-002243
**Filing Date:** 2023-2
**Character Count:** 67299
**Document Hash:** 2d5a96595968185cf6b022c69f594cc6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-002243.hdr.sgml**: 20230209

**ACCESSION NUMBER**: 0000950170-23-002243

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 44

**CONFORMED PERIOD OF REPORT**: 20230209

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230209

**DATE AS OF CHANGE**: 20230209

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** EngageSmart, Inc.
- **CENTRAL INDEX KEY:** 0001863105
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40835
- **FILM NUMBER:** 23601081

**BUSINESS ADDRESS:**
- **STREET 1:** 30 BRAINTREE HILL OFFICE PARK
- **STREET 2:** SUITE 101
- **CITY:** BRAINTREE
- **STATE:** MA
- **ZIP:** 02184
- **BUSINESS PHONE:** (781) 848-3733

**MAIL ADDRESS:**
- **STREET 1:** 30 BRAINTREE HILL OFFICE PARK
- **STREET 2:** SUITE 101
- **CITY:** BRAINTREE
- **STATE:** MA
- **ZIP:** 02184

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** EngageSmart, LLC
- **DATE OF NAME CHANGE:** 20210519

?xml version="1.0" encoding="ASCII"? 8-K

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

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**FORM** 8-K

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**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported):** February 9, 2023

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EngageSmart, Inc.

**(Exact name of registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| Delaware | 001-40835 | 83-2785225 |
| **(State or other jurisdiction**<br>**of incorporation)** | **(Commission File Number)** | **(IRS Employer**<br>**Identification No.)** |
| 30 Braintree Hill Office Park<br>Suite 101<br>Braintree**,** Massachusetts |  | 02184 |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

---

(781) 848-3733

**(Registrant's telephone number, including area code)** 

**N/A**

**(Former name or former address, if changed since last report)** 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br>**Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, $0.001 par value per share | ESMT | The New York Stock Exchange |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition.**

On February 9, 2023, EngageSmart, Inc. (the "Company") issued a press release announcing its financial results for the quarter and year ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information furnished under this Item 2.02, including Exhibit 99.1 incorporated by reference herein, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

**Item 7.01 Regulation FD Disclosure.**

In connection with the issuance of the press release attached hereto as Exhibit 99.1, the Company is holding a public conference call and webcast on February 9, 2023, at 8:30 a.m. ET, during which the Company will provide the investor presentation attached as Exhibit 99.2 to this Current Report. The presentation will also be posted on the Company's investor relations website.

The information furnished under this Item 7.01, including Exhibit 99.1 and Exhibit 99.2 incorporated by reference herein, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [<u>Financial Results Press Release, dated February 9, 2023.</u>](esmt-ex99_1.htm) |
| 99.2 | [<u>Investor Presentation, dated February 9, 2023.</u>](esmt-ex99_2.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document)  |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **EngageSmart, Inc.** | **EngageSmart, Inc.** |
| Date: February 9, 2023 | By: | /s/ Cassandra Hudson |
|  | Name: | Cassandra Hudson |
|  | Title:  | Chief Financial Officer |

---

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## Exhibit 99.1

**Exhibit 99.1**

![img252172144_0.jpg](img252172144_0.jpg)

**EngageSmart Announces Fourth Quarter and Full Year 2022 Results**

Full Year 2022 Revenue of $303.9 million, up 41% year over year

Full Year 2022 Net Income of $20.6 million and Adjusted EBITDA of $49.3 million

**BOSTON - February 9, 2023** - EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, today reported financial results for the fourth quarter and full year ended December 31, 2022.

"Our fourth quarter results again exceeded our revenue and Adjusted EBITDA guidance, closing out a phenomenal year of outperformance," said Bob Bennett, EngageSmart CEO. "Robust customer demand and strong execution across our business segments drove record annual revenue of $303.9 million, representing 41% year-over-year growth, all organic, and record net income of $20.6 million and record annual Adjusted EBITDA of $49.3 million. Our dedication to simplifying customer and client engagement is resonating with customers, our products are gaining market share, and we are expanding our footprint across all verticals."

"We delivered outstanding profitable growth, as we leveraged our proven customer-focused product leadership strategy, our deep vertical expertise, our strategic alliances, and our highly motivated teammates to drive product innovation and extend our market leadership," stated Cassandra Hudson, EngageSmart CFO. "Our SMB segment is uniquely positioned to address the shortage of mental health professionals and the high demand for care. Driven by new customer adds, a favorable subscription mix, and the successful pricing and packaging changes, SMB achieved annual revenue growth of 52% in 2022. Our Enterprise segment continues to benefit from secular tailwinds, stemming from the need for organizations to digitize their operations. Fueled by customer go-lives and high digital adoption with existing customers, Enterprise exceeded our expectations and delivered annual revenue growth of 29%. Heading into 2023, we look forward to capitalizing on the underlying momentum in both segments of our business, supported by our strong balance sheet, highly profitable business model, and resilience to macro pressures."

**Fourth Quarter 2022 Financial and Business Performance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Total Revenue** increased 36% to $83.9 million compared to $61.6 million in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**SMB Revenue** increased 45% to $45.2 million compared to $31.1 million in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Enterprise Revenue** increased 27% to $38.7 million compared to $30.6 million in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Gross Profit** was $64.7 million, representing 77.2% gross margin, compared to $46.2 million, or 75.0% gross margin, for the fourth quarter of 2021. Adjusted Gross Profit was $66.7 million, representing 79.5% Adjusted Gross Margin, compared to $48.0 million, or 77.8% Adjusted Gross Margin, for the fourth quarter of 2021.<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Net Income** was $4.9 million, representing 5.8% net income margin, in the fourth quarter of 2022, compared to net loss of $0.9 million, or 1.5% net loss margin, in the fourth quarter of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Adjusted EBITDA** was $13.6 million, representing 16.2% Adjusted EBITDA Margin, compared to $6.3 million, or 10.2% Adjusted EBITDA Margin, for the fourth quarter of 2021.<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Total Transactions Processed** increased 25% to 38.9 million compared to 31.2 million in the fourth quarter of 2021.

