ASUR - Earnings call 3 2023 | Asure Software, Inc.

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Operator

Greetings. Welcome to the Asure Software's Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I'll now turn the conference over to Patrick [indiscernible], Vice President, Patrick, you may now begin your presentation.

Unknown Executive

Thank you, operator. thank Earnings joining Call. and Third for everyone, XXXX Quarter afternoon, you us for Asure's Good

on and Following released investor.asuresoftware.com, presentation. The available . our close where financial SEC's the of find results. earnings the you can release the website Investor Relations our market, also we the at website investor is

of During we the useful timing be and found exclude items believe impact description release. today, certain these to to will The comparable earnings GAAP non-GAAP reference a non-GAAP we call measures with to our financial can which items. of reconciliation be measures, along measures our most investors in and of their

will forward-looking our filings and on cause expects, encourage such call to as factors review contain involve statements. refer you and could to to use expectations. that future our as differ to may additional and words Today's believes events for information current that we materially results from indicate forward-looking some also with statements such, risks. SEC the actual We

over the Relations a but take moment just will folks I hand a in to to to some Pat upcoming want activities. remind of Investor moment I call

Conference be conference We SaaS the attending Technology meetings. the XXth Annual in be Cowen November New attending Craig-Hallum New Virtual York. will plus in TD in Select one-on-one Needham York, XX, one-on-one Conference conference. will with will XX, XXth the November virtual On HCM we we participating XX, participating MKM November in tomorrow, be Roth on Alpha the And Annual

to on to those make and to important we investors. outreach November use I meeting is assure, efforts a split very connect to in that can The would request. to sure investors' squad both will like our us all management events Investor cover assist thank team accommodate to all XX

to of will our the recorded. I available is section to that, I would CEO. available Investor be website. the to link on that turn Goepel, like It remind this via Finally, being call Chairman Relations now would like Pat replay and over made everyone call With for the Pat?

Patrick Goepel

everyone, business and I'm welcome, by a John Patrick, we'll plus XXXX. and joined remainder and our our for provide call XXXX for for quarter Third Pence, the you, the our Quarter Thank Earnings update Asure CFO, to on Call. outlook XXXX this of guidance Software's

Following we'll questions. our to your remarks, answer available be

execution from our momentum see, can continued with results, quarter business. you strong third As solid in our across reported strength coming the the from

in was ERTC almost year were the our and XX% the revenue which and grew Our versus the again once quarter was versus revenues driven entirely by organic. XX% period, the Recurring prior million by third revenue $X.X nonrecurring versus growth year prior up year revenues period, strength. prior and period,

we updated which We gave more to once today's ERTC detail release. will discuss our we guidance, get in press on

revenues, and revenues Our business the marketplace both that compliance year and very strong versus our revenues we're it these quarter Over believe HR Asure for plus Marketplace excited can the as total prior the a of showed period, business XX% the future compliance very about we become is the Asure business. growth time, high-margin lines. is during and HR

benefited investable Additionally, balances. able accounts, were the yield and from in rise interest the revenues bank benefit plus curve, drives higher in the to which contributed to growth we the consolidation quarter from of

had offer short the small time participation ago sales our We expect we a mandated to through approximately additions. have XXX(k) XXX(k) plans to to the funding traditionally the setup drive thus Government as technology has This with employee set they plan. launching continue partnerships such and businesses, providing was XXX(k) of reception particular products in far retirement more we to our The businesses received Many the been not bundling up the very the and launched initiative to need enthusiastic. plans Secure have need on advancing the employer-based solutions, resources new initiatives of strategic to Act mandates. the states leading build and payroll client our momentum have increase while aims States United retirement by assure funding X.X as for similar employers to XX and solutions, pass but retirement and do plans U.S. small so by

year. and sales driving sales new with is the and digital We've the during been in and a we produced efforts the level supporting increase force very above in sales year delivered over third expanded sales of efforts quality the new with productivity quarter our bookings of sales we leads the higher in pleased which our marketing, hires made. XXXX. We're XX% XX% increase Our last

our Based our any to for to we're ERTC fourth be $XX $XX range revenues excludes expectations filings. and the in quarter guiding which on potential from performance of million current revenues million,

We margins of XXXX $XXX range and our are expecting with million million, EBITDA revenues XX% between in be of to to XX%. the $XXX

any does also contributions guidance from include potential 'XX filings, our in excludes ERTC acquisitions resume to plans but Our earnest.

