The following is a summary of the Asure Software, Inc. (ASUR) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Asure Software reported Q3 2024 revenue of $29.3 million, flat year-over-year, impacted primarily by a $5 million reduction in non-recurring ERTC revenue.

• Recurring revenue constituted 98% of total revenue, increasing from 81% in the last year, indicative of a strategic shift towards more stable revenue sources.

• Updated 2024 revenue guidance is now $119 million to $121 million, with adjusted EBITDA margins forecasted between 18% and 19%. For 2025, revenue is projected to be between $134 million and $138 million, with adjusted EBITDA margins of 23% to 24%.

• Gross margin in Q3 was reported at 67%, a decline from 73% year-over-year. Adjusted EBITDA was $5.4 million, down from $6.2 million in the prior year, reflecting a 19% margin.

Business Progress:

• Asure has completed 12 acquisitions over the last year, adding approximately $15 million in annual recurring revenue (ARR).

• The company announced the integration of HireClick, enhancing their human capital management offerings particularly within applicant tracking to support client hiring programs.

• Launched AsurePay, a financial services product offering online banking alternatives including features like debit cards and paycheck advances, to improve employee retention and efficiency.

• A focus on technology integration and user experience is ongoing, with several product launches and enhancements such as 401(k) solutions and preventative healthcare for small businesses being key strategic moves.

Opportunities:

• Continuing to emphasize recurring revenue models, which are generally more stable and predictable, offering opportunities for growth.

• Strong sales bookings growth (141%) and an expanding product portfolio signal strong revenue potential moving forward.

• Strategic acquisitions continue to bolster Asure's product offerings and market presence, particularly in payroll and human capital management solutions.

Risks:

• Projected revenue being below initial expectations due to delays in the implementation of large enterprise tax deals, impacting the timing of revenue recognition.

• The variability and shift in revenue composition could influence future profitability and cash flow stability if not managed effectively.

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