**Full Year 2022 Financial and Business Performance**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Total Revenue** increased 41% to $303.9 million compared to $216.3 million in the prior year.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**SMB Revenue** increased 52% to $165.5 million compared to $108.7 million in the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Enterprise Revenue** increased 29% to $138.5 million compared to $107.5 million in the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Gross Profit** was $232.1 million, representing 76.4% gross margin, compared to $161.2 million, or 74.5% gross margin, in the prior year. Adjusted Gross Profit was $239.3 million, representing 78.8% Adjusted Gross Margin, compared to $167.9 million, or 77.6% Adjusted Gross Margin, in the prior year.<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Net Income** was $20.6 million, representing 6.8% net income margin, compared to a net loss of $9.0 million, or 4.1% net loss margin, in the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Adjusted EBITDA** was $49.3 million, representing 16.2% Adjusted EBITDA Margin, compared to $30.6 million, or 14.2% Adjusted EBITDA Margin, in the prior year.<sup>1</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Total Transactions Processed** increased 32% to 146.8 million compared to 111.4 million in the prior year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Total Number of Customers** increased 24% to 102,700 as of December 31, 2022, compared to 83,000 as of December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Cash and Cash Equivalents** were $311.8 million as of December 31, 2022, compared to $254.3 million as of December 31, 2021.

____________________

<sup>1</sup>Reconciliations of GAAP to non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Adjusted EBITDA Margin, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below.

**2022 Business Highlights**

EngageSmart and its vertically tailored solutions achieved industry recognition:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•EngageSmart named one of the fastest-growing companies in North America on the 2022 Deloitte Technology Fast 500™.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•EngageSmart named a winner of the Top Workplaces USA 2022 Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•EngageSmart named a winner of the Top Workplaces for Compensation & Benefits, Employee Well-Being, Innovation, Leadership, Purpose & Values, and Work-Life Flexibility in 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•SimplePractice honored as Gold Stevie® Award Winner in the 2022 Stevie Awards for Great Employers and named to Built-In's 2022 Best Places to Work Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•DonorDrive named Salesforce's 2022 Nonprofit Product Partner of the Year.

Vertical expertise and product innovation drive strong market leadership across verticals:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•SimplePractice launched SimplePractice Enterprise, an API integration for Employee Assistance Programs and Managed Care Organizations that connects to practitioners' SimplePractice accounts and creates a streamlined referral process for providers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•InvoiceCloud launched functionalities that remove friction and enhance the customer experience, including data management tools that enable data-driven decision making.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•DonorDrive added new features to its mobile charity fundraising app to further simplify fundraising and boost supporter engagement.

EngageSmart added Scott Semel, Senior Vice President, General Counsel, to the Leadership Team and added Ian Knox, Chief Product Officer at SimplePractice.

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**Financial Outlook**

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| | | |
|:---|:---|:---|
|  | **Q1'23** | **FY'23** |
|  | **Guidance** | **Guidance** |
| Revenue (in millions) | $86.0 - $87.0 | $380.0 - $384.0 |
| Adjusted EBITDA (in millions) | $13.5 - $14.0 | $66.5 - $69.0 |

---

With the information available as of February 9, 2023, we are providing the above guidance for the first quarter and full year of 2023, based on current market conditions and expectations. This guidance is subject to various important cautionary factors referenced in the "Forward-Looking Statements" section below.

We do not provide a reconciliation of Adjusted EBITDA guidance to net income (loss) on a forward-looking basis due to difficulty in predicting certain items excluded from this non-GAAP financial measure; specifically, stock-based compensation, provision for (benefit from) income taxes, transaction-related expenses, and restructuring charges. We expect the variability of these excluded items may have a significant, and potentially unpredictable impact on our future GAAP financial results.

**Webcast and Conference Call Information**

EngageSmart, Inc. (NYSE: ESMT), a leading provider of vertically tailored customer engagement software and integrated payments solutions, will report fourth quarter and full year 2022 financial results before the market opens on Thursday, February 9, 2023. Management will host a conference call to discuss the results at 8:30 a.m. ET.

The conference call will be webcast live on EngageSmart's investor relations website at <u>https://investors.engagesmart.com/events-and-presentations/events/</u>. A replay will be available on the investor relations website following the call.

For investors and analysts wishing to participate in the call, the dial-in numbers are (800) 225-9448 for domestic callers and (203) 518-9708 for international callers. The conference ID is ENGAGESMART, and the program title is EngageSmart Q4 2022 Earnings Call.

**About EngageSmart**

EngageSmart is a leading provider of vertically tailored customer engagement software and integrated payments solutions. At EngageSmart, our mission is to simplify customer and client engagement to allow our customers to focus resources on initiatives that improve their businesses and better serve their communities. EngageSmart offers single instance, multi-tenant, true Software-as-a-Service ("SaaS") vertical solutions, including SimplePractice, InvoiceCloud, HealthPay24 and DonorDrive, that are designed to simplify our customers' engagement with their clients by driving digital adoption and self-service. As of December 31, 2022, EngageSmart serves 99,300 customers in the SMB Solutions segment and 3,300 customers in the Enterprise Solutions segment across several core verticals: Health & Wellness, Government, Utilities, Financial Services, Healthcare and Giving. For more information, visit <u>www.engagesmart.com</u> and follow us on LinkedIn.

**Forward-Looking Statements**

Certain statements in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "expect," "intend," "anticipate," "estimate," "believe," "future," "could," "should," "plan," "aim," and other similar expressions. These forward-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our financial outlook for the first quarter and full year 2023 and thereafter, and other statements that are not historical facts. These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: our inability to sustain our rapid growth; failure to manage our infrastructure to support our future growth; our risk management efforts not being effective to prevent fraudulent activities; inability to attract new customers or convert trial customers into paying customers; inability to introduce new features or services successfully or to enhance our solutions;

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declines in customer renewals or failure to convince customers to broaden their use of solutions; inability to achieve or sustain profitability; failure to adapt and respond effectively to rapidly changing technology, evolving industry standards and regulations and changing business needs, requirements or preferences; real or perceived errors, failures or bugs in our solutions; intense competition; lack of success in establishing, growing or maintaining strategic partnerships; fluctuations in quarterly operating results; future acquisitions and investments diverting management's attention and difficulties associated with integrating such acquired businesses; general economic conditions (including inflation and rising interest rates), both domestically and internationally, as well as economic conditions affecting industries in which our customers operate; the war in Ukraine; concentration of revenue in our InvoiceCloud and SimplePractice solutions; COVID-19 pandemic and its impact on our employees, customers, partners, clients and other key stakeholders; legal and regulatory risks; and technology and intellectual property-related risks, among others.

Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company's operating results and financial condition are discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, and our subsequent Quarterly Reports on Form 10-Q, as updated by our future filings with the Securities and Exchange Commission ("SEC"). Such statements are based on the Company's beliefs and assumptions and on information currently available to the Company. The Company disclaims any obligation to publicly update or revise any such forward-looking statements as a result of developments occurring after the date of this document except as required by law.

**Non-GAAP Financial Measures**

This press release includes certain performance metrics and financial measures not based on GAAP, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Non-GAAP Operating Expenses, and Free Cash Flow, as well as key business metrics, including total Number of Customers and total Transactions Processed.

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Non-GAAP Operating Expenses, and Free Cash Flow are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP and should not be considered as an alternative to net income (loss), gross profit, operating expenses, net cash provided by operating activities or any other performance measure derived in accordance with GAAP.

We define Adjusted EBITDA as net income (loss) excluding interest (income) expense, net; provision for (benefit from) income taxes; depreciation; and amortization of intangible assets, as further adjusted for transaction-related expenses, the fair value adjustment of acquired deferred revenue, stock/equity-based compensation, and restructuring charges. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue plus the fair value adjustment of acquired deferred revenue.

We define Adjusted Gross Profit as gross profit as adjusted for the fair value adjustment of acquired deferred revenue, amortization of intangible assets, stock/equity-based compensation, and transaction-related expenses. We define Adjusted Gross Margin as Adjusted Gross Profit divided by revenue plus the fair value adjustment of acquired deferred revenue.

We define Non-GAAP Operating Expenses as GAAP operating expenses excluding stock/equity-based compensation and transaction-related expenses. We define Non-GAAP Operating Expenses as a percentage of revenue as Non-GAAP Operating Expenses divided by revenue plus the fair value adjustment of acquired deferred revenue.

We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment, including costs capitalized for development of internal-use software.

We define Number of Customers as individuals or entities with whom we directly contract to use our solutions.

We define Transactions Processed as the number of accepted payment transactions, such as credit card and debit card transactions, automated clearing house ("ACH") payments, emerging electronic payments, other communication, text messaging and interactive voice response transactions, and other payment transaction types, which are facilitated through our platform during a given period. We believe Transactions Processed is a key business metric for investors because it directly correlates with transaction and usage-based revenue. We use Transactions Processed to evaluate changes in transaction and usage-based revenue over time.

We calculate our dollar-based net retention rate at the end of a given period by using (a) the revenue from all customers during the twelve months ending one year prior to such period as the denominator and (b) the revenue from all remaining

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customers during the twelve months ending as of the end of such period minus the revenue from all customers who are new customers during those twelve months as the numerator. We define new customers as customers with whom we have generated less than twelve months of revenue. Acquired businesses are reflected in our dollar-based net retention rate beginning one year following the date of acquisition.

We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Non-GAAP Operating Expenses, and Free Cash Flow may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate these non-GAAP financial measures in the same manner. We present these non-GAAP financial measures because we consider these metrics to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

Non-GAAP financial measures assist management in assessing operating performance by removing the impact of items not directly resulting from our core operations, to present operating results on a consistent basis. Management uses these non-GAAP financial measures for planning purposes, including the preparation of our internal annual operating budget and financial projections; to evaluate the performance and effectiveness of our operational strategies; and to evaluate our capacity to expand our business. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income, gross profit, operating expenses, net cash provided by operating activities, or other financial statement data presented in accordance with GAAP in our consolidated financial statements.

**Disclosure** 

We disclose information to the public concerning EngageSmart, EngageSmart's products and services, and other items through a variety of disclosure channels in order to achieve broad, non-exclusionary distribution of information to the public. Some of the information distributed through these disclosure channels may be considered material information. Investors and others are encouraged to review the information we make public in the locations below.\* This list may be updated from time to time.

\*For information concerning EngageSmart and its products and services, please visit: <u>www.engagesmart.com</u> 

\*For information provided to the investment community, including news releases, events and presentations, and SEC filings, please visit: <u>investors.engagesmart.com/overview/default.aspx</u> 

\*For information provided to the media, including news releases, please visit: <u>investors.engagesmart.com/news/default.aspx</u> 

\*For additional information, please follow EngageSmart's social media accounts: <u>www.twitter.com/engagesmartinc</u>, <u>www.facebook.com/EngageSmartInc</u>, and <u>www.linkedin.com/company/engagesmart</u>

**Investor Relations**

Josh Schmidt<br>EngageSmart, Inc.<br><u>IR@engagesmart.com</u>

**Press:**

Nicole Bestard

Quarter Horse PR<br><u>Engagesmart@qh-pr.com</u>

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**EngageSmart, Inc.**

**Consolidated Statement of Operations**

**(Unaudited, in thousands, except share and per share amounts)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Revenue | $83900 | $61616 | $303920 | $216280 |
| Cost of revenue | 19163 | 15387 | 71850 | 55122 |
| Gross profit | 64737 | 46229 | 232070 | 161158 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 14476 | 13543 | 56746 | 45533 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling and marketing | 28459 | 21744 | 100721 | 72968 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 14685 | 9435 | 48696 | 33382 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration expense |  | (67) |  | 1303 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring charges |  |  |  | (241) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 2362 | 2362 | 9449 | 9448 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 59982 | 47017 | 215612 | 162393 |
| Income (loss) from operations | 4755 | (788) | 16458 | (1235) |
| Other income (expense), net: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, including related party interest | (122) | (141) | (483) | (8228) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income (expense), net | 1948 | (17) | 3414 | (124) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense), net | 1826 | (158) | 2931 | (8352) |
| Income (loss) before income taxes | 6581 | (946) | 19389 | (9587) |
| Provision for (benefit from) income taxes | 1696 | 1 | (1204) | (622) |
| Net income (loss) and comprehensive income (loss) | $4885 | $(947) | $20593 | $(8965) |
| Net income (loss) per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | $0.03 | $(0.01) | $0.13 | $(0.06) |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | $0.03 | $(0.01) | $0.12 | $(0.06) |
| Weighted-average number of common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 165658163 | 161724835 | 163816582 | 151609440 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 169488432 | 161724835 | 169170991 | 151609440 |