a many clamp of bad the in on you As down are claims IRS the on some the actors were have that RTC filed. should aware, claims, back pause of which been plays filing processing not to September

they refer if as to credit. advisers only, their for clients Assure see ERTC of to our processor we a qualify claims the and tax

expect the to weigh resumed. and IRS likely program the be will continue clarification We further from

we RTC to uncertainty, the be going the revenue given conservative in our However, on forward. want assumptions

financial in it like to discuss results to I Now hand to detail. John off John? more would our

John Pence

Thanks, Pat.

beginning basis. the financial of at or this figures the several mentioned discussed call, on given Patrick today are adjusted As non-GAAP of a

Investor are these of in was earlier our available investor that reconciliations You themselves the made will of find section recent also at release non-GAAP presentation posted Relations most Reconciliations website. in today. description included in earnings GAAP to our the a investor.asuresoftware.com.

quarter year to XX% to the in rose Recurring prior to the Now to period quarter $XX rising million. third prior on revenues by Revenue XX% million third $XX.X relative reached period. results. relative year

the exceeding $XXX the our strength the second and interest in of on in -- HR average compliance revenues revenues balance marketplace asure recurring Third grew the quarter. client solutions, million quarter with increased

an were period. was ERTC $X.X rose quarter year's year Nonrecurring for revenues loss Gross category activity. recorded revenues million, services, and million over $X.X processing XX hardware of Net of to the percentage current prior and on quarter points period. relative by the saw third prior $X.X a increase strength ERTC million third in million. of XX% the professional other the the $X.X loss improvement margins the to prior in in

points percentage gross XX%. margin X non-GAAP While rose to

EBITDA million, the the XX% the compared from and in reached million, year in EBITDA was prior year quarter for X% quarter rose relative the margin with adjusted year Adjusted period. to $X.X EBITDA $X.X prior up prior million period. by to $X.X million $X our

our high-margin growth. expansion streams, offset with Margin gains was initiatives benefits marketing our we progress sales driven revenue investments by and the are scale than our and activities. more and These continued the making of growing efficiency expansion from

over believe margin substantial longer the upside scales. there to as continue is business We the term

We cash ended and $XX.X the quarter with of cash equivalents million.

we quarter, net an million. the $XX raise capital of completed proceeds for equity During

inorganically. as growth stated to We which enhances had strategy which financial off we double-digit to also $XX.X revenue execute by accretive Assure's our hatches This and paid had -- is million, and capital. flow we increase with payoff cash both flexibility earnings organically deliver growing structural substantially

the fourth guidance, Now in XXXX. quarter of XXXX, terms for

million $XX quarter would year-over-year. XX% be of anticipated at EBITDA equate the the million range to year fourth margins $XXX be million. full guiding are to million, quarter $X growth the of for which to be with $X is Adjusted the ] range range between $XXX million for in are We [ to to to revenues still to midpoint $XX fourth Revenues the XX% the million expected XX%. between to XXXX EBITDA in of

Moving on guidance. XXXX to the

in with XX%. EBITDA of range $XXX XX% to of between We to expect revenues $XXX to be million. margins the adjusted million

mentioned Pat guidance new revenues. of contribution earlier, these acquisitions. assume resumption comments any in his As But exclude a figures from of ERTC each

on from the September. waiting more claims will some the application with conservative pause in We that IRS We feel stringent. modifications processing the approach. placed to are program best clarification resume that process for is more that we being the make And believe was further

contribute revenues will XXXX. there's And that in so to possibility a ERTC

from strong Assure going well our [indiscernible] The XXX(k) and all solution Marketplace are as our HR contributors newly introduced expected forward. being continue growth compliance, as revenues to

management as tax being large service the goal to as with offered a platform product HCM shots multiple vendors. well payroll our Additionally, on enterprises as has

growth While drive methods. the we feel expect above are acquiring mentioned that businesses also through strong contributors to inorganic our growth, to attractive. we By are

have a the debt Our which growth be going to profitable raise payoff, will flexibility inorganic, resume and the and mix profile making of forward we recent both acquisitions. organic capital with smart

are confidence sales. forward-looking and third the in on we This of our product with momentum we conclusion, us strength In have our the guidance. performance in built development, technology and pleased the gives quarter

and business driving drive are call and looking we for We remainder as closing the leveraging turn about are breakout in value. to to will remarks. XXXX I to growth growth potentially back sure shareholder year the implemented have Pat of the excited across creating With the that, forward and XXXX for initiatives sustainable profitable

