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ESMT NYSE· Engagesmart Inc
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ESMT NYSE· Engagesmart Inc
Earnings report Q3 2023

ESMT Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

ESMT's revenue increased by $18.9 million for the three-month period ended September 30, 2023, compared to the same period in 2022. This growth was primarily driven by a $11.7 million increase in transaction and usage-based revenue, resulting from a higher number of Transactions Processed. Additionally, there was a $7.9 million increase in subscription revenue due to more customers utilizing ESMT's solutions and expansion within existing customers. However, there was a slight decrease of $0.7 million in other revenue.

Strengths

ESMT's revenue growth in the latest quarter can be attributed to the increased adoption of its solutions by customers, leading to higher transaction and usage-based revenue. The company's management highlighted the positive impact of a price increase implemented in the first quarter of 2023, which contributed to the overall revenue growth. Furthermore, ESMT's Enterprise Solutions segment demonstrated an improved Adjusted EBITDA margin of 13.9% for the three-month period and 15.9% for the nine-month period ended September 30, 2023, compared to the corresponding periods in 2022.

Challenges

Despite the overall revenue growth, ESMT experienced a decrease of $0.7 million in other revenue during the latest quarter. This decline may pose a challenge for the company, and further analysis is required to understand the factors behind this decrease.

Noteworthy

ESMT's SMB Solutions segment showed significant revenue growth of $38.1 million for the nine-month period ended September 30, 2023, compared to the same period in 2022. This growth was primarily driven by a $25.3 million increase in subscription revenue, resulting from more customers utilizing ESMT's solutions and expansion within existing customers. Additionally, transaction and usage-based revenue increased by $13.0 million, driven by an increase in Transactions Processed and the impact of a price increase implemented in the first quarter of 2023.

Summary

ESMT reported strong revenue growth in the latest quarter, with an increase of $18.9 million compared to the same period in 2022. This growth was primarily driven by higher transaction and usage-based revenue, as well as increased subscription revenue. The company's SMB Solutions segment demonstrated significant revenue growth, while the Enterprise Solutions segment showed improved profitability with an increased Adjusted EBITDA margin. However, ESMT faced a slight decrease in other revenue, which may pose a challenge for the company. Overall, ESMT's performance in the latest quarter reflects positive momentum and successful customer adoption of its solutions.

Source documents

Form 10-Q  filed on Nov 02, 2023
7 pages scanned

Reference data

Company financials Q3 revenue 97.7M
Analyst estimates Q3 EPS beat by 30.57%
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