ASUR - Earnings call transcript Q3 2024

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Operator

Good afternoon, and welcome to Asure's Third Quarter 2024 Earnings Conference Call.

Joining us for today's call are Chairman and CEO, Pat Goepel; Chief Financial Officer, John Pence; and Vice President of Investor Relations, Patrick McKillop. [Operator Instructions]

I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.

Patrick McKillop

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

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

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

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

executive will SaaS an followed by have Stephens November we Conference Virtual attend Conference York. XX, be On Nashville Conference Alpha the XX, will Technology York, our XX, on and the in I but upcoming moment, folks take to Relations also the to wanted over attend Select New day. Annual ROTH to Investor Conference member activities. November I taking in a just a will place of Craig-Hallum the that On in Pat we moment in call team attending hand the Investment remind November Needham New

and we on Investor would us Capital Summit the like assist investors. thank the Capital December December, of on with very Asure, of December all to I Conference. attend will month to conferences, Human connect and that two Management is to Markets our TD those XX, in Northland important X efforts outreach Cowen the virtual During

being of Relations is link will made this to Investor everyone be via like website. remind would recorded, I available section and for our that call the Finally, a on replay it available

would that, over now call the Pat I Chairman turn CEO. With Goepel, like Pat? and to to

Patrick Goepel

and Patrick, Quarter Call. Third Software's Results you, welcome, to XXXX Thank everyone, Asure Earnings

CFO, business XXXX joined for we by and our outlook. our our third this update call provide results as as a Pence, quarter will John and outlook XXXX remainder the I'm initial our XXXX on well of for

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

third prior decrease, quarter $XX.X ERTC $X to to was million year, Our an which a revenue was million, approximate relative flat nonrecurring owing revenue.

XX% total the to recurring Excluding last compared and by year. grew revenue comparison, total ERTC both revenue

quarter just Importantly, in our recurring third prior revenue the total revenue was year's the in period. with XX% of XX% compared

revenue nonrecurring recurring significantly revenue. more know, is you valuable As than

ERTC the Our our revenue in performance the in result been value solutions. the expanding in focus quarter with see of recurring on Key lower of efforts has revenue can of you acquisitions quarter. growth an third the from portfolio replacing and and organic mix revenue improved drivers revenue, the include our

purchase XX of resellers, X repetitive solution The price repetitive of been able multiple million. we've on been is over revenue round $XX past terms but have average also to out with to payroll quarters we of X.Xx approximately acquired our The have acquisitions, In primarily a equivalent about companies acquisitions the revenue. set.

share. thereby clients their HireClick tracking HireClick's manage capture hiring them solution fit capabilities nationally example, expand and key a have and our it provide a brings to applicant We to scalable us and set For for and us help to more gives that clients need our system plan for comprehensive enables wallet a believe programs. with solution success

the organic X% meet our recurring Turning quarter revenue not in to growth did our to organic performance expectations.

accelerate will XXXX really we've some and as momentum finish our in we indicators However, performance. and place XXXX, encouraging leading believe had embark organic that we into

sales were XXX% last year. bookings compared Our up to

current This XXXX, up QX prior set and has up is nicely QX us XXX% grown year. versus to XXXX. from growth will in Our backlog for sequentially XX% double-digit organic

report for in tax unique with America's implementation. a SAP asset pleased Workday large to now wins some In enterprises. process about clients, capitalize of Workday, have pipeline. pipeline system live thoughts to going robust the solutions we in we're management relatively deals additional of store and Human have shared and very human Oracle tax the and also included our capital We a we've chain on SAP large integrator important beginning it we Management past, the and strong Capital of assists large nationally largest went We're enterprises sales have in very with space, grocery that with live a known one that

X.X funding the provides XXX(k) broad-based, serve adoption growth Act, to of plans we're This for government's initiative we've and was our product partnerships businesses. our small SECURE leverages repetitive for businesses. and about include encourages solutions for In our businesses and expanded Initiatives offerings sizes. which the quarter, excited all XXX(k) small better that

solutions, workmen's In the services very recently our as called We're about upcoming the new excited in capability care to of introduced also addition small well product preventative space, a compensation businesses. launch as have we health financial brokerage AsurePay. benefit solutions for

advantages quite app banking easy-to-use employee online efficiency. features Delivered such Americans mobile offer AsurePay more. as will paycheck ATM debit with working retention it innovative for a while overall and employers bit attraction, providing advances a card, withdraws, is to an alternative and free an via to also

minute to spend on a two Now I'd like operations. or

We're with We to profitability of performance higher scale. acquisitions enhance in multiple-pronged believe that and our maximizing revenues payroll platforms, to of that efficiently important a create lead should scale playbook capabilities, this technology We've in transition The profitability are transactions approach offers is playbook our margin coming enhanced improve and strategy. our processes, acquisitions. believe these economies the years. effective business new these over highly revenue established we onto area. potential executed continued cross-sell several the our which will this us have We with our an from Acquisitions pleased to part growth.

