• Total Revenue for 2024: $119.8 million, with a 17% increase excluding ERTC revenues.
• Recurring Revenue Growth for 2024: 15% increase, making up 96% of total revenues compared to 84% in 2023.
• Fourth Quarter Revenue: $30.8 million, a 17% increase from the prior year.
• Fourth Quarter Recurring Revenue Growth: 14% increase, with a 22% increase excluding ERTC revenues.
• Gross Margin for Fourth Quarter: 68%, unchanged from the prior year.
• Full-Year Gross Margin: Decreased to 69% from 72% in the prior year.
• Non-GAAP Gross Margin for Fourth Quarter: 73%, up from 72% in the prior year.
• Net Loss for Fourth Quarter: $3.2 million, compared to $3.6 million in the prior year.
• Net Loss for Full Year: $11.8 million, compared to $9.2 million in the prior year.
• EBITDA for Fourth Quarter: $3.4 million, up from $1.1 million in the prior year.
• Adjusted EBITDA for Fourth Quarter: $6.2 million, with a margin of 20% compared to 11% in the prior year.
• Cash and Cash Equivalents: $21.4 million at year-end.
• Debt: $12.7 million at year-end.
• 2025 Revenue Guidance: $134 million to $138 million, with EBITDA margins of 23% to 24%.
• First Quarter 2025 Revenue Guidance: $33 million to $35 million.
• First Quarter 2025 Adjusted EBITDA Guidance: $6 million to $7 million.

• Warning! GuruFocus has detected 3 Warning Signs with ASUR.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Asure Software Inc (NASDAQ:ASUR) reported a 17% increase in total revenue for 2024, excluding ERTC revenues.
• Recurring revenues grew by 15% in 2024, making up 96% of total revenues compared to 84% in 2023.
• The company successfully launched AsurePay, an innovative alternative to online banking, expected to enhance employer retention and attract new employees.
• Asure Software Inc (NASDAQ:ASUR) signed a multiyear agreement with a leading audit, tax, consulting, and advisory firm to resell its payroll and payroll tax management solutions.
• The company's sales efforts resulted in an 86% increase in new bookings compared to the previous year, with a strong contracted backlog growth of 17% since the third quarter earnings report.

Negative Points

• The net loss for the full year was $11.8 million, an increase from a $9.2 million loss in the prior year.
• Full-year gross margins decreased to 69% from 72% in the prior year period.
• The company faced challenges in its HR Compliance group related to ERTC upsell activity in 2023.
• Despite rate reductions, float revenue remained stable, indicating potential pressure on future revenue streams.
• An anticipated acquisition during the fourth quarter did not materialize, although it was replaced by two additional acquisitions in the first quarter.

Q & A Highlights

Q: How should we think about the progress on the pipeline for enterprise payroll tax opportunities in 2025? Are salespeople focused on ERTC fully productive in terms of enterprise payroll tax opportunities? A: Patrick Goepel, CEO, explained that Asure is making good progress with enterprise payroll tax opportunities, with several licensing deals and implementations underway. Eyal Goldstein, President, added that the payroll tax management team is well-prepared, with a strong marketing approach driving demand. The sales team has been upgraded post-ERTC, with specialized groups focusing on different solution sets to drive cross-sell opportunities.

Q: How important is it to close the credit facility for more M&A in 2025? Are you waiting to see how financing works out before pursuing more deals? A: John Pence, CFO, stated that the credit facility is crucial for accelerating the customer acquisition model. While Asure can fund acquisitions from cash flow, the facility would allow for faster growth. Patrick Goepel added that the facility provides flexibility for scale, aiming for $180 million to $200 million in revenue with 30% adjusted EBITDA margins.

Q: Can you comment on the demand environment amid current volatility? How has client hiring progressed this year? A: Patrick Goepel noted that despite media reports, Main Street continues to hire, with more jobs than people available. He highlighted a divide between white-collar and blue-collar job markets, with the latter remaining strong. Asure models a flat employment growth plan and sees no reason to deviate from it.

Q: Can you provide more details on the AsurePay introduction and its go-to-market strategy? A: Patrick Goepel shared that AsurePay currently has about 500 end clients, with plans to expand in the second quarter. The product offers an all-in-one card for earned wage access, banking, and debit card functions. Asure is testing the value proposition and expects high-margin revenue in the second half of the year.

Q: What are the key drivers for the 401(k) product's momentum, and how are small businesses adopting new plans? A: Patrick Goepel explained that the 401(k) product, launched in early 2024, has seen high interest. The company has learned to sell and implement the product effectively, with compliance and Secure 2.0 rules driving interest. Eyal Goldstein added that a dedicated retirement sales group is now in place, leading to increased unit sales and pipeline momentum.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.