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No. of Recommendations: 5
EngageSmart LLC.

Sounds like a bunch of lawyers that crank out prenups.

They IPO'd last week. I no longer invest, but bought a few shares today. Sometimes you gotta say
"What the Heck", make your move.

Here's what they say they do: We offer vertically-tailored customer engagement software and
integrated payment capabilities that simplify our customers’ engagement with their clients by
driving digital adoption and self-service.
Blah, blah, blah.

Here's what I think they do: They sell subscriptions for cloud software to doctors, dentists, city
and town governments, insurance companies, non-profits, and utilities. ESMT's software helps these
customers enroll, schedule, and track their clients, present them with a bill or statement, and
offer them a bunch of easy payment options. A good example is City of Boston's parking ticket
system.

Healthcare, government, utilities, financial services -- their customers are recession defensive.

I use bill.com (NYSE: BILL) as a comp. In the last 12 months...

ESMT had $183M in revenue.
BILL had $238M in revenue.

ESMT grew revenue 53% year over year.
BILL grew revenue 51% year over year.

ESMT had 124% net dollar retention rate.
BILL had 124% net dollar retention rate.

ESMT had 75% Gross Margin.
BILL had 74% Gross Margin.

ESMT had 63% Operating Expenses.
BILL had 122% Operating Expenses.

ESMT has a Market Cap of $5.7 billion.
BILL has a Market Cap of $25.6 billion.

ESMT's problem is that it's making a GAAP profit. Plus BILL uses words like AI and machine learning.

That, and BILL just issued a secondary offering for $1.3 billion and raised $500 million in
convertible debt to buy two firms that let's them guide next year for...wait for it...100% growth!!!

Mercy.
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