enhance with continue common coming interface ball over leading continue of with solutions area with move this our We'll the experience several We to new user Asure the next have enhancements on goal forward and months. several modern capabilities. all the client technology, integrating in a to

million, our measured business. EBITDA scaling initial Now EBITDA revenue We're turning updating XX%. current business XXXX of trends, adjusted revenue million. guidance. the our range on We XXXX margin Based guidance $XXX to value and we're to over million adjusted a and of XXXX million XX% between of margins $XXX XX% XX%. our $XXX to The and $XXX between now also of expect margin the giving of reflects guidance to

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

John Pence

Thanks, Pat.

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

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

to the third on results. quarter Now

offset Third as declined nearly relative $X was million, by revenue. was XX% revenue million quarter $XX.X or recurring million, year revenue which improvement in unchanged $X to a ERTC nearly by prior nonrecurring

XX% relative the Pat now compared XX% revenue our to year recurring with of earlier. mentioned, revenues the with markedly As representing a prior improved total quality of revenue year,

period. the payroll broad-based and for led quarter several quarter by and our third for $X.X $X.X management margins during year. the the million for decreased recent Non-GAAP Third tax prior quarter in year revenue margins acquisitions year growth revenue significant prior Gross in the net XX% gross Net XX% third a XX% to was versus to -- was quarter period. loss third the from from prior loss XX% sales. recurring of the decreased million,

the to for $X.X million scales. EBITDA EBITDA third year and $X as was the $X.X compared was in EBITDA million, in third adjusted year. quarter believe to XX% longer the our in is the the in down million continue quarter, quarter over there the prior prior for margin third margin XX% the We period, period. upside from prior from substantial decreased year $X.X Adjusted term to business million

revenue quarter equivalents recurring $XX.X and reflects million. in select support growth. of cash revenue, Third lower the cash the ERTC we with to quarter transition and of $X.X business to revenue revenue million, ended We investments debt trend have second higher and and EBITDA the

Now guidance fourth XXXX. quarter the in for terms of

are the be range the to from primarily is execution fall the fourth the bit expectations, between is for will introductions to revenue of new EBITDA variability quarter Adjusted this million. of fourth and that lower of enterprise $X timing of At in We quarter $X be revenues it tax revenue $XX the deals. result which million. $XX XXXX guiding large appears and million anticipated the to few a and million of time, our short implementation and initial a product

represents as This look backlog. contracted in XXXX important we previous from strides million $XX over over with made quarter we We to the year. increase closed have feel and We XXX% strong momentum XXXX. have an in forward the

We initial EBITDA guidance are to of XX% with the of XXXX be to range adjusted $XXX margins in million, XX%. $XXX and million providing between

but acquisitions Our the still plan to not continue acquisitions, include XXXX in potential we do does revenue guidance execute to future.

are opportunities faded, headwinds more have and the XXXX. of business value. the continue XXXX ERTC creating focus shareholder balance In from about we The of summary, the growth and now excited we our the that to is for while have

growing XXXX. do debt this the in we financing, focus to on a use both long-term business call inorganic achieve place objectives. organic as We our the prudent. evaluating of referenced, to growth. believe sheet for of over the our debt are as intend To Before to various and options turning having during more become as business is end, over markets we forms favorable, leverage the Pat, the revenue finance back But just potentially balance not of assumes I model complement that we

will existing to filing. we for entering also ATM or announced our mention sales the closed market a I wanted offering, after today, augment of an which agreement the at-the-market that SX

additional arise. ATM, have we intention to they funding immediate to us opportunities flexibility the ATM in established While any have an not should give utilize for the we future do

turn to the closing With Pat back for call remarks. that, I will

Patrick Goepel

John. Thanks,

report are to in of third We quarter performance pleased solid the XXXX.