Patrick Goepel

in to achieved core to John. a value growth creating enabling positive quarter, achieving growth. continue revenue our them them our make businesses. growth by for as for focus on our reception it to Thanks, difference this technologies products deliver in the third to pleased investing We're We XX% by and that gratifying clients see the their we're clients. tells to It's us really and solutions

longer expected is term. to there's our results just more to been is contribution come. date to for getting marketplace to lots meaningful its overall Assure to growth the and have contribute performance, and our rolling

plans, expect X.X mandates more mentioned, previously small to I gives XXX(k) well. and states implement to many As now, funding the mandating Secure the are businesses pass we they as Act need which

thus bundling sales an recent into got and effort. reception has payroll it's that with days in only far, Our early XXX(k) initiative enthusiastic

navigate our internal for complexity who as to increasingly can continue with We day HR supplement seek day. doing anticipate capabilities be solutions healthy increasing businesses help to the their also compliance them business will external of demand to experts

in which the expectations in combination reflect our of quarter Our growth, will growth. inorganic XXXX, continued and both delivered guidance be a organic with for fourth

which scaled, focused to future cost XXXX, for we've as the is the as structure. the continued margins we in force XXXX. we invested business Our rightsized improving In the improve and success and sales the as now business improve the as marketing on have expanded feel across efficiency well we have has initiatives, enter business, helps

management capital grow businesses Human management large Thank remarks. continue solution We'll enterprises tax and provide capital to small to base agent streamlined the their listening you providers for helps that prepared thrive. compliance. innovative

session. send that, Q&A I will the call the operator for to So back the Operator? with

Operator

from Thank a [Operator of conducting Company. is you. And Instructions] At Joshua & we'll first question line Needham the Reilly this with time, our be question-and-answer session.

Joshua Reilly

possible nice you've Can you outcomes flow here. with about maybe regards to guess understand the that of and here A ramifications on accounting in you're for XXXX right. in the the starting dejour more guidance help color these included job how quarter. topic thinking with impacts I the All you us execution preparing expectations? off release. the claims range in and ERTC some cash submitted already highlighted that the that press on maybe in how And

John Pence

to first add Yes. can and Josh, it. Pat I'll a shot take then

little We have Receivable terms the balance obviously IRS in to September. since a coming cash quarter-over-quarter. of a clients is from seen slowdown bit of our in and down actually

did Dal So on ERTC ] the we had prior good monies the [ of least quarter collecting third recognized a in at for that some job claims.

guidance. trying to be I regard with pretty to -- a our think we're clear As

$XX For million. any of in the guided the included terms fourth to numbers revenue to in quarter, that revenue we $XX of we've million not

-- we includes no for And revenues. terms quarter then that revenues also of to ERTC again, the for in incremental XXX XXX XXXX, gave fourth guide

we that it's going get to turned Now on. think back

get on. So of sort terms account upside of into there'll but kind because that going of we But kind guidance, it of that's to at the uncertainty some turned want of back didn't on going is how take played to it's in near it's to this just get term we in it and point. to how potentially be the turned

Patrick Goepel

a typo that. make guidance out our $XXX would million said -- I We'll say just to We was in press to that release, as I want possible. correction there, point the verbally and there it's to quick of $X.XX $X.XX a Yes. million. $XXX couple things. as was One,

regulation. we we we the to turn the do clients process far and with ambiguity numbers resumes, their are guys, the conservative guidance and CRTC, and we that we're to it take will As IRS as if we'll the very going so wait said, that of a we get And being program there probably that for was follow as know That out queue according guidance to to stance. but no our is behalf the and on paperwork of believe filing in and we'll when on, want it. our take the IRS

John Pence

Yes, and fourth quarter on the a point to guidance. little put bit

about of $XX $X of think quarter, nonrecurring $X If was line. the approximately ERCC, without in last there the you fourth roughly million $X last million year. and in was recurring we were million year, it million fourth quarter in

looking the to So XX $XX at $XX we're a kind million million guidance. $ relative to million of

growth. the So we think is the that kind midpoint mid-teens of of in

So kind is what to we're prior for we terms it's exclude growth in of guiding RTC. XX% from XX% quarter-over-quarter year of when

compare. So people on going guide, out is -- out year to taken compare that's take we that's if real often I that to get think want the we're kind of focus the as of prior it we the a

of a story. a feel so it's like but little we pretty is it growth, bit muddy healthy And a

