Asure Software Inc ((ASUR)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Asure Software Inc’s recent earnings call painted a picture of optimism and strategic growth, despite some financial hurdles. The company reported strong revenue growth and strategic advancements, including new product launches and increased bookings. However, challenges such as increased net loss and a decline in EBITDA were also noted. Despite these hurdles, Asure remains optimistic about future growth and profitability, supported by a solid contracted backlog and strategic investments.
Strong Revenue Growth
First quarter revenues for Asure Software Inc reached $34.9 million, marking a 10% increase from the previous year. Excluding the Employee Retention Tax Credit (ERTC), revenues grew by an impressive 13%. This growth underscores the company’s ability to expand its market presence and capitalize on its strategic initiatives.
Increased New Bookings and Backlog
Asure reported a significant increase in new bookings, which rose by 45% compared to the prior year. Additionally, the contracted revenue backlog surged by 339% year-over-year to $82 million, providing a strong foundation for future revenue streams and reflecting the company’s successful sales strategies.
Successful Product Launches and Expansions
The company continues to innovate with its product offerings. The Payroll Tax Management product has gained momentum, launching new capabilities for Canadian companies. AsurePay is also witnessing positive trends, with over 70% of active card users utilizing the service more than three times per month, indicating strong customer engagement and satisfaction.
Improved Profitability Forecast
Looking ahead, Asure expects adjusted EBITDA margins of 23% to 24% for the full year 2025. This forecast suggests that the company anticipates continued profitability as revenue growth persists, highlighting the effectiveness of its strategic initiatives.
Positive Strategic Developments
In a move to bolster its growth strategy, Asure entered into a new $60 million credit facility. This financial maneuver is aimed at driving customer acquisition and potential acquisitions, aligning with the company’s long-term growth objectives.
Net Loss Increase
Despite the positive revenue growth, Asure reported a net loss of $2.4 million for the first quarter, compared to a net loss of $308,000 in the prior year. This increase in net loss highlights the financial challenges the company is facing amidst its growth efforts.
EBITDA Decline
EBITDA for the first quarter decreased to $4.1 million from $4.4 million in the prior year. This decline is indicative of the financial pressures the company is experiencing, although it remains committed to improving profitability in the future.
HR Compliance Revenue Depressed
The HR compliance segment remains depressed due to product attachment activity in 2023. However, Asure expects better performance in this area in the second half of 2025, suggesting a potential turnaround in this segment.
Slight Decline in Float Revenue
Float revenue experienced a slight decline due to rate reductions in the federal funds rate. However, this was mitigated by increases in average fund balances, demonstrating the company’s ability to adapt to changing financial conditions.
Forward-Looking Guidance
During the earnings call, Asure provided significant guidance regarding its financial outlook and strategic initiatives. The company reiterated its full-year 2025 revenue guidance of $134-$138 million, with adjusted EBITDA margins anticipated to be between 23% and 24%. Asure is investing in technology and sales infrastructure to support future revenue growth and cross-selling opportunities. The secured $60 million credit facility reflects its commitment to both organic and inorganic growth strategies.
In summary, Asure Software Inc’s earnings call revealed a company that is navigating financial challenges while strategically positioning itself for future growth. With strong revenue growth, successful product launches, and strategic investments, Asure remains optimistic about its prospects. Despite increased net loss and EBITDA decline, the company’s robust contracted backlog and forward-looking guidance provide confidence in its ability to achieve long-term profitability.