product growth, and in our expanding business strong first the to commitment ongoing months Our yielded X advancements progress XXXX. have offerings of technology

like portfolio. we debit an be more. plus features for free online withdraws to our banking delivered things create more an client app a intuitive will unified work ATM innovative that to As It advances employees and experience, paycheck capability, latest card the product is AsurePay through mobile alternative addition

to ability we've relatively a client a experience with for XX announced strong high-value third technology summary, bring growth, over applicant another to as our that with the we healthy. uncover in in added an eligible that QX We're premiums additions increased which we third in ARR completed and deals well delivered plan pipeline XX% over new will will last on help the percentage the aid recurring year's backlog, in management acquisition quarter growth. In checks, continuing young the revenues XX%, in they last from as QX lower the stream. last ways XX% tracking which and have our Reoccurring $XX of performance an cross-selling human in for These future bookings over XXX%, businesses a our we're executed tax portfolio, future XX% months XX background our complete multiple process. to XXX% a total small be through from was build company plans revenue in to which and the to approximately clients products, and for, revenue as aggregate few of hiring well deals We them XXXX. space, over solutions may in from capital quarters with solid capabilities revenue add remains and acquisitions growth We've million health care potential out which will QX shows grew existing grow quarter our for as us aid to attracting clients. credits our

have of opportunities guidance $XXX growth and for to the XXXX XXXX. to we in into XXXX million have $XXX implies We the million the without remainder headwinds revenues at from exciting acquisitions and dissipated. double-digit Our ERTC forward look

small managers large help enterprises drive -- compliance. We businesses base, capital and will solutions streamline management human innovative providers their provide human management will tax continue grow to capital that

you listening our Thank for to remarks. prepared

I'll the Operator? that, session. back with to So call for the turn operator the Q&A

Operator

Joshua from & is question first Our Instructions] Needham Company. with Reilly [Operator

Joshua Reilly

float going think XXXX, the income more quarter you maybe headwind implies most starting at on midpoint to at about right off, about growth quarter? just was what was maybe XX% gives the lower guidance, you you a your to at expected internal some internal what be the So just the different planning, as for given entering year? midpoint. there's that revenue if the the initial versus guidance number confidence What likely on of than that's color And plan for the look your based next

Patrick Goepel

thanks Yes, questions. for the Josh,

I ERTC grow as out of that going year, of you to we've And the big First laid think executed how last ever We hey, most all, were, part, are think pause, the questions stuff. we a all plan. about kind overhead, fairly well. for

as bad, and or around in that and it's professional in it look backlog quite the about good. difference some has around big was not repetitive first third probably cases, But will all, revenue modeled I I the think is lot we X% of -- quarter, in reoccurring a a deals time, grown services. bit. that pretty area Over timing XX%, XX% The of XX% revenue. the

here impact quarter. timing it's in Professional these on deals. third the an had book-to-bill some of So large services

a lot Backlog We timing, I was bit a there's up or expecting little screwed frame on yes probably of And a Sales where on here a question to I got XXX%. to good delayed we're then they was early that two quarter a celebrate. when. a deals. It's in time of it's This is things. own some I of And not the question look XXX%. a were lot up. as just a up if, is forward, ramp. and

where it of of we're around some said, around offerings around modeled often. some timing the had growth, September. out deals being July, very And of the these sales doesn't momentum just marketplace, the XXX% of some happen strong. then that comes in we making in XXX(k), That The it's the August, progress kind of then rounding of in in is AsurePay,

when ERTC. as And we pretty implementing XX. have year, with think the we in XX think there. I known to already Should I We're kind in XX%, XX% own were better I I'll in better? that Maybe. if fourth XX, And the We're get be just quarter that million you And had and about future. I of the $X in the you to guiding of take sales range backlog, quickly. last

Yes, of confident. when. not a the a of that pretty it's a have a pill accept. we're business, if, to of from So it's it's timing we question But success all question

Joshua Reilly

And And like enterprise help feel that then are the there? like direct of helpful. That's cycle over following sales it. the a the long maybe is next of last I've is few level that can you Got these us tax. the just lot understand How of much Maybe on payroll on questions that gotten now you better you how the visibility partners? up kind versus have that through what's over deals of quarters? progressing quarter.

Patrick Goepel

Yes.

In -- thanks, Josh. addition

John these Chief on have addition solutions. point Officer is a is I our things. of But President, Eyal of to the Goldstein, and Pence, In couple Revenue of some who

a we channel solid market. really different we all, successful do right? a models. gone announced payroll, well. couple let's First business, been Where we've of Vensure and the Well, very the of in that's integrated have we've in PEO don't And in small is say, compete, partner

we the compete had offering movement large and competency And we but core lot been in we live names end, we'll disclose of we've very money but have filing of further, And bit large successful. in don't payroll, success. a some little as tax tax a and go the and we've go In filing.