Joshua Reilly

guidance. the then Got it. on QX follow-up just And another

sequentially, implied But little would loss it us with Maybe kind help the lower you of XX% of that XX% from If you the leverage at it's EBITDA probably would revenue. to you ERTC margin, range. bit in bounce of expect look can down as the adjusted XXXX, a back? why

John Pence

we're the I million in the XX% a where business, our is guidance that breaks, So should think was year, It's This million think $XXX $XXX been 'XX the generate be the XX% adjusted we revenue scaled EBITDA total in we again, messaging. $XXX guide, XX% revenue XX% year kind producing that, million at to million. that think pretty in that's in for adjusted for this EBITDA, adjusted to I revenue guidance think, we've consistent, of after we EBITDA. and right? to I $XXX company. think, breaks, to back We

It's the absolute of really composition key. the absolute revenues. So the the of number, is amount the revenue not

as And think the numbers, so into in adjusted lower we a bit back produce the getting that of RPC that that we size, But a fourth impact in of quarter revenues that amount result we're little with gets as in that revenue. decline can revenue absolute EBITDA. of

Patrick Goepel

we was to X ERTC so replacing expand think Yes. to in we want Clearly, decisions months the potentially aggressive knew wanted force to sales more where TC didn't ahead a happen raise know summertime, to footnote at with do if ERTC And know to just Josh, the and in we XXX. get about your We as time make we going going to we the to a of, cases, quickly. revenue, of go. that, we're many you

area. So filing. was our investments summer. The the make we changed. have path we to investments over hasn't fourth that made the planned made We've quarter, in all that salespeople technology tax investments in And started in

investments But a was XX, continue fourth ERTC paused play the or EBITDA. on and is with rate halted in really and did we that September ability that. pressure the off what temporarily When on those what did put has to happy quarter the little

the $XXX steps revenue million to called back to very is as million, out EBITDA mentioned, we've get it scale so of back as And because numbers nicely that business. a ERTC. we've $XXX that And John that we now taken the

Operator

is from the Bergin with TD question Cowen. Bryan Next of line

Bryan Bergin

the you middle an just appreciate I initial here, providing the uncertainty. outlook 'XX of

the the calendar we recurring be pressure outlook, to As and from what a and the unpack rate that try turn revenue combined growth in 'XX? you give will can you sense an grow-over ERTC implied 'XX as of float the apples-to-apples from 'XX us

John Pence

Yes.

a of I flattish. think lot. float shouldn't kind It perspective, from have my should be

this the grow it's the X over. In roughly we first $XX ERPC million that have terms of for months year, to

of what kind we're exiting at can of probably in XXX, and million recurring you XXX-ish year revenue we're $XX terms the ERTC, revenues. in guide about this that doing So think

to and we're XX% year. million, remarks, just a both growth talking XX% next $XXX that's combination we prepared made really a is be to our think million inorganic. $XXX of -- to and I point in that so to Again, And the clear organic going

in more putting do raise work, we've some some to and year. started of So to the that going of we're money next

kind been think pack I over consistent an years, the be organic pretty we've model of grower with been right? we've about expect that. higher on It's over to and pretty It's So time. we talking the transparent organic the

Patrick Goepel

I'd Yes. million $XXX XX% second And is over only and you Brian, then about if mentioned about that a quarter, who repetitive think John the is thing say, so if you the or little growth. think

repetitive Float good tough compares growth why compares. we growth of TC about around adding this that of really a XX%. think rate. we've to headwinds position that tuck-in that the as execute, X% we we we're be little about the continued the the the as far a you flow. of feel built headwind a bit did why it. would to lapping year that's feel about marketplace momentum But kind unique be float, been might in in a compares the and If that and may you the business, on have then headwind to or last and lapping And sales But organic we close that's and the on NIM so well motion revenue. the the as can with acquisitions in as

Bryan Bergin

Okay.