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**EngageSmart, Inc.**

**Consolidated Balance Sheets**

**(Unaudited, in thousands, except share and per share amounts)**

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| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
| **Assets** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $311780 | $254294 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $228 and $203 as of December 31, 2022 and December 31, 2021, respectively | 10971 | 10266 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unbilled receivables | 5413 | 3441 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 13680 | 7617 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 341844 | 275618 |
| Operating lease right-of-use assets | 26907 |  |
| Property and equipment, net | 14328 | 10968 |
| Goodwill | 425677 | 425677 |
| Acquired intangible assets, net | 72319 | 87920 |
| Other assets | 5422 | 3811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $886497 | $803994 |
| **Liabilities and stockholders' equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $1229 | $2090 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 38423 | 25229 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration liability |  | 2800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 8237 | 6792 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | 4632 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 52521 | 36911 |
| Long-term operating lease liabilities | 27161 |  |
| Deferred income taxes | 1322 | 4224 |
| Deferred revenue, net of current portion | 335 | 232 |
| Other long-term liabilities | 186 | 5528 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 81525 | 46895 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, par value $0.001 per share, 10,000,000 shares authorized and no shares issued and outstanding as of December 31, 2022 and December 31, 2021 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, par value $0.001 per share, 650,000,000 shares authorized and 166,081,011 and 161,860,980 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 166 | 162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 814319 | 787043 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated stockholders' deficit | (9513) | (30106) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 804972 | 757099 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $886497 | $803994 |

---

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**EngageSmart, Inc.**

**Consolidated Statements of Cash Flows**

**(Unaudited, in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| **Cash flows from operating activities:** |  |  |
| Net income (loss) | $20593 | $(8965) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 18772 | 18190 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred costs | 433 | 137 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock/equity-based compensation expense | 14189 | 9468 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration expense |  | 1303 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash operating lease expense | 4544 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (2902) | (1247) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of property and equipment | 22 | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest expense, including loss on extinguishment of debt | 234 | 4125 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (6496) | (4264) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | (705) | (2166) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unbilled receivables | (1972) | (468) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1846) | (864) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (797) | (1072) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 12048 | 8856 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 1548 | 2047 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (5371) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities | 24 | (707) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 52318 | 24421 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment, including costs capitalized for development of internal-use software | (6548) | (4521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (6548) | (4521) |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions |  | 331989 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock to General Atlantic (IC), L.P. in connection with the Corporate Conversion |  | 43236 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment to settle fractional shares related to Class A-2 shareholders in connection with the Corporate Conversion |  | (43236) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of long-term debt |  | (114174) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of debt issuance costs | (23) | (1146) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of debt extinguishment costs |  | (90) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of related party notes |  | (5900) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of contingent consideration | (1066) | (1868) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercise of stock/equity-based options | 13111 | 1577 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase and retirement of common shares |  | (51) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of taxes related to net share settlement of equity awards | (1035) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock under employee stock purchase plan | 1015 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of initial public offering costs | (286) | (5293) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 11716 | 205044 |
| Net increase in cash, cash equivalents and restricted cash | 57486 | 224944 |
| Cash, cash equivalents and restricted cash at beginning of period | 254594 | 29650 |
| Cash, cash equivalents and restricted cash at end of period | $312080 | $254594 |
| **Reconciliation of cash, cash equivalents, and restricted cash:** |  |  |
| Cash and cash equivalents | $311780 | $254294 |
| Restricted cash within other assets | 300 | 300 |
| Total cash, cash equivalents, and restricted cash | $312080 | $254594 |

---

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**EngageSmart, Inc.**

**Reconciliation of GAAP to Non-GAAP Measures**

**(Unaudited)**

**<u>Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (in thousands, except percentages) | (in thousands, except percentages) | (in thousands, except percentages) | (in thousands, except percentages) |
| Net income (loss) | $4885 | $(947) | $20593 | $(8965) |
| Net income (loss) margin | 5.8% | (1.5)% | 6.8% | (4.1)% |
| Adjustments: |  |  |  |  |
| &nbsp;&nbsp;Provision for (benefit from) income taxes | 1696 | 1 | (1204) | (622) |
| &nbsp;&nbsp;Interest (income) expense, net | (1841) | 127 | (2968) | 8213 |
| &nbsp;&nbsp;Amortization of intangible assets | 3901 | 3901 | 15601 | 15602 |
| &nbsp;&nbsp;Depreciation | 882 | 669 | 3171 | 2588 |
| &nbsp;&nbsp;Fair value adjustment of acquired deferred revenue |  | 58 |  | 180 |
| &nbsp;&nbsp;Stock/equity-based compensation | 4077 | 2305 | 14189 | 9468 |
| &nbsp;&nbsp;Restructuring charges |  |  |  | (241) |
| &nbsp;&nbsp;Transaction-related expense |  | 176 | (38) | 4422 |
| Adjusted EBITDA | $13600 | $6290 | $49344 | $30645 |
| Adjusted EBITDA Margin | 16.2% | 10.2% | 16.2% | 14.2% |

---

**<u>Reconciliation of GAAP Gross Profit to Adjusted Gross Profit</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (in thousands, except percentages) | (in thousands, except percentages) | (in thousands, except percentages) | (in thousands, except percentages) |
| Gross profit | $64737 | $46229 | $232070 | $161158 |
| Gross margin | 77.2% | 75.0% | 76.4% | 74.5% |
| Adjustments: |  |  |  |  |
| &nbsp;&nbsp;Fair value adjustment of acquired deferred revenue |  | 58 |  | 180 |
| &nbsp;&nbsp;Amortization of intangible assets | 1539 | 1539 | 6152 | 6154 |
| &nbsp;&nbsp;Stock/equity-based compensation | 460 | 87 | 1120 | 247 |
| &nbsp;&nbsp;Transaction-related expense |  | 75 |  | 156 |
| Adjusted Gross Profit | $66736 | $47988 | $239342 | $167895 |
| Adjusted Gross Margin | 79.5% | 77.8% | 78.8% | 77.6% |