and it's they're delayed ERP at if have where process. moving on whim tax motion solution, And not sometimes days. the people a probably whim XX current in the at bringing But them an a our XX has it's to on been the cases, within around all. We we're used have to Where XX In the the XXX to it's contracting. model an we we're done XX of bit, installing integrator, size ERP some solution already a solution. some been first So really of filing job solution. IT also to days, a they're live maybe if one the then nice cases, of fits the then contract of ERP

the book-to-bill. kind on of that's sense So

companies will bringing companies. lot are And is the doing with that integrations big cetera. clients have and et the they're XX or the other thing future, of us, a XX other in that's That's payroll then and number, we us, bring a payroll selling,

of lot legs this lot contracting momentum. timing conversion The is timing book-to-bill, get anything strong of has better is live our early got have and on referenceable. ERP else. better So get a a innings. solution it. good pipeline, news or But And versus are of We I'll good on, will implementations that the more that a gone

you going anything Eyal, end. you're front -- on I'm to add? there the to just want Is maybe

Eyal Goldstein

add other larger can the opportunities their is for direct Yes. of the ultimately, XXX opportunity system customers a one working come it's of the and as of I Fortune deal would say, from. or clients integrator revenue only enterprise combination credit more us as online, with with they and where we thing these gives to integrators that many I well some Josh, of get to would the we do all some as

those both So combination it's a of of models.

Operator

Our next with Bergin Cowen. TD from question is Bryan

Jared Levine

It's Bryan for tonight on Levine here. actually Jared

Can planned FY the for your what 'XX? as includes in based here. go as here underlying already announced guiding, over including well you M&A 'XX assumptions that question First to revenue both M&A on inorganic FY

John Pence

acquisitions closing not assume think one for do The only 'XX of this deal the quarter. we guide, thing guide Yes, we're any the the I fourth quarter. have rest anticipating post that incremental does

Jared Levine

there terms to those What about kind in growth, of underlying macro any shed more employment of for assumptions light conditions, on there anything 'XX?

John Pence

funds. client The look played that about interest million historically right? about is $XXX,XXX point million about only approximately sitting I magnitude, it we've big rates, I so quarter. So year, think, X.X a way is we've of order $X been a about, rough of at the in would say $XXX assumption on we

approximately our played a X.X% terminal from like the models into rate Fed. So we've

the So it's at between we're quarter, of bit think impact quarter. the as some kind little rates we just of per have complicated. will roughly -- a of But a and and gist they looking it I because the XXXX mortgage roughly is, we marketplace headwind million of have on $X well more think into

put in to So don't assumptions underlying some the think sense, really the key that's anything we've employment. of I differently we of probably one you terms modeled give in.

Patrick Goepel

Yes.

get issue about it's in it's you the biggest think they people. a some value would proposition, access with can't tours, enough help trying But people to is trade and If whether you at we've to people. small obviously them association, And flat. flat. sales, restaurant our get same-store I compliance. plumbers, upside, great. that's access we're If welders even do to we to business, I capital, and of modeled a If relatively kind look access tell

Jared Levine

to And it. your talk current for expansion 'XX here last question Can pointing the 'XX Got guide? drivers then you notable of FY about relative this here. to margin you're FY

Patrick Goepel

just million Well, XXX%. The backlog. think the at we in simply backlog $XX Last this put, XXX%. up up something I had sales like year time,

now. million have right $XX We

that had. Some momentum of is this just the we've

you new time ERTC, off coming to time, we're with And roll sales some of train growth. about if from those to where at about the products, we quarter pivoting we the organic products and X.X% had lot If those kind take first were out. about a motion think the ERTC of think you

employees. year a all, of the common common interface products We're think stat employer out. across that having we've One last over what rolling added if is, userface here we're you a that just first about all other user

We're a per $XX I'll $XXX neighborhood of products about year month. relatively some that of soft month relative. If employee employee a of per was now beginning capacity $XX you PEPM month, per were it per our probably in because call was the had the what a or new. We think

capability, added announced So We've AsurePay announced comp. if business, recruiting here we the about that workmen's you brokerage November just the preventative think we've health, in that month. this product,

the then that's capabilities, we here. have off contribution. coming we So well out we're for And fourth I and ERTC, bode And the all these building in now backlog then the offering. early we're really ERTC quarter, off I really And of think had business like the a future million relatively said, momentum. sales $X lot rounding

Next million year was about this we year, $X.X through had that we're that.

So amount a confidence. of tremendous

Jared Levine

can like Got margin to for And talk pretty points then, the looks FY X drivers It you you're a little about John, quickly, it. to pointing over 'XX? here, notable. real expansion so

on those expansion curious be margin for just year. drivers next So

John Pence

Yes.

consistent been of terms business. think just a this pretty I in being scalable we've

good topline, we like expect deals. mean lot doesn't when that I change add just the of of of don't It's you With of service these the it of without the a top on some come a costs, code. of doesn't extra sign feel lot tax just nature cost of these lot really a the that rewrite incremental large incremental some lot with growth any deals, to incremental by growth cost. of topline to We a topline.