That even makes view? the inorganic, you that long-term the I as kind as according growth, -- relatively about And about 'XX is organic think sense. you Okay. the strategy guess, to think mixed it of as

John Pence

lumpy, perfectly I It's It linear. right? so. will be think not

about up mix while I with you're So XXX% in never of it, when an a it's both. healthy to line -- once going think it's even. think spike But Because acquisition. it do pretty see this you'll a I

Patrick Goepel

really growth. have And organic Yes. good we double-digit visibility to

of pipeline some One is we growth, the to have like raise inorganic with aggressive did reasons So pent-up we of and the we a get we want we will feel demand.

revenue there's certainty might it be lumpy, on going while the good pretty forward. So

Bryan Bergin

on just trended more if And client employment squeeze just levels one the quarter? in could Okay. in. Can I comment Very how good. you

Patrick Goepel

a collar they Really about -- But the than that would we've had on industries is in the of trades higher jobs end. The even I employment. and of would get say or certain there people. small businesses some hired there in a technology business, pressure recession, the even the enough But the and end restaurants the and of What today. and that people mixture more pressure little would areas, small blue still say and say of it's there's flat. I are cannot bit a I have get higher interesting, white people collar some area areas can't employment is around

hiring about an been seasonally, want get bit a a of hire So we has on. there have . the And flat. overall to But would maybe they expected there's can little if employees clearly, increase. more

Operator

the of with question from MKM. Richard line Next is Roth Baldry

Richard Baldry

look the talk quarter, of a 'XX. and on more factored on terms seeing lot dilution? characteristics And the M&A around levels took How in what to Are for then sellers the what or action and cash less trying any of structures side, down be sort we interest And kind maybe focus it given about of in think really on? debt you debt then Can pipeline of reasonableness do we you're in looking that a the that. lot of to are on be when terms to Would seems for it? take forward, you about sort and just stock? you equity

Patrick Goepel

lot Rich, in questions Yes, question. a of that

the as pretty environment the But tough. small payroll So environment about, well. company, is jump of John unpack will first think and in I of I'll when all, try to business

our of First stopped lending. have regional banks all,

and et payroll So AML is KYC, licenses, is regulated is laundering, more general, customer, the getting by is BML, which state near cetera. transmitter Two, capital in concern. access the to #X anti-money money which more industry,

if up the time cases, some requiring changing businesses legislatively. tough capital tough up get. have are that ACA, with tough of the And are keeping a They They with small time So to tough keeping of laws. debt up levels a a landscape keeping to are tough have some needed. have time fund, of the especially banks deposits in

often, like also for through, time the what So you grow a business different we're they're when at going for and they say logical they rates and them. look up, going very interest is to a going that might I be think what strategy and how strategy they're exit backdrop exit what counter would this looking is their in point about to

the we've telegraph believe partners put our couple had times, have many we couple a trusted last years an that conversation times a In do year, with in acquisition and our we subsequent the over So already, can October extension a get We did you of of we we of with pipeline. we a resellers queue. early some on. as that get

about the people a down starting then as they're reasonable the recession in far feel potentially are pull a multiples economy. multiples, are to As or And potentially in that worried given the and backdrop. slowing

continue So we to right think grow. it's the to time

we've of then volume. And to calling been improve over XX% margin and a scale the and about we've and the initiatives line the last ready us, for to handle out. we're really that operational business. technology grow this It's done purposeful here, couple growing business of years. that kind bottom

And preparation the good to so feel many and here. has us a catalyst aggressive well that. ERTC and of as luck go a meeting it's to be in cases, We opportunity. pausing time do given is really

as lending how or we And of cash then your or as three of around it. those some have think about far are question So for the us, last we things levers. stock,

cash. have We

note, perspective, that have when we us us to it the at which a a to node, important we And add us because feel acquisition protects long it's only on a stock. seller term if We indemnification. and stock value could low-cost it's look from

be will But reasonable a that and ability We $XX have market it to cash more the million acquisitions. lending think feel is. the have over also we little do we make some than in over time

continue a But and add. stock loan model. low-cost be of could we indemnification some that's that to cash kind a lever our So will of

Richard Baldry

maybe back flipping organic. to And

bookings up, on I You it of was increase posted in year $XX XX% ago. think top a

to continue really can think to is more to do try average to you or on tenure capacity feel sort like about left, talked your now. organic focus grow? head you have keep count the generally you You what's utilization growth up of adding just Or you

John Pence

we from the them XXX that going Yes. people to successful. the and the have at of done they've Thanks, a are we're going We're put is athletes reasons summit for to to are good been get that go Rich. we people And over together, really summit job record have adding number we've good, One also I'll us to successful. into people XXX. of that's and and really hiring And they've of sales the say we mentoring bringing XX% would adding what reps to to been training have The been has organization. able call, attract successful assure program that we a of the culture a

down be to going grow. to continue there's So no slowing of

then not starting almost the get here, and believe also to model more invest quality to more gross new years last talent, get to add more. we you dollars of people line. margins And want we're the we've as productivity, margins from doubled of that but the new we our look and bottom adds the at scale, we improved couple And then because as the only only people not the in that add but

a to strong to be do And able it. position in about it's but feel fortunate to really multiyear commitment, we a So be we're that.

