Asure Software, Inc. (ASUR) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows mixed signals: strong EBITDA growth and positive guidance, but declining gross margins and increased net loss. The Q&A section reveals management's optimistic outlook on organic growth and integration of acquisitions, yet lacks clarity on certain aspects. The increased revenue guidance and optimistic long-term goals are positive, but the lack of explicit explanations for net loss and gross margin decline temper enthusiasm. Without market cap data, the prediction leans towards a neutral market reaction.
Key Financial Performance
Third Quarter Revenue $36.3 million, a 24% increase year-over-year. The growth was driven by strong demand across all product lines, including payroll, benefits, recruiting, time and attendance, and payroll tax management.
Recurring Revenue $31.8 million, an 11% increase year-over-year. Growth was attributed to consistent demand and client retention.
Professional Services and Hardware Revenue $4.4 million, up from $700,000 in the prior year. The increase was primarily driven by hardware sales tied to the recent acquisition of Lathem Time.
Organic Growth 4% in the third quarter, up from 1% in the second quarter. Excluding HRC ERTC-related churn, organic growth was 7%, compared to 5% in the second quarter. The improvement was due to reduced churn and better sequential performance.
Gross Profit $23.1 million, up from $19.7 million in the prior year. The increase was due to higher revenues, though gross margins declined due to a revenue mix shift towards lower-margin nonrecurring sales.
Gross Margins 64%, down from 67% in the prior year. Non-GAAP gross margins were 70%, down from 73%. The decline was attributed to an increase in lower-margin nonrecurring sales, primarily from the Lathem acquisition.
Net Loss $5.4 million, compared to a net loss of $3.9 million in the prior year. The increase in net loss was not explicitly explained in the transcript.
EBITDA $3.9 million, up from $2.2 million in the prior year. Adjusted EBITDA increased 49% to $8.1 million, with an adjusted EBITDA margin of 22%, up 300 basis points from 19%. The improvement was due to higher revenues and better cost management.
Cash and Cash Equivalents $21.5 million as of September 30, 2025. No year-over-year comparison or reasons for change were provided.
Debt $70.4 million as of September 30, 2025. No year-over-year comparison or reasons for change were provided.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Launch of Asure Central: A new client interface designed to enhance user experience, improve workflow, and amplify event-driven marketing efforts. It is expected to accelerate cross-selling opportunities among over 100,000 clients.
Acquisition of Lathem Time: The acquisition is performing well, contributing to revenue and cost synergies. It has driven hardware sales growth and is expected to enhance cross-selling opportunities and expedite onboarding of new payroll clients.
Revenue Growth: Third quarter revenue increased by 24% year-over-year to $36.3 million, driven by growth across all product lines including payroll, benefits, recruiting, time and attendance, and payroll tax management.
Adjusted EBITDA: Adjusted EBITDA for the third quarter increased by 49% to $8.1 million, with a margin improvement to 22% from 19% in the prior year.
Gross Margins: Non-GAAP gross margins declined to 70% from 73% due to a revenue mix shift towards lower-margin nonrecurring sales, primarily from the Lathem acquisition.
2026 Revenue Guidance: Initial 2026 revenue guidance is set at $158 million to $162 million, with adjusted EBITDA margins expected to improve to 23%-25%.
Medium-Term Revenue Plan: Targeting $180 million to $200 million in revenues with adjusted EBITDA margins of 30%+.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Bookings Decline: Bookings for the third quarter declined by 41% compared to the same period last year due to large enterprise deals booked in the prior year. This decline could impact revenue growth and overall business momentum.
Gross Margin Reduction: Gross margins for the third quarter decreased to 64% from 67% in the prior year, with non-GAAP gross margins also declining. This was attributed to revenue mix changes, including an increase in lower-margin nonrecurring sales driven by the Lathem acquisition.
Net Loss Increase: Net loss for the third quarter increased to $5.4 million from $3.9 million in the prior year, indicating financial strain despite revenue growth.
Interest Rate Cuts: The Federal Reserve's interest rate cuts have negatively impacted float revenue, which could continue to affect financial performance if rates are further reduced.
Debt Levels: The company has a significant debt burden of $70.4 million as of September 30, 2025, which could constrain financial flexibility and increase risk in a rising interest rate environment.
HRC ERTC-Related Churn: The company experienced a 3% churn in the third quarter related to HRC ERTC, which, while an improvement from the prior quarter, still poses a challenge to organic growth.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Fourth Quarter 2025 Revenue: Expected to be in the range of $38 million to $40 million.
Fourth Quarter 2025 Adjusted EBITDA: Expected to be between $10 million and $12 million.
Full Year 2025 Revenue: Expected to be between $139 million to $141 million.
Full Year 2025 Adjusted EBITDA Margin: Expected to be between 22% and 23%.
2026 Revenue: Expected to be between $158 million and $162 million.
2026 Adjusted EBITDA Margin: Expected to be between 23% to 25%.
Medium-Term Revenue Plan: Targeting $180 million to $200 million in revenues with adjusted EBITDA margins of 30%+.
Organic Growth: Expected to continue improving into 2026.
Cost Structure: Modeled to remain relatively stable for the remainder of 2025 and into 2026.
GAAP Profitability: Expected to achieve consistent GAAP profitability at higher revenue levels in 2026.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What are the assumptions for traditional organic growth and enhanced organic growth in the 2026 outlook?