So the as the We should contributor I cash. that's primary bottom a It's thing terms think this business crest least $XXX of minimum It's along. we at million, at be we XX% been start line we've same driver. should to of that think scale. be, just in saying all

So station than anything the the along I more think don't it's way. way

Patrick Goepel

add, at Yes. year. were just I so, XX% if XX% we think This And XX% XXXX, we're year EBITDA. maybe non-GAAP I last or could

let's the increasingly a up. just talked employer common the go and think going to user about user -- interface kind some guide, in about you And with things employee if of of then the year we're we Next the say, interface.

we're of going validation you rolling that a ability tools think bit. rework operationally out, gone the some If scale down. quite and to AI The down has about is

We're out increasing at of some take our sets non-customer an some with to pace kind able technology projects. service of

but all we're we quite to have visibility of early. more. can So is that really bit a expansion, do up of think -- We we really adding margin

Operator

Markets. is with Capital Eric Martinuzzi next question Our from Street Lake

Eric Martinuzzi

the delta mean and the by new I that, revs between old revs. XXXX wanted And Yes. I the XXXX categorize the midpoint. to

a $XXX So midpoint you went to from million a $XXX of of midpoint million. guide

QX $X short million here We and implies in in So by QX. that million $X about million obviously, in up $X came total.

it So different buckets in three I'm to here. put hoping

product talked like slipped. tax three, number introduction. revenues new You few that two, from lower then one, a Number services. number large deals pro And about, enterprise it sounds

bucketize million? you So that can $X

John Pence

I -- first you I'll Yes, would just give point. my

I would to pro the go the is the deals themselves pro with tie of most think service install tax I that because to going services timing.

then his give So those. let feelings Pat you I'll of on kind that's would I where

Patrick Goepel

Eric, not because a we're Yes, be. would think it, it's repetitive perfect quarter than would thought about science we roughly, X% we about just say as we more a I but

about And that's so if think $X.X and about fourth third quarter, you million or so.

Now that some whether or we we haven't And by get kind all of exclusively of deals. signed way, and get and we end some people and that perfectly stuff. we up million almost them $X.X that timing maybe the It's get it's them. is just that stuff when started of started, the not tax

PS. of, that in billion or XX% let's say, X/X the So $X is

From in general, X/X. probably roughly I say timing would we're

XXX(k), general, client of So you our behind rollout, card preventative if and if is think you think probably products and in new our the about, let's some of roughly so. or you adoption the health, say, quarter pay think book-to-bill a about

of Some products. varies those based that on

it of So we And does a if or would around would front. we is XXXX. did on I think, that, happen deal the in have million. probably of will not say, the be products, new happen, the it kind of have some another $X will We thought I somewhere acquisition timing

then in other backlog so thing, at the it's probably on X/X about look where in about deal remaining it, the were on Maybe about side. if overachieved So and The we've sales with where I kind of look XXXX. timing backlog. is I that's was, under X/X getting one acquisitions, professional to in but if the We've at third, a $X rollout, ramp overachieved in the it's services, the million guide or timing.

Eric Martinuzzi

Was just clarification. then in And Okay. of ERTC a revenue XXXX? there any QX

Patrick Goepel

say would de was I minimis. it Yes,

John Pence

had I $XXX,XXX was think all some, it $XXX,XXX, like think in. we I maybe

Operator

is Jeff Capital Group. with next Our Craig-Hallum question from Rhee Van

Jeff Van Rhee

-- many on Just this question With miss, meaningfully $X about? how talking to deals that a this, million respect tax tax contributed deals follow-up what are that the to push Eric's there. we

Patrick Goepel

Well, a XX we deals, as or -- could integrated be have much where as more. deal large right, it the

of so And some moves. around timing the those

SAP, you And be different their they Oracle to time think without it, have deep about getting into we're that, So Workday. They going have if over provider. platforms. ERP too

is solution provider a licensed plus it. professional component that a of a so to And kind services

bigger first that and is some go the to one-off implement there's have deals they involved has they that on been one Capgemini they and of kind really have kind so And tax, it. ERP to solution, deals then probably of area. There's other where some biggest might in

firm So those But of they go of the have consulting us. to they ERP probably them live once They've some go live, it's moved a implementations. they in bringing area XX-plus.

Jeff Van Rhee

Okay.

helpful. That's And then... Okay.

