ASURE SOFTWARE INC Q4 FY2024 earnings call

• Executed well in 2024, delivering strong results with total revenue modestly up and recurring revenues growing. - Focused on replacing one-time ERTC revenues with recurring revenues via organic growth and acquisitions. - Added to product portfolio in 2024 including employee recruiting technology, benefit brokerage, 401(k), etc. - Launched SurePay, an innovative on-demand pay solution. - Made strides with acquisition strategy, acquiring payroll resellers, with pipeline for future deals robust. - Introduced Luna, the industry's first AI agent for payroll and HR. - Payroll units showed momentum in Q4 2024, and 401(k) product had strong business results. - Signed a multiyear agreement with an industry leader in audit, tax, consulting, and advisory services to resell payroll and payroll tax management solutions.

Total revenue in 2024 was $119.8 million. Excluding ERTC revenues, total revenues were up 17%. Recurring revenues for the full year 2024 grew 15% versus the prior year and increased to 96% of total revenues (up from 84% in 2023). Fourth quarter total revenues were $30.8 million, growing 17% y-o-y, with recurring revenue up 14%. The payroll tax management product was a strong driver, and recent acquisitions contributed to results.

• 2025 revenue guidance remains $134 to $138 million with EBITDA margins between 23% and 24%, excluding future acquisition contributions. - First quarter 2025 revenues estimated in the range of $33 million to $35 million, adjusted EBITDA between $6 million to $7 million. - Contracted backlog is $79 million, with about a third anticipated to be recognized in 2025. - Focus on accelerating cross-selling activity and growing customer acquisition activities.

• Potential impact of market volatility on demand. - Headwinds from ERTC in HR compliance group. - Uncertainties around credit facility negotiations affecting M&A plans. - Risks associated with timing and terms of definitive credit agreement negotiations.

Q: What was the bookings growth rate in Q4?

A: Q4 bookings growth was 28%, primarily in core business. Q2 and Q3 had bigger deals, with Q4 growth driven by core business momentum.

Q: Thoughts on the partnership with the tax and audit firm and ramp?

A: Excited about the partnership, with pursuits ongoing. Early days, but feel strong about deals and potential to extend reach, with more updates to come later.