---

------

**<u>Free Cash Flow</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (in thousands) | (in thousands) | (in thousands) | (in thousands) |
| Net cash provided by operating activities | $18204 | $4067 | $52318 | $24421 |
| Less: |  |  |  |  |
| &nbsp;&nbsp;Purchases of property and equipment, including costs capitalized for development of internal-use software | (1789) | (1331) | (6548) | (4521) |
| Free cash flow | $16415 | $2736 | $45770 | $19900 |

---

**<u>Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (in thousands, except percentages) | (in thousands, except percentages) | (in thousands, except percentages) | (in thousands, except percentages) |
| General and administrative expenses | $14476 | $13543 | $56746 | $45533 |
| General and administrative as a percentage of revenue | 17.3% | 22.0% | 18.7% | 21.1% |
| Less: |  |  |  |  |
| &nbsp;&nbsp;Stock/equity-based compensation | (1827) | (1878) | (8355) | (8070) |
| &nbsp;&nbsp;Transaction-related expense |  | (143) | 38 | (2306) |
| Non-GAAP general and administrative expenses | $12649 | $11522 | $48429 | $35157 |
| Non-GAAP general and administrative as a percentage of revenue | 15.1% | 18.7% | 15.9% | 16.2% |
| Selling and marketing expenses | $28459 | $21744 | $100721 | $72968 |
| Selling and marketing as a percentage of revenue | 33.9% | 35.3% | 33.1% | 33.7% |
| Less: |  |  |  |  |
| &nbsp;&nbsp;Stock/equity-based compensation | (910) | (244) | (2739) | (813) |
| &nbsp;&nbsp;Transaction-related expense |  |  |  | (603) |
| Non-GAAP selling and marketing expenses | $27549 | $21500 | $97982 | $71552 |
| Non-GAAP selling and marketing as a percentage of revenue | 32.8% | 34.9% | 32.2% | 33.1% |
| Research and development expenses | $14685 | $9435 | $48696 | $33382 |
| Research and development as a percentage of revenue | 17.5% | 15.3% | 16.0% | 15.4% |
| Less: |  |  |  |  |
| &nbsp;&nbsp;Stock/equity-based compensation | (880) | (96) | (1975) | (338) |
| &nbsp;&nbsp;Transaction-related expense |  | (25) |  | (55) |
| Non-GAAP research and development expenses | $13805 | $9314 | $46721 | $32989 |
| Non-GAAP research and development as a percentage of revenue | 16.5% | 15.1% | 15.4% | 15.2% |

---

------

**<u>Disaggregated Revenue</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (in thousands) | (in thousands) | (in thousands) | (in thousands) |
| **Enterprise Solutions** |  |  |  |  |
| Transaction and usage-based | $35814 | $28242 | $126742 | $97759 |
| Subscription | 2436 | 1973 | 8953 | 7636 |
| Other | 464 | 343 | 2762 | 2154 |
| &nbsp;&nbsp;Total Enterprise Solutions revenue | 38714 | 30558 | 138457 | 107549 |
| **SMB Solutions** |  |  |  |  |
| Transaction and usage-based | 11453 | 9476 | 45066 | 33360 |
| Subscription | 33470 | 21245 | 118963 | 74225 |
| Other | 263 | 337 | 1434 | 1146 |
| &nbsp;&nbsp;Total SMB Solutions revenue | 45186 | 31058 | 165463 | 108731 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenue | $83900 | $61616 | $303920 | $216280 |

---

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## Exhibit 99.2

![Slide 1](esmt-ex99_2s1.jpg)

Investor Presentation February 9, 2023 EngageSmart Investor Presentation

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![Slide 2](esmt-ex99_2s2.jpg)

Forward-Looking Statements Certain statements in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "expect," "intend," "anticipate," "estimate," "believe," "future," "could," "should," "plan," "aim," and other similar expressions. These forward-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our financial outlook for the first quarter and full year 2023 and thereafter, and other statements that are not historical facts. These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: our inability to sustain our rapid growth; failure to manage our infrastructure to support our future growth; our risk management efforts not being effective to prevent fraudulent activities; inability to attract new customers or convert trial customers into paying customers; inability to introduce new features or services successfully or to enhance our solutions; declines in customer renewals or failure to convince customers to broaden their use of solutions; inability to achieve or sustain profitability; failure to adapt and respond effectively to rapidly changing technology, evolving industry standards and regulations and changing business needs, requirements or preferences; real or perceived errors, failures or bugs in our solutions; intense competition; lack of success in establishing, growing or maintaining strategic partnerships; fluctuations in quarterly operating results; future acquisitions and investments diverting management's attention and difficulties associated with integrating such acquired businesses; general economic conditions (including inflation and rising interest rates), both domestically and internationally, as well as economic conditions affecting industries in which our customers operate; the war in Ukraine; concentration of revenue in our InvoiceCloud and SimplePractice solutions; COVID-19 pandemic and its impact on our employees, customers, partners, clients and other key stakeholders; legal and regulatory risks; and technology and intellectual property-related risks, among others. Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company's operating results and financial condition are discussed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, and our subsequent Quarterly Reports on Form 10-Q, as updated by our future filings with the Securities and Exchange Commission ("SEC"). Such statements are based on the Company's beliefs and assumptions and on information currently available to the Company. The Company disclaims any obligation to publicly update or revise any such forward-looking statements as a result of developments occurring after the date of this document except as required by law.