A:The company assumes traditional organic growth will increase steadily, with enhanced organic growth primarily driven by previously acquired assets. No extraordinary enhanced organic growth is planned for 2026. The balance sheet is strong, and the company is generating cash, which can support additional acquisitions if needed.
Q:How much of the 7% adjusted organic growth for ERTC HR Compliance is from cross-sell versus net new units?
A:Cross-sell results were up 7% quarter-over-quarter, with the fastest growth in clients purchasing three, four, or five products. The company is focusing on selling comprehensive solutions, which is expected to drive growth.
Q:Have there been any material changes in sales cycles and pipeline views across key offerings?
A:No material changes were observed. Small business decisions remain quick, while larger enterprise deals may take an additional 30 days. The pipeline is strong and has increased significantly.
Q:What are the key drivers of the 7% organic growth assumed for FY 2026?
A:Key drivers include the rollout of Asure Central, which integrates multiple products and solutions, and the ability to sell bundled offerings. Float revenue is expected to have a small degradation, but account balances and long-term investments will partially offset this.
Q:Is the $15 million revenue contribution from Lathem time over 12 months still accurate?
A:Yes, the $15 million estimate is still accurate, with $10 million expected from recurring revenue and the rest from hardware sales. The company plans to change Lathem's business model to focus more on bundling hardware with software solutions.
Q:What is the new run rate for professional services and hardware revenue?
A:The new run rate is approximately $3 million per quarter, with $2 million from hardware and $1 million from professional services. Variability in professional services revenue may occur due to large tax deals.
Q:Will Asure Central reduce legacy technology stack support costs?
A:Yes, the rollout of Asure Central is already reducing costs. Newer products and services are cheaper to maintain, and the company is spending less on maintenance and more on new development.
Q:What are the underlying drivers of the improvement in organic growth?
A:Drivers include increased attach rates, with the fastest growth in clients purchasing three, four, or five products. The company is also investing in sales and marketing and leveraging new technology developments to drive growth.
Q:How will AI-driven tools impact top-line growth versus operating expense growth?
A:AI-driven tools, such as the Luna Gen agent, are expected to drive revenue by automating compliance and workflow processes. These tools will also reduce costs by improving operational efficiency.
Q:What are the trends in attach rates?
A:Attach rates have shown a 7% sequential improvement, with significant growth in clients purchasing multiple products.
Q:Is the 7% implied organic growth in 2026 consistent with expectations for Q4 2023?
A:Yes, the 7% organic growth achieved in Q3 2023 is expected to continue or slightly increase in Q4 2023.
Q:What are the integration plans for Lathem time?
A:Integration plans include combining Lathem's time and attendance solutions with Asure's payroll and other products. The AsurePay card will be integrated as a wanding device for clocking in and out, as well as a payment method.
Q:What are the major differences in the new Asure Central platform?
A:Asure Central provides a common user interface across all products and services, driving cross-sell opportunities and improving efficiency. The platform is expected to increase ARPU and adoption rates.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact impact of AI-driven tools on operating expense growth and the precise timeline for achieving certain integration milestones with Lathem time.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Alpha Select
Asure Central
Asure Results
Asure remark
Central client
Conference New
Conference roadshows
ERTC churn
Federal Reserve
Goepel
HRC ERTC
Hallum Alpha
Lathem HRC
Lathem cost
Lathem opportunity
New York
Northland Conference
President Investor
ROTH Technology
Relations afternoon
Relations section
Reserve rate
Secretary beginning
Select Conference
Technology Conference
Today client
Today view
York Northland
acquisition Lathem
afternoon Asure
balance
client fund
hardware
inflection point
rate client
remainder
ASUR Transcript
Asure Software, Inc. (ASUR) Q1 2026 Earnings Call Transcript
Positive5-1
The earnings report shows strong financial performance with a 15% revenue increase, improved gross margins, and a 50% increase in net income and EPS. Despite the increase in operating expenses, the financial results are positive. The absence of strategic initiatives and risk discussions in the call might limit the upside, but the financial metrics suggest a positive stock price movement in the short term.
Ur-Energy Inc. (URE:CA) Q4 2025 Earnings Call Transcript
Positive3-11
The earnings call highlights positive developments in production and regulatory approvals, with no significant delays expected. The Q&A reveals strategic focus on improving plant efficiency and meeting production targets, with optimistic guidance on uranium prices. While management was vague about some financial specifics, the overall sentiment remains positive due to the steady production ramp-up and strategic planning.
Asure Software, Inc. (ASUR) Q4 2025 Earnings Call Transcript
Positive2-26
The earnings call highlighted strong financial performance with significant revenue and EBITDA growth, alongside optimistic guidance for 2026. The Q&A confirmed increased confidence in future projections, aided by a recent acquisition. Despite some concerns about gross margins and net loss, the company's strategic plans and AI-driven initiatives are expected to enhance profitability. Overall, the positive guidance and strategic acquisitions suggest a likely positive stock price movement in the near term.
Asure Software, Inc. (ASUR) Q3 2025 Earnings Call Transcript
Unknown10-30
The earnings call summary shows mixed signals: strong EBITDA growth and positive guidance, but declining gross margins and increased net loss. The Q&A section reveals management's optimistic outlook on organic growth and integration of acquisitions, yet lacks clarity on certain aspects. The increased revenue guidance and optimistic long-term goals are positive, but the lack of explicit explanations for net loss and gross margin decline temper enthusiasm. Without market cap data, the prediction leans towards a neutral market reaction.
ASUR Slides
ASUR Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