Patrick Goepel

And just of parts way, it as live quick, to there's starting By speak. really the go Jeff. we are that

forecast it. it or well truly optimistic thing, a it is didn't this It's So privately as too we mean, nothing either was or not the didn't like don't have, publicly as more do I I take nothing like we timing and have well. -- less. things And didn't I'll ownership that tell I I really just not going of you. will sign should it's It's but it. timing

Jeff Van Rhee

on a midpoint? sense in flow have free on you $XX the XXXX do million EBITDA conversion John, cash

John Pence

Yes.

tremendously. 'XX. I in cash or software type between the free which would've just similar changing think I delta I flow, give our see I mean number answer is you adjusted don't really and that cap, big EBITDA the

this think capping probably about we'll million, So I right? be year, $XX

big I the is commissions. think delta other that

this in from delta other so up the were flow a of where We'll lot And cash in big a is be believe of because between we should year stepping we the terms I simple there's of XXs. two. answer free I kind be that think don't

Jeff Van Rhee

still it's got maybe into thoughts that ERTC, the your The AR in come for do scenario heavy about you a on expect you bumped up talk Just year? when down? really the Is elevated. AR there to 'XX,

John Pence

of we -- it they ERTC, like pause was pause. even a truly the so mean went I when so. hope I was not -- freeze. through It a

flow. So of in September almost letting year, movement of and last say this between of checks September year, XX would terms the no kind I really of August IRS

August, I starting see would and in jam to in we kind that break. Early long actually of September, say,

through IRS. visibility systems have into We the our

is So what sign. an early have like we warning

usually like X-week when when So we're or the there's IRS lag a about to and issue going check," says, "Hey, a between X- cut actually the check. they

the previous have haven't we is that we to of a releasing X- months. X-week start signs funds. We've to So we seen start seen the when for sprouts about about know IRS early XX head

somewhat I to believe But how if change kind we're the they at So That's quickly of believe Hopefully, that AR in the I things. of coming it's the is unload whim to kind these that down. should start current continues trajectory, waiting that major on number still really down. on. come do balance do IRS its it's their as

Jeff Van Rhee

going comfortable know over? And you right for I would Is you as you you end then what acceptable were make tracking Where just said the is the just And on you that year-end. last last me. for debt the is continue leverage Okay. target? an reps, level acquisitions, not to sales still you two then quarter, quarter? by think quick One side, XXX be on the XXX

John Pence

Yes.

is So still the target. last question first. I right believe that

It's I my then range I the me we're can in with business. the But don't plenty to at current If Eyal that. we in the I on probably a comfortable we'd if terms have terms I of acquire end pace, to leverage, of continue think think opinion? guess. different Xx. quarter. plenty. know you I probably be XXX, should at max in correct of be I'm about that's the that's that if mean, cover the And leverage the Pat, XXX, think wrong, in probably And that

Patrick Goepel

that think We drive we're No, journey. that's again, comfortable our the that -- scale drive. will have to expansion, expectation level. margin with we some we're And opportunities at

Operator

Our with Brad Stifel. next Reback question is from

Brad Reback

us quarter. baked taking miss this you you appreciate Can ownership of Pat, level the sense you of what XQ? give a cushion into

Patrick Goepel

Say that faded again, a I'm out to make I just -- Brad, sorry, want little bit. you

Brad Reback

give conservatism of level the guidance? Sure. you Can XQ into sense you've us baked of cushion, what a

Patrick Goepel

build to of. quarter we fourth think make Yes. off I a when look as foundation something we wanted to we in XXXX sure at look mean and we that built that I it, had we

too on we it betting needed much starting the and visibility implemented. to get as contract signed far not we're be As and work, then

-- the started for at strong we in really in month And will already that it then backlog. have roll the say, the fourth. it looking in third closing that let's anticipate we revenue one quarter, acquisition has it. We're a we're started at have we a that, do at looking So ROI

pretty certain. So that's

So the should on $XX feel million and to $XX we not able million betting nicely. hit the we We're come. to be hit

It's a flat I year of ways. I on of of ERTC that important We executed. in we're our to of year do largely out we was timing this one a their that getting in in off coming ERTC. worked explained think you're guide going kind I coming last scale the think there the get people start think as hey, said, retrospect, from and with has multiple things and team butt it. --

put others, have the opportunity exceed us rates on And out took down. and we reset plan, interest so just coached and what set also year, can a when referenced want expect to of an that on acquisitions guide, we a in next then you is And in get be we the we here, do to to go then and John we ourselves. expectations we which not expectations. And that ahead quarter where fourth we position now

the year So that thoughtful at about and we're as headwinds fourth quarter. look have next some of we minor we