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![Slide 3](esmt-ex99_2s3.jpg)

This presentation includes certain performance metrics and financial measures not based on GAAP, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, and Non-GAAP Operating Expenses, as well as key business metrics, including total Number of Customers and total Transactions Processed. Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, and Non-GAAP Operating Expenses are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP and should not be considered as an alternative to net income (loss), gross profit, and operating expenses or any other performance measure derived in accordance with GAAP. We define Adjusted EBITDA as net income (loss) excluding interest (income) expense, net; provision for (benefit from) income taxes; depreciation; and amortization of intangible assets, as further adjusted for transaction-related expenses, the fair value adjustment of acquired deferred revenue, stock/equity-based compensation, and restructuring charges. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue plus the fair value adjustment of acquired deferred revenue. We define Adjusted Gross Profit as gross profit as adjusted for the fair value adjustment of acquired deferred revenue, amortization of intangible assets, stock/equity-based compensation, and transaction-related expenses. We define Adjusted Gross Margin as Adjusted Gross Profit divided by revenue plus the fair value adjustment of acquired deferred revenue. We define Non-GAAP Operating Expenses as GAAP operating expenses excluding stock/equity-based compensation and transaction-related expenses. We define Non-GAAP Operating Expenses as a percentage of revenue as Non-GAAP Operating Expenses divided by revenue plus the fair value adjustment of acquired deferred revenue. We define Number of Customers as individuals or entities with whom we directly contract to use our solutions. We define Transactions Processed as the number of accepted payment transactions, such as credit card and debit card transactions, automated clearing house ("ACH") payments, emerging electronic payments, other communication, text messaging and interactive voice response transactions, and other payment transaction types, which are facilitated through our platform during a given period. We believe Transactions Processed is a key business metric for investors because it directly correlates with transaction and usage-based revenue. We use Transactions Processed to evaluate changes in transaction and usage-based revenue over time. We calculate our dollar-based net retention rate at the end of a given period by using (a) the revenue from all customers during the twelve months ending one year prior to such period as the denominator and (b) the revenue from all remaining customers during the twelve months ending as of the end of such period minus the revenue from all customers who are new customers during those twelve months as the numerator. We define new customers as customers with whom we have generated less than twelve months of revenue. Acquired businesses are reflected in our dollar-based net retention rate beginning one year following the date of acquisition. We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, and Non-GAAP Operating Expenses may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate these non-GAAP financial measures in the same manner. We present these non-GAAP financial measures because we consider these metrics to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Non-GAAP financial measures assist management in assessing operating performance by removing the impact of items not directly resulting from our core operations, to present operating results on a consistent basis. Management uses these non-GAAP financial measures for planning purposes, including the preparation of our internal annual operating budget and financial projections; to evaluate the performance and effectiveness of our operational strategies; and to evaluate our capacity to expand our business. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income, gross profit, and operating expenses or other financial statement data presented in accordance with GAAP in our consolidated financial statements. Non-GAAP Financial Measures

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![Slide 4](esmt-ex99_2s4.jpg)

Adjusted EBITDA Reconciliation Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 (in thousands, except percentages) Net income (loss) $4,885 $(947) $20,593 $(8,965) Net income (loss) margin 5.8 % (1.5) % 6.8 % (4.1) % Adjustments: Provision for (benefit from) income taxes 1,696 1 (1,204) (622) Interest (income) expense, net (1,841) 127 (2,968) 8,213 Amortization of intangible assets 3,901 3,901 15,601 15,602 Depreciation 882 669 3,171 2,588 Fair value adjustment of acquired deferred revenue — 58 — 180 Stock/equity-based compensation 4,077 2,305 14,189 9,468 Restructuring charges — — — (241) Transaction-related expense — 176 (38) 4,422 Adjusted EBITDA $13,600 $6,290 $49,344 $30,645 Adjusted EBITDA Margin 16.2 % 10.2 % 16.2 % 14.2 %

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![Slide 5](esmt-ex99_2s5.jpg)

Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 (in thousands, except percentages) Gross profit $64,737 $46,229 $232,070 $161,158 Gross margin 77.2 % 75.0 % 76.4 % 74.5 % Adjustments: Fair value adjustment of acquired deferred revenue — 58 — 180 Amortization of intangible assets 1,539 1,539 6,152 6,154 Stock/equity-based compensation 460 87 1,120 247 Transaction-related expense — 75 — 156 Adjusted Gross Profit $66,736 $47,988 $239,342 $167,895 Adjusted Gross Margin 79.5 % 77.8 % 78.8 % 77.6 % Adjusted Gross Profit Reconciliation

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![Slide 6](esmt-ex99_2s6.jpg)

Non-GAAP Operating Expenses Reconciliation Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 (in thousands, except percentages) General and administrative expenses $14,476 $13,543 $56,746 $45,533 General and administrative as a percentage of revenue 17.3 % 22.0 % 18.7 % 21.1 % Less: Stock/equity-based compensation (1,827) (1,878) (8,355) (8,070) Transaction-related expense — (143) 38 (2,306) Non-GAAP general and administrative expenses $12,649 $11,522 $48,429 $35,157 Non-GAAP general and administrative as a percentage of revenue 15.1 % 18.7 % 15.9 % 16.2 % Selling and marketing expenses $28,459 $21,744 $100,721 $72,968 Selling and marketing as a percentage of revenue 33.9 % 35.3 % 33.1 % 33.7 % Less: Stock/equity-based compensation (910) (244) (2,739) (813) Transaction-related expense — — — (603) Non-GAAP selling and marketing expenses $27,549 $21,500 $97,982 $71,552 Non-GAAP selling and marketing as a percentage of revenue 32.8 % 34.9 % 32.2 % 33.1 % Research and development expenses $14,685 $9,435 $48,696 $33,382 Research and development as a percentage of revenue 17.5 % 15.3 % 16.0 % 15.4 % Less: Stock/equity-based compensation (880) (96) (1,975) (338) Transaction-related expense — (25) — (55) Non-GAAP research and development expenses $13,805 $9,314 $46,721 $32,989 Non-GAAP research and development as a percentage of revenue 16.5 % 15.1 % 15.4 % 15.2 %

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![Slide 7](esmt-ex99_2s7.jpg)

Growing customer affinity for digital experiences Rapid adoption of modern technologies Continuing shift to electronic payments Customers Expect Seamless Digital Experiences

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![Slide 8](esmt-ex99_2s8.jpg)