Operator

with is Stifel. Brad question of Reback from next Our line the

Brad Reback

is acquisitions to correct back to about in to heading million. is the the very $XX Great. it $XXX commentary, million assume Thanks million much. $XXX guide. from million to your From $XX XXXX,

John Pence

Yes.

Brad Reback

trends And for that Great. 'XX... modeling you're employment the

John Pence

flat We not assumed our employees down. are It's taken stay We've 'XX. anything . going for flat. just relatively to

Operator

line next The from Jeffrey of is Van question Craig Rhee Hallum. with the

Jeff Van Rhee

there put Any the A on the bookings, on little Secure that just [ about early be little it exclude Can If growth or it, omf maybe XX% what And helpful. then ERTC? does that? was Act, behind includes the in ERTC. talked Pat, quantification, a you color you more the ] traction. include would

Patrick Goepel

Yes.

Just a of couple things.

your question, I that apologize, around of again. First -- all, say first was Jeff,

Jeff Van Rhee

Secure to said a... The off you Act, you're

Patrick Goepel

to do . That also forms And go you of X scale like the continue Secure to retirement access a Act. XX to payroll And don't but that save been years pretty now is compliance. to XX, sexual HR compliance I'm over area we Secure of be whether to with there begun will social funding. we from ETC, a require about XXX(k) not put the sorry. what what to plan. security in towards set it we it's still over our a and addition skilled it, in get social our it we're pivot perspective at. that pause over wage out applied our provide And we've taxes, funding future X.X people around mask X.X already Shortly with we Americans that create XXX(k) challenged the goes data has years. plan, matches. that the that X.X program the today think Secure it's with it, training already There's will after also X,XXX and Act, September the in many has offering is visible. those to the the on driven. compliance Act, have really sit and arrestment, that for is starting those don't tax wage, going provide credits And anticipate on And some to know already, government up adopted payroll, XXX(k) security, states funding independence and by states employer about be already plan, that's And our the and if has our which we're is with codes. minimum compliance, deduction

JPMorgan our in partnered which have around another company with those those So plans. Chase, we're we're We're with states management system. prospects and which mandatory partnered clients is they going XXX(k) after also the excited with on Vestel, to partner treasury

XX% a And sell like a plants we've year. little way. I fourth been high, quarter. around big going interest due month. in qualified year, to here so the in something really, XX-plus leads be surprised We're in in probably have I XXX(k) visibility doing the already anticipate marketing bit beat leads, do here to level over The the only wouldn't this that. that this we'll we we're qualified if plants next and really go sales XXX and a over we after

excited pretty are people So about program. the

As sales the far numbers as XX%.

a bigger with and ERTC, are ERTC we'll do reporting some book also ERTC, forward, we'll be product. a client of some a if have deal, ERPC, will the bookings But XX%, We without we'll in breakout on it current start current with ex the we stand-alone do going ARR definition we'll -- bigger breakout say, largely of provide the and is provide suffice because X% a really more ERTC that. of to than ERCC get -- have It have RTC because of for ARR XX% nuance of kind to an future not the we'll of kind did that event is ERTC. number you include a which quarters onetime it is in packaged bookings itself, in what more on booked ARR did in was implicit the top the event. but of and ARR, and in we breakout

Jeff Van Rhee

on And would or question. might gross Great. it right. the be All And around precise And what more margin, first Okay. bounds did my last marketplace, That's John. as ramp thoughts then any expected? for it 'XX. do

QX? Just should about what's we how -- think margin for gross

John Pence

Do to first? have you want

Patrick Goepel

I'll Yes, go Yes. first in marketplace. the

separate marketplace Secure the out some were and we with at we with X.X, really XXX(k), of a all, category of payroll. of big marketplace First evident category pulled the it looking

to be this So are perhaps do going lending announced need from past stay as banks. marketplace the that small businesses Lendio that marketplace, initiative huge going We quarter regional it's the options but will in forward. a

fulsome of good We'll following of quarter into is update and first the and as marketplace. now very provide The a on momentum we a lot Equifax more speak one. quarter working well because the the we got that will has year. that relationship fourth building partners across the be into So gone right we're a

to marketplace and going same lap we're going compares tougher the the we're as of take suffice And token, excited take starting to we're a it. we'll that to by some But say, out marketplace. and grow the then pretty category, about to full XXX(k),

is Just pretty going the cause we to traction be high think pretty quickly. level