Brad Reback

going of and that what's flow on free you think, there cash has kind through been negative actually conversion Can I first how John, million. months, the reverses? $X.X through of to the X Great. tune walk

John Pence

delta I be right. key number, I in think putting that the to think that's if acquisitions, to you're going

Brad Reback

I'm cap software. OCF the using minus not. only I'm No,

John Pence

a timing just the issue sheet not You're at -- really bridge from much. spend just of off don't on balance I movements, my a the balance talking the honestly, adjusted mean, -- I'm of balance lot because looking So focused sheet? a it's time EBITDA looking the GAAP on about more from number sheet movements as I'm mind. in my the I to

bridge to happy to bridge spent spend happy of cash the trying cash I'm to you, time not -- kind a help GAAP flows flow. off I've back the lot but kind time of I'm So operating to of some

Operator

Our from Northland Greg next question with Gibas Securities. is

Gregory Gibas

year tax spoke of that those Does next you deals on that recognition? of later implementation of large those likely of for were assume Does regarding kick when, said assume guidance to guidance QX some if. side, or your into kind not matter you the kind in

John Pence

live of the second one, signed have think We of some a think example, in this example, I in January go we've in we is at in to, quarter. We're of I an So little we then of anticipating the -- Some these one them I Eyal 'XX the as that January that how went mercy control. Pat bit XX,XXX in Pat in signed it's largest in right? that's for working little some in some grocery chains not. mean that start expected can remarks, with. got their live January. But company, of as right? to to right think cadre, bit our XXXX. meaning. some little it's that and some bit both, got But We control, in got quickly steel And that of got going out employees. again, as now that quarter, third pace. as quarter a that August, of store it live is earnest we a of keep of it's we're of a whole a his got mentioned, going some We've our we've go are prepared referred large they large expect it to to integrators one of

it's XXXX. is it would of say some I into So in quarter, this some of

Patrick Goepel

Yes.

have also of X implement of quarters we then now, them, but deal year. a next the Some through that we some license get we revenue

timing -- is So some the is now. it of

of quarterly XXXX. Some it is over

is the will one sales robust. backlog metrics not it's all. So the say then a And I strong. strong are pipeline fits the and pretty is order very size

So it will go throughout XXXX.

Gregory Gibas

Okay. another what's too Got And $XX do your expect year? organic within is just, I Just maybe QX the And to in for of of much ask growth you ARR, side? year, to to this guidance, and trying wanted as this recognize well? a get I growth that kind of expectations to organic how million 'XX or implicit on it. way guidance the sense guess your I guess, then captured ask I guess,

John Pence

go think single and I but it have don't I front fourth in be digits quarter. the of -- right the high in I'm to of now, -- be going roughly I will me then inorganic. think it organic It'll Yes, it's rest of

Patrick Goepel

acquisition in million the as should far area 'XX. -- XX%, of and as quarter so as neighborhood But the as coming have without headwinds growth float. or on then throughout probably somewhere $XX it in off probably some acquisition And million rollover, probably far organic that be acquisitions, around a $X we rollover of the XX%

Gregory Gibas

there just helpful. strategy That's kind kind synergies to you acquisition the on And I HireClick. Okay. the metrics that maybe of of valuation any share touch wanted or Could of discuss of transaction? and

Patrick Goepel

Yes.

in I think -- and Eyal, too. here maybe jump

can They our a either value be tax can health people and We them can where legislation tax access to et HR And help give out. to capital, job interface because we'll their people. And for access boards businesses pretax and in have can HireClick be we filing with forward. to access businesses, businesses them so we change local out acquisition business. boards is national difficult. programs, proposition via cetera, and whether that compliant, drive focus it's compliant either stick small stick small also job will very talk they with when a of then business the within hire And program, payroll, then programs, small to partner XXX(k) as want well or growing their want Asure they they that if on

to on part value of have really part growing of anything our we good HireClick. add? proposition, we'll momentum. Eyal, It's lot a bundles, we anticipate plans our revenue of So within that get want you

Eyal Goldstein

thing it part of and percent is the there's in piece and business. seeing to for recruiting the a there would small XX-plus proposition relates It's add other Greg, there theme, that a consistent I key value only around say, openings would range. out still data I our as we're job

customers, -- for are job current customers, fill so -- both openings. And hire our still people to really good to and looking looking and we're dealing consistently prospects with

Street client profile. still a Main customer that's and U.S.A. So ideal our challenge our for and base

gap. HR compliance there critical to to as as is technology really plays services also descriptions, the help that And relates close job so and interviewing nice skills it with well. job requisitions, new hiring it And employees our creating really