They Want Convenience & Ease of Interactions Scheduling Appointments Online Paying Bills Electronically Receiving Paperless Invoices

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![Slide 9](esmt-ex99_2s9.jpg)

Yet Industries Are Saddled with Manual Processes Pen & paper Error-prone Resource-intensive

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![Slide 10](esmt-ex99_2s10.jpg)

OUR MISSION Simplify Customer & Client Engagement Every time someone says,it shouldn't be this hard, they are right. " "

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![Slide 11](esmt-ex99_2s11.jpg)

117% 2022 Dollar-Based Net Retention Rate $4.9M\|$13.6M Q4'22 Net Income \| Adjusted EBITDA2 38.9M Q4'22 Transactions Processed 77.2%\|79.5% Q4'22 Gross Margin \| Adjusted Gross Margin2 Unless noted, figures shown are based on Q4'22. 1 Annualized Revenue is an approximation of total revenue for the full year based on Q4'21 and Q4'22 revenue multiplied by 4. We use Annualized Revenue as a performance metric. It should be viewed independently of revenue and is not intended to be combined with it. 2 Reconciliations of GAAP to Non-GAAP metrics are included at the front of the presentation. Strong Financial Performance High growth, margins, retention, visibility $83.9M Q4'22 Total Revenue 102,658 Q4'22 Number of Customers 36% Annualized YoY Revenue Growth1 + Q4'21 Annualized Revenue ($,M)1 Q4'22

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![Slide 12](esmt-ex99_2s12.jpg)

Unlocking a Significant Opportunity Enterprise: $18B Health & Wellness SMB: $10B We serve verticals with legacy systems and processes that result in inefficiencies and low digital adoption: Under-penetrated Resilient Non-cyclical Source: Bureau of Labor Statistics; Aite Group. SMB TAM is derived by taking the total number of health and wellness practitioners addressed by our SimplePractice solution using data from the Bureau of Labor Statistics and multiplying by the total spend opportunity per customer based on the current prevailing market price; Enterprise TAM is derived by taking the total number of bills per year in the United States, as estimated by Aite Group, and multiplying by our average revenue per transaction. Government • Utilities • Financial Services Giving • Healthcare $28B TAM In Underserved Markets

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![Slide 13](esmt-ex99_2s13.jpg)

Streamlining Patient Care with SimplePractice End-to-end digital practice management solution for small- & medium-sized health and wellness businesses 1 Annualized Revenue is an approximation of total revenue for the full year based on Q4'22 revenue multiplied by 4. We use Annualized Revenue as a performance metric. It should be viewed independently of revenue and is not intended to be combined with it. $180.7M Q4'22 Annualized SMB Revenue1 45% Q4'22 YoY SMB Revenue Growth SMB Financials 99,324 Q4'22 SMB Customers $33.5M Q4'22 SMB Revenue from Subscriptions Simplifies customer-facing and back-office workstreams Connects patients to practitioners Enables practitioners to expand their business Claim Filing Paperless Intakes AutoPay Treatment Planning Notes Credit Card Processing Calendar Sync Online Booking Appointment Reminders Secure Messaging Client Portal Telehealth CLIENT COMMUNICATION SCHEDULING BILLING DOCUMENTATION

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![Slide 14](esmt-ex99_2s14.jpg)

Growth and Expansion Vertical Expertise Deep expertise informs feature specialization across health & wellness verticals and drives product leadership Efficient Go-to-Market Strategy Word-of-mouth referrals & targeted digital marketing drive free trials with strong conversion Partnering with Our Practitioners SimplePractice enables practitioners to expand their business and add practitioners Attracting New Customers and Developing Existing Relationships Winning new customers Adding SimplePractice seats with growing practices Processing additional payment transactions

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![Slide 15](esmt-ex99_2s15.jpg)

Enterprise Financials Enables seamless digital customer billing & communication through modern payment & commerce technology Integrates with biller platforms and customer information systems Improves cash flow & reduces operating costs True SaaS, omnichannel customer engagement solutions for utilities, government, financial services, healthcare & giving Accelerating Customer Engagement $154.9M Q4'22 Annualized Enterprise Revenue1 27% Q4'22 YoY Enterprise Revenue Growth 3,334 Q4'22 Enterprise Customers $35.8M Q4'22 Enterprise Transaction and Usage-Based Revenue 1 Annualized Revenue is an approximation of total revenue for the full year based on Q4'22 revenue multiplied by 4. We use Annualized Revenue as a performance metric. It should be viewed independently of revenue and is not intended to be combined with it. Digital customer engagement

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![Slide 16](esmt-ex99_2s16.jpg)

Growth and Acceleration Vertical Specialization Breadth of payments expertise and vertically tailored solutions drive product leadership Strategic Alliances Alliances generate leads and accelerate implementation of our solutions Driving Digital Adoption for Billers Enterprise solutions accelerate revenue collection and drive operational efficiencies Fueling New Customer Growth and Driving Digital Adoption Winning new customers Processing additional payment transactions

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![Slide 17](esmt-ex99_2s17.jpg)

"It's simple to use, has amazing customer service, and keeps everything you need all in one place." Dr. Reina Olivera, DrOT, OTR/L South Florida "We saw an immediate impact in our online engagement with patients paying bills online." Christina Holmes, Director of FinanceCity of Escondido "DonorDrive has exceeded our expectations and been there every step of the way. You just don't see this type of customer service and product personalization anymore." Patrick Shields, Director of Business ServicesUtah Cancer Specialists "Giving our customers the choice, convenience, and simplicity that comes with making payments online has really helped us to improve the overall relationship we have with our customers." David Hovey, Director of Fundraising Initiatives The Lesbian, Gay, Bisexual and Transgender Community Center Our Customers' Success is Our Success Customer Reviews

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![Slide 18](esmt-ex99_2s18.jpg)

Simplifying Customer and Client Engagement Superior Talent Recruiting, retaining, and developing great people Vertical Expertise Leveraging our deep market expertise Customer Focus Putting our customers at the center of our decision-making Product Leadership Delivering the best products as measured by adoption & retention Efficient Go-to-Market Tailoring our strategies to our solutions and end-markets Strong Organic Growth with Positive Adjusted EBITDA Our Winning Playbook

