Asure Software, Inc. Q3 FY2025 earnings call

• Third quarter revenues were strong at $36.3 million, with broad-based growth across product lines like payroll, benefits, etc. - Acquisition of Lathem Time is performing well, with plans to achieve revenue and cost synergies over 12 months. - Launched Asure Central, a new client interface aiming to enhance client experience and drive cross-selling. - Cross-selling efforts showed good results with attach rates moving higher sequentially. - Continued investment in technology and product offerings to drive revenue growth and profitability.

Third quarter revenues were $36.3 million, a 24% increase versus the prior year third quarter. Recurring revenues for the third quarter grew 11% versus the prior year to $31.8 million. Professional services and hardware revenue was $4.4 million in the quarter compared to $700,000 in the third quarter of last year. Organic growth improved sequentially to approximately 4% in the third quarter compared to 1% in the second quarter, with organic growth excluding HRC ERTC-related churn at 7% in Q3 versus 5% in Q2.

• Fourth quarter 2025 revenues expected in the range of $38 million to $40 million, adjusted EBITDA between $10 million and $12 million. - Full year 2025 revenue between $139 million to $141 million, adjusted EBITDA margins 22% to 23%. - 2026 revenue expected between $158 million and $162 million, adjusted EBITDA margins 23% to 25%. - Believes in potential GAAP profitability in 2025 Q4 and 2026, with medium-term plan of $180M-$200M revenue and adjusted EBITDA margins over 30%.

Q: Joshua Reilly with Needham & Co. asked about 2026 outlook, traditional organic growth, enhanced organic growth, and balance sheet for reseller acquisitions.

A: John Pence and Pat Goepel responded discussing organic growth inflection point, balance sheet being in good shape, and no extraordinary enhanced organic growth modeled yet but being opportunistic with acquisitions.

Q: Bryan Bergin with TD Cowen's Jared Levine asked about sales cycles, pipeline views, and 7% organic growth assumed for FY '26.

A: Patrick Goepel responded saying sales cycles in small business mostly quick, pipeline looks strong, and 7% organic growth due to solution offering and Asure Central driving cross-selling.

Q: Eric Martinuzzi with Lake Street asked about Lathem Time's revenue contribution and hardware sales.

A: John Pence and Patrick Goepel responded discussing Lathem's revenue contribution and integration progress, with recurring revenue from Lathem expected and hardware sales velocity being a factor.

Q: Richard Baldry with ROTH Capital Partners asked about Asure Central's impact on legacy tech costs and underlying drivers of organic growth.

A: Patrick Goepel responded talking about cost savings from legacy tech, and organic growth driven by attach rates, sales and marketing investment, and technology integration.

Q: Greg Gibas with Northland Securities asked about attach rate trends and integration plans with Lathem Time.

A: John Pence and Patrick Goepel responded discussing attach rate sequential improvement and integration plans like the AsurePay card integration.

Q: Alexander Neumann with Stephens asked about Asure Central's differences and competitive uplift.

A: Patrick Goepel responded talking about Asure Central driving cross-selling and revenue opportunity, with plans to see ARPU upticks in 2026.