Asure Software Inc. Reports Strong Growth Amid Challenges

Asure Software Inc ((ASUR)) has held its Q4 earnings call. Read on for the main highlights of the call.

Asure Software Inc. recently held its earnings call, where the overall sentiment was optimistic despite some challenges. The company reported significant revenue and bookings growth, alongside successful product launches and positive future guidance. However, they also acknowledged issues such as a decline in ERTC revenue, net losses, and margin impacts due to investments. Nonetheless, the strategic advancements and growth indicate a positive outlook for the company.

Strong Revenue Growth

In 2024, Asure Software Inc. reported a modest increase in total revenue to $119.8 million. Excluding ERTC revenues, the company’s total revenues rose by 17%, with recurring revenues growing by 15% and making up 96% of total revenues, compared to 84% in 2023.

Successful Expansion and Product Launches

The company successfully launched AssurePay, an innovative alternative to online banking, and integrated several new products, including employee recruiting technology, benefit brokerage capabilities, and a 401(k) offering. These expansions are expected to enhance the company’s market presence and service offerings.

Significant Increase in Bookings

Asure’s sales efforts in 2024 resulted in an impressive 86% increase in new bookings compared to the previous year. This growth highlights the company’s successful strategies in attracting new clients and expanding its business.

New Multiyear Agreement

A significant development for Asure was the signing of a multiyear agreement with an industry leader in audit, tax, consulting, and advisory services. This partnership aims to resell payroll and payroll tax management solutions, potentially boosting Asure’s market reach.

Decline in ERTC Revenue

Despite the positive growth, Asure faced a decline in ERTC revenue by $16.5 million, which impacted the overall revenue growth. This decline was one of the challenges highlighted during the earnings call.

Net Loss for the Year

The company reported a net loss of $11.8 million for the full year, compared to a $9.2 million loss in the prior year. This increase in net loss was attributed to various factors, including investments and revenue declines in certain areas.

Challenges in HR Compliance

Asure faced challenges in the HR compliance group related to ERTC upsell activity from 2023. These challenges are expected to continue into the first half of 2025, posing potential hurdles for the company.

Investment Impact on Margins

Investments in business expansion and technology had an impact on margins, with full-year gross margins decreasing from 72% to 69%. This reflects the cost of strategic investments aimed at long-term growth.

Positive Guidance for 2025

Looking ahead, Asure Software Inc. provided positive guidance for 2025, projecting a revenue range of $134 to $138 million, representing mid-teens growth. The company aims for EBITDA margins between 23% and 24%, excluding potential future acquisitions. Asure plans to focus on expanding its client base, enhancing cross-selling opportunities, and leveraging recent product additions and acquisitions to drive profitability and scale.

In conclusion, Asure Software Inc.’s earnings call conveyed an optimistic sentiment, with significant growth in revenue and bookings, successful product launches, and positive guidance for the future. Despite challenges such as ERTC revenue decline and net losses, the company’s strategic advancements and focus on expansion indicate a promising outlook.