John Pence

X that with I think the in would kind think way it. quarters. quarter goods cost I just goods I to believe previous be line margins, of On the be sold about would about sold. of fourth cost of the say would

think X%. if blend, you a like take So we did X.X%, I X.X%,

in right, it's somewhere X%. range, X.X% So be to and between going that

about a margin to that's based sold. think gets on just cost it. I that generate fair the . And gross will revenue that the way So think

Operator

Our is next Lake from the Street. Eric question of with Martinuzzi line

Eric Martinuzzi

Yes.

months ETRC. you the and us I'm QX contribution? revenue us You can X QX the gave curious, the on give

John Pence

Yes.

you're about this So year? talking

Eric Martinuzzi

Yes.

John Pence

going million from believe, $X Yes, I first and then out second I'm of quarter. and notes about $X dig in memory, million quarter it in million quarter the $X it here, this the I roughly, can but was my

on total of a that's million. So memory. $XX Test my

Patrick Goepel

revenue or onetime QX, a a of was services revenue And professional majority of QX, the in it vast ERTC. lot

Eric Martinuzzi

Okay.

any QX there So in but... QX, there recurring I was revenue and in QX? know was

John Pence

grand QX. been early I of in yes, that hundred But this a recurring worked was we think it it it couple a contract contract might that to there QX we going it. of as changed in a and was we had -- look have year modified like

Eric Martinuzzi

Got you...

Patrick Goepel

quarter fourth the about ERTC had, -- of the the The in that we was big the reoccurring tune to million. $X quarter real

contract, but RTC is majority in change we vast in QX, the that a that bled might have As of of the professional hundred been the line. services couple thousand in there

Eric Martinuzzi

remarks. that $X And your from I million Okay. said had $X.X QX, you Is have but there? I John, -- prepared did million for

John Pence

I That's believe. an increase year-over-year,

I last did we So QX in $X.X think of year. million

$X.X increment, X absolute. million the So an is just

Eric Martinuzzi

headcount, question. are know targeting XXX you're by now? we last year-end. The sales then And I Where . Okay.

Patrick Goepel

million. About $XXX $XXX million or

, Let's say, we where so as that's have today, to commitments I million of at. think, we're $XXX

Operator

Research. of the with line Vincent from Colicchio Barrington are questions Next

Vincent Colicchio

Yes. slightly curious, it a in say the good productivity in your Pat, all expectations I all, meet sales quarter? behind, was would I'm did quarter? but direct

Patrick Goepel

little already and cycle Obviously, September we X.X. a token, same pivoting just sales pivoting caused disruption. of By through and IRS RTC understanding the and bit on when were secured working well way caused it the our XX, the on to

in we a the going very in excited last maybe the all have We the with of But We've So pleased all, in couple pleased think pipeline and about right that and QX. with pretty leaders and right and quarter. sales very place into staff the were area. the been weeks people organization. we the

that pleased. change maybe So all, all we was management. But had a . I very blip we had, some in

Vincent Colicchio

the And in environment, particularly any pricing? interested changes competitive in

Patrick Goepel

I all, you, that we how how ARR it. clients. we think companies pleased And have and would mean I focused customer I'm tell we tough. and on we're of I we with, get is very in getting No. after and revenue, compete get a repetitive position good first we

which And compliance broader than and our legislation. some our winning valuable important. especially with value we're propositions respects, clients and think in is around share, I that we're getting to are competitors more that probably

and the In that sales are. if about block But stuff. and are bullish feel see good recession you're environment or you depending where of we out tough not, a I people, in all really where kind we it's a general, noise. So

getting have that talking excited energized salespeople and business. that a robust. feel And of is our very We because they're going proposition way. we get And and stay successful our they're to very, share I to value

Operator

Our Securities. next Greg Gibas with the question of is line from Northland

Gregory Gibas

if versus follow to maybe other did in And XXXX next what how assumptions much with contribute out reflecting you on wanted not I guidance, from could guidance. occurring up uncertainty? year ERTC that take revenue excluded? Like

