Asure Reports Q4 2023 and FY 2023 Financial Results Highlighting Revenue Growth Excluding ERTC

Rhea-AI Summary

Asure Software, Inc. (NASDAQ:ASUR) released its fourth quarter 2023 and full-year 2023 financial results, reporting total revenues of $119.1 million for the full year, up 24% y/y. The net loss improved to $9.2 million from $14.5 million in FY 2022. EBITDA and adjusted EBITDA showed significant growth. The company also issued guidance for Q1 2024 and FY 2024, expecting continued business growth and focusing on technology advancements and strategic partnerships.

Positive

• Total revenues for Asure in full-year 2023 were $119.1 million, up 24% y/y.
• Recurring revenue reached $99.7 million, with y/y growth of 16%.
• Net loss improved to $9.2 million from $14.5 million in FY 2022.
• EBITDA increased by 63% y/y to $14.3 million, and adjusted EBITDA surged 97% y/y to $23.3 million.
• In Q4 2023, total revenue was $26.3 million, representing 15% y/y growth.
• Recurring revenue in Q4 was $25 million, up 15% y/y.
• Net loss for Q4 was $3.6 million, compared to $1.1 million in the same period last year.
• EBITDA for Q4 was $1.1 million, and adjusted EBITDA was $2.8 million.
• Asure plans to focus on technology advancements and strategic partnerships in 2024, aiming to drive new client additions.
• The company issued guidance for Q1 2024 and FY 2024, expecting revenue and adjusted EBITDA growth.
• Asure plans to invest in research and development to benefit small business clients and provide innovative HCM solutions.

Negative

• None.

Insights

Financial Analyst

The reported financial results from Asure Software, Inc. demonstrate a significant year-over-year (y/y) revenue growth. Specifically, a 24% increase in total revenues and a marked improvement in net loss reduction from the previous fiscal year are key indicators of the company's improving financial health. The substantial jump in EBITDA and adjusted EBITDA by 63% and 97% respectively, suggests that the company is effectively controlling its operating expenses and optimizing its earnings before interest, taxes, depreciation and amortization. The provided guidance for Q1 and FY 2024, projecting further revenue growth and a healthy adjusted EBITDA margin, indicates management's confidence in continued financial performance and operational efficiency.

However, the contrast between the reported net losses in Q4 2023 compared to the same period in the previous year raises concerns about the company's profitability in the short term. This could be a point of interest for investors evaluating the sustainability of the company's growth trajectory. Additionally, the exclusion of the Employee Retention Tax Credit (ERTC) from future guidance suggests that Asure is adjusting its financial projections to a post-ERTC environment, which could impact its revenue streams and profitability margins.

Market Research Analyst

Asure's strategic focus on advancing technology through partnerships and product development, such as the 401k bundled offering with payroll and the recent invitation to join the SAP PartnerEdge Open Ecosystem, is indicative of the company's commitment to innovation and market differentiation. The emphasis on HR Compliance, a best-in-class tax platform and the Asure Marketplace™ positions the company to capture a larger market share and potentially high-margin revenue streams. This strategy aligns with current market trends, where businesses are increasingly seeking comprehensive, cloud-based HCM solutions.

The planned investments in research and development, aimed at enhancing the product offerings for small business clients and providing enterprise clients with tools to navigate complex tax laws, reflect a targeted approach to meet the diverse needs of its customer base. Asure's proactive approach to expand its annual recurring revenue through acquisitions, as evidenced by the $7 million in signed agreements, is a strong move to bolster its market position and could lead to increased investor confidence.

Legal Expert

Asure's focus on HR Compliance and its efforts to streamline payroll tax processes through the partnership with SAP could be seen as a strategic response to the increasingly complex regulatory environment. With tax laws and labor regulations constantly evolving, Asure's ability to adapt and provide compliant solutions is crucial for its client base. The integration with SAP systems is likely to enhance Asure's payroll tax engine, offering a competitive edge by simplifying compliance for existing SAP clients and potentially attracting new customers seeking robust compliance solutions.

This legal and regulatory foresight can be a significant value proposition for Asure's clients, as non-compliance can result in hefty penalties and reputational damage. By focusing on compliance, Asure not only safeguards its clients but also creates an environment of trust and reliability, which is essential for customer retention and acquisition in the HCM software market.

AUSTIN, TX / ACCESSWIRE / March 8, 2024 / Asure Software, Inc. (NASDAQ:ASUR) ("Asure" or "the Company"), a provider of cloud-based Human Capital Management (HCM) software solutions and services, released its fourth quarter 2023 and full-year 2023 financial results on February 26, 2024.

For the full year 2023, Asure reported total revenues of $119.1 million, which were up 24% y/y or 19% y/y when excluding ERTC. Recurring revenue was $99.7 million, which is y/y growth of 16% or 19% when excluding ERTC. The overall net loss of $9.2 million was a noticeable $5.3 million improvement compared to FY 2022's net loss of $14.5 million. EBITDA jumped 63% y/y to $14.3 million and adjusted EBITDA surged 97% y/y to $23.3 million.

During the fourth quarter, Asure reported total revenue of $26.3 million, which represented 15% y/y growth (excluding ERTC) or -10% y/y with ERTC. Recurring revenue came in at $25 million, which was up 15% y/y when excluding ERTC or up 4% y/y with ERTC included. The HCM service provider reported a net loss of $3.6 million, compared to a net loss of $1.1 million during the same period last year. EBITDA was reported at $1.1 million, compared to $5 million during Q4 last year. Adjusted EBITDA came in at $2.8 million compared to $6 million during Q4 2022.