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![Slide 19](esmt-ex99_2s19.jpg)

Driving Profitable Growth Build new products and features 15.4% R&D Investment1 (of 2022 Revenue) Expand intonew market segments 6 Core Verticals (since inception) Win new customers 19,656 Net New Customers (2022) Pursue selectstrategic acquisitions 6 Acquisitions (since 2015) 1 R&D Investment is calculated as Non-GAAP research and development expenses divided by revenue plus the fair value adjustment of acquired deferred revenue. Reconciliations of GAAP to Non-GAAP metrics are included at the front of the presentation. Grow with existing customers 117% Dollar-Based Net Retention Rate(2022)

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Creating Shareholder Value Recession Resistant Model Sticky Customer Relationships Product Leadership Across Verticals Winning Playbook Driven by Strong Leaders Compelling Market & Runway Durable Growth & Profitability

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Financial Overview

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Q4'22 & FY'22 Financial Results Strong Customer Growth & Digital Adoption Drive Record Revenue & Adjusted EBITDA Results $64.7M \| $66.7M Q4'22 Gross Profit \| Adjusted Gross Profit2 102,658 Q4'22 Number of Customers 38.9M Q4'22 Transactions Processed 36% Q4'22 YoY Revenue Growth $335.6M Q4'22 AnnualizedRevenue1 Unless noted, figures shown are based on Q4'22. 1 Annualized Revenue is an approximation of total revenue for the full year based on Q4'22 revenue multiplied by 4. We use Annualized Revenue as a performance metric. It should be viewed independently of revenue and is not intended to be combined with it.. 2 Reconciliations of GAAP to Non-GAAP metrics are included at the front of the presentation. "We delivered outstanding profitable growth, as we leveraged our proven customer focused product leadership strategy, our deep vertical expertise, our strategic alliances, and our highly motivated teammates to drive product innovation and extend our market leadership. Our SMB segment is uniquely positioned to address the shortage of mental health professionals and the high demand for care. Our Enterprise segment continues to benefit from secular tailwinds, stemming from the need for organizations to digitize their operations. Heading into 2023, we look forward to capitalizing on the underlying momentum in both segments of our business, supported by our strong balance sheet, highly profitable business model, and resilience to macro pressures." Robert P. Bennett CHIEF EXECUTIVE OFFICER Cassandra Hudson CHIEF FINANCIAL OFFICER "Our fourth-quarter results again exceeded our revenue and Adjusted EBITDA guidance, closing out a phenomenal year of outperformance. Robust customer demand and strong execution across our business segments drove record annual revenue of $303.9 million, representing 41% year-over-year growth, all organic, and record net income of $20.6 million and record annual Adjusted EBITDA of $49.3 million. Our dedication to simplifying customer and client engagement is resonating with customers, our products are gaining market share, and we are expanding our footprint across all verticals." $4.9M \| $13.6M Q4'22 Net Income \| Adjusted EBITDA2

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Significant Growth of Customers & Transactions Number of Customers (in thousands) Transactions Processed (in millions) +25% +24% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22

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Strong Revenue Growth SMB Revenue ($, M) Enterprise Revenue ($, M) +27% +45% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22

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Revenue Breakdown by Type and Segment SMB Enterprise Q4'22 in $M Q4'21 in $M Q1'21 in $M YoY Growth in % Q4'22 in $M Q4'21 in $M Q1'21 in $M YoY Growth in % Transaction and usage-based $11.5 $9.5 21% $35.8 $28.2 27% Subscription $33.5 $21.2 58% $2.4 $2.0 23% Other $0.3 $0.3 -22% $0.5 $0.3 35% Total Revenue $45.2 $31.1 45% $38.7 $30.6 27% Q4'22 Revenue 1 Tables may not foot due to rounding.

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Reconciliations of GAAP to Non-GAAP metrics are included at the front of the presentation. Q4'22 $, M Q4'22 % of Revenue Adjusted Gross Profit $66.7 79.5% Non-GAAP Sales & Marketing $27.5 32.8% Non-GAAP Research & Development $13.8 16.5% Non-GAAP General & Administrative $12.6 15.1% Adjusted EBITDA $13.6 16.2% Q4'22 Financials (non-GAAP)

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Revenue Breakdown by Type and Segment SMB Enterprise FY'22 in $M FY'21 in $M Q1'21 in $M YoY Growth in % FY'22 in $M FY'21 in $M Q1'21 in $M YoY Growth in % Transaction and usage-based $45.1 $33.4 35% $126.7 $97.8 30% Subscription $119.0 $74.2 60% $9.0 $7.6 17% Other $1.4 $1.1 25% $2.8 $2.2 28% Total Revenue $165.5 $108.7 52% $138.5 $107.5 29% FY'22 Revenue 1 Tables may not foot due to rounding.

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Reconciliations of GAAP to Non-GAAP metrics are included at the front of the presentation. FY'22 $, M FY'22 % of Revenue Adjusted Gross Profit $239.3 78.8% Non-GAAP Sales & Marketing $98.0 32.2% Non-GAAP Research & Development $46.7 15.4% Non-GAAP General & Administrative $48.4 15.9% Adjusted EBITDA $49.3 16.2% FY'22 Financials (non-GAAP)

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2023 Outlook $380.0M—$384.0M Revenue FY'23 $66.5M—$69.0M Adjusted EBITDA1 1 We do not provide a reconciliation of Adjusted EBITDA guidance to net income (loss) on a forward-looking basis due to difficulty in predicting certain items excluded from this non-GAAP financial measure; specifically, stock-based compensation, provision for (benefit from) income taxes, transaction-related expenses, and restructuring charges. We expect the variability of these excluded items may have a significant, and potentially unpredictable, impact on our future GAAP financial results. With the information available as of February 9, 2023, we are providing the above guidance for the first quarter and full year of 2023, based on current market conditions and expectations. This guidance is subject to various important cautionary factors referenced in the "Forward-Looking Statements" section on slide 2. As of February 9, 2023 $86.0M—$87.0M Revenue Q1'23 $13.5M—$14.0M Adjusted EBITDA1