John Pence

I think recurring. running that tell, don't how pretty We [indiscernible] clip, of 'XX as you ERPC into nonrecurring speculative. keep be of know of the clip majority going 'XX. is for forecasted were could the amount kind that could not historically. going a at We've what I at nice guidance to that we're much it

would guide, that year. X of But it recurring. what on said ask the the all based So probably question didn't I million current think looks so in if to all going ago, maybe assumes the guidance. being now for $XXX $XXX $XX again, like I first answer you your have that million almost to we or why just don't I or me were that million months to maybe question, the know But the that's put uncertainty. X

Patrick Goepel

Yes. even ERTC, million around in or that. Greg, we're last professional year, if just look if somewhere past services you numbers so X.X through our

and quarter. that's -- So a

straight maybe to to million million million number this you $X a that that's $X going if into I year bit. program change $X say, The million had coming is saying I summer or the $XX over to it was replace ERTC. include on a to is line let's want So to of professional mentally, services.

around more actually that we vendors, be and a is support I I be of cetera. had would there'll quality which what that's to think think because thinking that stringent, it's flight et we I But kind going to replace.

So if that's kind is of mentally head where at. our

come. what business and conservative our to as great. taken to in to same we what run optimize the hopefully best that we're the can by token, we a But and to this our value and way got We stance And have then get get clients, going is we revenue a proposition is do.

Gregory Gibas

sense Great. it makes exclude Very to yes, And it. think helpful. I

sense a get it. of about or how to great potential were you upside that. thinking Just

-- if So on like any still strong. as seeing I to comment you it you leads Any up Like slowdown seeing sounds trends wanted maybe there? there retention? to are can follow you're remaining And well? anything

Patrick Goepel

a related related meet COVID Yes. morning, have around about we and numbers retention to X% that an probably then had we was pretty our talked probably No, strictly retention, every positive. improvement X% COVID since to and and we been Really that COVID. wasn't improvement

some layer very been So and other of that products around components the we're on cross-sell to retention services able have been positive. HR very have positive compliance our tax and and our numbers

the momentum. job, like we'll and continue can that build things on to doing feel we great we a So we're control,

jobs access to they TV, far if you provide gloom recession Street more and a that. talk I -- there's Main doom recession value proposition their want to America, the they and want more businesses. to want get economy, They [indiscernible] And and people. They there's employees. sometimes you still As to better as think employees turn But to on grow when than capital. still this the and

into think are people it with There's and X as have faster people the I But if in I you workforce. change, even it million going of to the cycle bring COVID And workforce. more don't dropped some immigration. you And very that pressure will to workforce out yet. the think there country, might of fully maybe about about to coming people little change where people retiring does be workforce than to think we we're where the the bring Americans if time. back over

you kind slight a back have America. And business actually will do of to work. small recession, will, good that's if more I you If bring it think people for

do about repetitive pretty So that. at TC pretty grow when that's you tell to talking that's company a $X.XX I'll we're next revenue we're going over to to here $X.XX and you and guiding look we excited. feel stand lot million have we clients bullish, $XXX ERTC and at you of any on we of really about behalf of the business. have good value we that time. momentum, our test a revenue, proposition think think includes your that And And year

and now. the -- So for how question right thinking we're about thanks it that's but

Operator

At end this time, of the we've our session. reached question-and-answer

closing Now I'll hand the to for floor back management remarks.

Patrick Goepel

I starting access year, to capacity building business. a to people I people we're have scale what doing. Yes. XX and about the a years would $X.XX losing this and we million what look more started I've in than -- and what phenomenal. think on share. just when $XX $XX couldn't XX pay And we page that say been I new forward we're We're to cuts, here. and million calendar we're get and is turning be I had about I less Were guy, had excited are employees

couldn't and in We clients growing leaps by have growing early bounds. a we and access our that We're days. get to as business we're

optimistic think you. lot or her growing helping the a they helping Yes, have your clients, And and in the might really things employees momentum. or your future. I'm that the succeed some there here and uncertainties we is of at day there on as build have But very end the business, the we be families of economy what your matter TC

look sometimes price. it in And share that. be price, I I at also scoreboard, and investors, the done times. you build is value as the scoreboard is the believe get at as the when So that share But time yes, can over we've frustrating

to are best best the are of that Asure going in days XXXX. the days happen here But

to seeing So I time. and you appreciate in look next you. listening you forward Thank

Operator

This will conclude conference. today's

You disconnect at for this Thank participation. your your time. you may lines

Asure Software (ASUR) 13 Nov 232023 Q3 Earnings call transcript