Asure Chairman & CEO Pat Goepel: "We are excited to build on the success we had during 2023 in multiple areas of our business. During 2024 we plan to continue this momentum and our focus will be on advancing our technology with leading partnerships and strategic sales initiatives such as the 401k bundled offering with payroll, which was launched in the fall of 2023 and thus far has produced positive results, to help drive new client additions. We continue to advance our technology with partnerships as evidenced by the recent invitation to join the SAP PartnerEdge Open Ecosystem. The partnership with SAP will allow Asure to enhance its payroll tax engine by integrating with the SAP systems and streamlining payroll tax processes for its existing SAP clients. Our focus on areas of differentiation, such as HR Compliance, our best-in-class tax platform, and our Asure Marketplace™, is anticipated to account for an increasing share of our revenue moving forward into 2024 and is expected to generate high-margin revenue streams during 2024."

Management also took the opportunity to issue Q1 2024 and FY 2024 guidance for revenue and adjusted EBITDA:

Guidance Range			Q1-2024			FY-2024
Revenue		$	30.0 M - 32.0 M			$	125.0 M -129.0 M
Adjusted EBITDA(1)		$	6.0 M -7.0 M				20% - 21%

These forecast operates under the assumption that the ERTC program will continue to be paused for the foreseeable future and thus are not included in the guidance.

Mr. Goepel continued: "We expect that the growth of our business will continue during 2024 and our expectation is for performance on a combination of organic and inorganic basis. We have signed agreements to purchase approximately $7 million dollars of annual recurring revenue so far and the pipeline is strong. We plan to continue to invest in research and development of products that we believe will benefit our small business clients and enable them to leverage our expertise more effectively. Our enterprise clients have access to new tools which will aid them in moving money and navigating the ever-changing and increasingly complex tax law environment. We will continue to provide innovative HCM solutions that help small businesses thrive, HCM providers grow their base, and large enterprises streamline tax compliance."

For more information about the company's services, latest news, and ongoing initiatives, visit https://www.asuresoftware.com and https://spotlightgrowth.com/moving-past-ertc-asure-nasdaq-asur-reports-meaningful-growth-in-q4-and-fy-2023/

About Asure Software

Asure Software (NASDAQ:ASUR) provides cloud-based Human Capital Management (HCM) software solutions that assist organizations of all sizes in streamlining their HCM processes. Asure's suite of HCM solutions includes HR, payroll, time and attendance, benefits administration, and talent management. The company's approach to HR compliance services incorporates AI technology to enhance scalability and efficiency while prioritizing client interactions. For more information, please visit www.asuresoftware.com.

About Spotlight Growth

SpotlightGrowth.com is a digital hub for micro-caps, small-caps, venture capital, private equity, crowdfunding, cryptocurrency, and other emerging growth investors. SpotlightGrowth.com serves as our media subsidiary and provides insights on small-cap companies. Follow us on social media: Twitter; Facebook; Instagram; Reddit; and YouTube.

Disclaimer

This communication was produced by Spotlight Growth (SG), an IR advisor to small and micro-cap companies. SG is not a registered or licensed broker-dealer or investment adviser. No information contained in this communication constitutes an offer to sell, a solicitation of an offer to buy, or a recommendation of any security. SG may be compensated by respective clients for publicizing information relating to its client's securities. See https://spotlightgrowth.com/disclosures for more information.

Contact:

Asure Software
patrick.mckillop@asuresoftware.com

Spotlight Growth
info@spotlightgrowth.com

SOURCE: Asure Software

View the original press release on accesswire.com

FAQ

What were Asure Software, Inc.'s total revenues for full-year 2023?

Asure Software, Inc. reported total revenues of $119.1 million for full-year 2023, up 24% y/y.

How much was the net loss for Asure Software, Inc. in FY 2023 compared to FY 2022?

The net loss for Asure Software, Inc. improved to $9.2 million in FY 2023 from $14.5 million in FY 2022.

What was the percentage increase in EBITDA for Asure Software, Inc. in FY 2023?

EBITDA for Asure Software, Inc. jumped by 63% y/y in FY 2023.

What was the total revenue for Asure Software, Inc. in Q4 2023?

Asure Software, Inc. reported total revenue of $26.3 million in Q4 2023, representing 15% y/y growth.

What is Asure Software, Inc.'s guidance range for FY 2024 revenue?

Asure Software, Inc.'s guidance range for FY 2024 revenue is $125.0 million - $129.0 million.

What is Asure Software, Inc.'s focus for 2024?

Asure Software, Inc. plans to focus on technology advancements and strategic partnerships in 2024.

What does Asure Software, Inc. plan to invest in for small business clients?

Asure Software, Inc. plans to invest in research and development of products to benefit small business clients.

What growth does Asure Software, Inc. expect in 2024?

Asure Software, Inc. expects continued business growth in 2024.

What was the net loss for Asure Software, Inc. in Q4 2023?

The net loss for Asure Software, Inc. in Q4 2023 was $3.6 million.

What was the adjusted EBITDA for Asure Software, Inc. in Q4 2023?

The adjusted EBITDA for Asure Software, Inc. in Q4 2023 was $2.8 million.