Operator

with is Charles next question Our Stephens. Nabhan from

Charles Nabhan

multiples XX you a out that could parse acquisitions multiple I type questions if heard seeing the as -- solutions have cited on have on had months, ancillary such Wondering you're just Most of for of been you if X.Xx versus my you asked, past resellers of average HireClick? the correctly. but your between what from

John Pence

proxy, really, been mean very of the my good some And would end outside think is X.Xx had terms from of have the one very, that a I low think really say we on had I right? high resellers I was Yes. perspective, -- We've really multiples. I end. that in

good X.Xx for know, So . I anything? the true mix. I overall proxy much it's holds don't still that have you is Pat, think if pretty a

Patrick Goepel

a take issues. indemnification a you kind -- the lower. on. that think seller or little thoughtful I of note do one resellers higher is have in bit care spot multiple. to are We The a brokerage The had around you're We of No, business a bit recruiting probably what was area. little either

we're going where perspective, to here. do. right it's I EBITDA timing. a done like and we we scale, -- the we're for But building we're with been and to set in frustrating have what doing solution and really an be implement grow So that sometimes able organizationally, we And with we we 'XX. Obviously, to out foundation get we've wanted to our on revenues obviously, arbitrage have said, And we good really feel pleased then them, to we're exactly X.Xx. want as they've what that think for

expectations Now the the scoreboard we just position I the to and set right right got where get it. shows in

Charles Nabhan

market wanted the follow-up, about quick specifically competitors legacy the I seeing landscape well? anything competitive in the Got different? it. as larger from competitive environment, to ask as And you're maybe changes Any and a down what

Patrick Goepel

I'll Yes, touch let Eyal that. on

Eyal Goldstein

bit. little Yes. a tax a and change not we're the competitive solution, We're we Paychex the much business landscape who of There's We're consistent in It's still, we've the tax that before, that's big their part some ADP really. down pays the see come theme the in business. But primarily seen right? -- there seeing us where and we're with hasn't well. for that seeing ADP been stand-alone from as of playing guys,

Operator

with from question Barrington is Vincent next Our Research. Colicchio

Vincent Colicchio

were mine how new break between Pat, down and clients? of Most answered as Yes. bookings did your well. existing

Patrick Goepel

about yes. We're XX-XX,

flip to say you almost have if I we're to roll think that would So would to opportunity. out, over amount the What we'd -- about say existing. like I think that new We of what we XX-XX with time. trying

Some and almost through the going some to will And to continue programmic technology throughout out then kind it's line sales. build as be almost product have have opportunities. XXXX immediate take we it of sales those of in and event-driven of

about employee Eyal's lot per employee we're opportunities. of I really last internally working are how cross-sell and working we about the of year kind month. say, say per our $XX stuff, drive month, a And on was capabilities, calories on been would if per that let's thoughtful you what So more per think more then and roughly that. But

Now $XXX. area of in somewhere the we're

to really of an opportunity those. offer we some So have

around training approach et marketing, sales kind event-driven technology, the Now, force, cetera. of there's a stair-step

So the XX-XX. we'd there, really But movie of to movie. in flip or the maybe time, love early over see the middle XX-XX we're to

great a be efforts. Now with position in. the pleased us really is ability to We're logos those new sell very for to

new of flipping if to wallet -- to increase further I want I current share want to down look logos. slow model any from don't we XX-XX, want XX-XX our I clients. Operator, the questions? So at just the

Operator

for questions it time. remarks. back management I'd closing this to like no are There to further at turn any

Patrick Goepel

Yes.

et when I you. back. disappointing First it's know of immediate have you thank go an cetera. of sometimes stock just all, drop, kind I

and the think think When our day, we XXX%. products kind with we and faint to our time, out when that every moving we're grow out XXX what went share, of you We about up stuff. are up of each innovating XXX%, the journey to in did. They rolling question when, technology First We put hey, XXXX. The on want of last And you and we're we're every questions if, and that's year not about said, me. where in employees. day. all the done team I it's was were our AI wallet margins many we up This We're noise. rolling heart. ERTC when this going is we're to screwed backlog really and direction. grow going where a ability And screwed you but a that internally, question that at I kind are pause, revenue, Asure. that thank look I'll through great a here based job and profitably, do what to banner going for right if good what, this of take each sales we're carry not person expectations, We're going of we is so They've and a got the there things. the only to looked grow up If we're that at all, of replace business. doing it the tell a ERTC all around on you wrong to at

around So ask patience your I that. for

Thank time You won't to have you. today. appreciate I wait your and long,

Operator

today's conference. This concludes

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

Asure Software (ASUR) 31 Oct 242024 Q3 Earnings call transcript