Asure Software, Inc. Q1 FY2026 earnings call

• Strong first quarter 2026 revenues with 23% growth. Organic growth rate was 7%, up from 3% in Q1 2025. - Assure Central adoption rapid, with majority of ~30,000 direct clients expected to be on the platform by end of Q2 2026. - AssureWorks introduced, scaling thoughtfully with positive reception, 6 sales reps dedicated, plan to add more. - New bookings and core human capital management payroll up 13% year-over-year, contracted backlog healthy at ~$85.6 million. - AI is a meaningful accelerator, Luna AI adopted by >15% of potential users, interactions increased, automating compliance workflows. - Sales force on track toward 150 reps, focusing on new logo acquisition and multi-product cross-sell.

First quarter revenues were $42.8 million, up 23% year-over-year. Recurring revenue was $37.8 million, up over 14% year-over-year, representing approximately 88% of total revenue. Professional services and hardware revenue was $5 million, up from $1.7 million in Q1 2025. Growth profit was $30.5 million, up from $24.6 million. Non-GAAP gross margin was 76%, up from 75%. Net income was $0.6 million, compared to a net loss of $2.4 million. EBITDA was $9.4 million, up from $4.1 million. Adjusted EBITDA was $12.3 million, up 69% year-over-year with a margin of 29%, up from 21%.

• Full year 2026 revenue guidance: $159 million to $163 million, adjusted EBITDA margin 23% to 25%. - Q2 2026 revenue guidance: $36 million to $38 million, adjusted EBITDA $6 to $8 million. - Expect to generate positive unlevered free cash flow in mid to high teens range.

Q: On Assure Central, what are observations on adoption path as people get single sign-on and exposed to more products?

A: Pleased with adoption, tax rates up 15% year-over-year, Assure Works introduced, acquisition of Latham undergoing Assure Central with rollout in second quarter.

Q: On expanding PEPM, where are we and thoughts?

A: Internal goal to get from 2 products to 4 or more, in area $12 to $15 per employee per month, optimistic for double over next two to three years.

Q: On forms growth and Latham transition, how is it?

A: No headwind in forms growth now, Latham transition early stages, back half of year and next year to be earnest in converting to Haas model.

Q: On managed service offerings, revenue opportunity and PEPM uplift?

A: Excited about AssureWorks, see opportunity of ~$50 per employee per month, more of a 27, 28 initiative with revenue opportunity in this year.

Q: On Latham folks on Assure Central and sales reps target?

A: Large majority of Latham customers will be on Assure Central, on target for 150 sales reps by end of year, choosing quality candidates.

Q: On accelerating to double-digit organic growth and AI use deployment?

A: Attach rate numbers positive, AI used all throughout organization, helping in various areas like financial, operations, sales, marketing.

Q: On pace of organic growth and professional services/hardware go-forward?

A: Midpoint of guide implies ~15% full year growth, professional services and hardware will normalize to high 90% recurring.

Q: On client base health and organic growth distribution?

A: Client base cautiously optimistic, organic growth this quarter broadly distributed with majority growth on ACM platform side.