Q1 2021 Asure Software Inc Earnings Call
Okay.
Good afternoon, and welcome to share his first quarter 2020 One earnings conference call joining.
Joining us for today's call on assurance Chairman and CEO.
Pat.
John Kim and Vice President of HR, Cheryl true ROI.
And speakers remarks, there will be a question answer session and we're now like to turn the call over to Cheryl for introductory remarks. Please go ahead.
Thank you operator, and good afternoon, everyone and thank you for joining us for <unk> first quarter, 2020, one and earnings call. After the market close we released our financial results. The earnings release is available on the SEC's website, and our Investor Relations website at Investor Day, and Ishares software on Dot Com, where you can also find the investor.
Location. It was teleconference is also being broadcast over the internet and will be archived and available on our IR website.
On our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items and description and timing of these items along with a reconciliation of non-GAAP measures to their most comparable GAAP measure can be found in our earnings release today's call will also contain forward looking statements that refer to future.
And as such involve certain risks, we encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. Finally, I would like to remind everyone. On this call will be recorded and it will be made available for replay via a link available on the Investor Relations Sir.
And of our website with that I would now like to turn the call over to Pat Campbell, Chairman and CEO, Pat. Thank you Cheryl and I'd like to welcome everyone to our first quarter earnings call. We sure appreciate your interest whether you're on an employee client investor analyst or another interested third party.
Start todays call with an update on some key metrics before reviewing business highlights for the first quarter and then John paths on our CFO will review, our financial results and provide an outlook for the second quarter 2021.
And then he'll turn back over to me and I'll provide an update on our strategy as we look to the second quarter. Then we will open it up for questions and reflecting since December 2019, when we sold the work space business.
We increased our salespeople from 33 to <unk> 64, right in the middle of on COVID-19 pandemic and I think what's really important since that kind of progress has been made this quarter was a really important inflection point for a share software because it was.
The first core quarter that we posted positive year over year revenue growth. We view this as an important inflection point and the business and an important milestone as it sets us up nicely for 2021.
Past 14 months or so have been different and any other we've experienced before the mass shutdowns and response to COVID-19 to COVID-19 forced us to find innovative ways to connect with our small and medium sized business clients and prospects and as well as our own employees to overcome these challenges.
With more than a year and passing since the pandemic began I'm very proud of how the assurant team embraced the challenges and it took a leadership role through this pandemic for example, as part of our efforts to Shepherd more than 80000, and SMB clients through the COVID-19 pandemic, we recently.
Introduced and employee retention and tax credit or what we call <unk> solution to help clients efficiently maximize the tax credit.
Do you see as part of the cares Act, which encouraged and encourages businesses to keep employees on the payroll.
Also we are enriching our partner program for book by providing.
Biding industry specific educational resources to help our CPA as our brokers and our bank referral sources grow and prosper when they grow and prosper, we grow and prosper, while our sales channels continue to be impacted by it and restrictions on face to face meetings and bill.
<unk> and decision, making by prospect prospects, we've experienced growth in many key sales metrics, we are well positioned to take advantage the opportunities as we transition back to normal market conditions conditions.
Conditions demonstrates this point our increased focus on small business continues to pay off and small business bookings, where most of the reps focus increased more than 90% year over year for the third consecutive quarter and more.
More than 60% of new sales continue to adopt multiple solutions. We also continue to add reseller partners and our total bookings this quarter increased over 20% year over year compared to the fourth quarter of 2021st quarter revenue.
Non-GAAP EBITDA and non-GAAP EPS all increased sequentially as a reminder, the first quarter and seasonally strong because this is when we recognize our year and W. Two and ACA reoccurring revenue, even after backing out the year and revenue we perform well.
Compared with the first quarter 2020, and a very tough environment. The COVID-19 pandemic is still a headwind primarily putting share on same store sales due to the sustained level of lower client employees on our platform that continues to impact our topline. This resulted.
Tempered year over year comparisons as a reminder, first quarter 2020 was only partially impacted by COVID-19 driven higher unemployment.
Drilling down into the COVID-19 impact on a monthly basis of the 1050 of our 10000 direct customers have paused last March 2020, approximately 900.
Return through March 2021, resulting in about a 1% churn in our clients our pays per control or what we call same store sales, which roughly tracks national unemployment rates was down 14% year over year and Q2 of 'twenty.
And improved to down 9% and the third quarter of 2020 and remained above that level and the fourth quarter of 2020, and the first quarter 2021. It dipped initially and then recovered a bit and March but the average for the quarter was down 13%. This is presented on.
Headwind because of normal times pays per control typically increase about 2% year over year still since we've been adding more clients than we're losing and same store sales normalize over time this will translate into increased revenue.
Lastly, new sales bookings on a dollar basis were pressured as many small businesses continue to focus on surviving adjusting their business models accordingly, instead of changing payroll providers, even if they're willing to do so however, we're pleased with the number of new clients book is increasing and with the <unk>.
Option of multiple solutions to both our investments and sales Rep and are also bearing fruit. As a reminder, we began 2020 is a transition year with 33 sales reps and at the end of first quarter 2021, We had 64, we expect to be between 75 and <unk>.
And by year at most of these new hires are very experience, bringing strong referral relationships the selling environment will likely continue to evolve with differences on a regional basis as COVID-19 cases, and reopening trajectory stabilize and we are.
Optimistic with the vaccine deployment progressing steadily our clients are and are best positioned since the pandemic started to begin making buying.
Buying decisions are niche and initiatives to reduce expenses and while accelerating our go to market and product innovation investments have positioned us very well for growth as the pandemic situation improves we have delivered solid client growth and demonstrated and our unique value.
To our clients and partners through some of the most difficult times still we believe that momentum with our business metrics will continue and the economic conditions will improve as national employment levels gradually returned to pre COVID-19 levels as for acquisitions and integration.
And of the small reseller base and northeast that we purchased in December is going well, we don't have any acquisition spending we do expect to be opportunistic and rolling up our reseller partners that white label, our human capital management solution. This is in line with our partners for life strategy, where.
Our partners can provide and referrals or a white label and resell our solutions and then join the <unk> family and is an essential small business is share remains committed to helping more than 70000 indirect and 10000 direct small business clients grow and a very challenging environment. We're committed.
And to ethical business practices, a values based culture innovation, social responsibility and leadership as well as our support for small businesses throughout the United States now I would like to hand off to John to discuss our financial results in more detail John.
Thanks Pat.
And as Sheryl mentioned at the beginning of this call and several of the financial figures discussed today are non-GAAP, you'll find the reconciliation from GAAP to non-GAAP results as part of the earnings release made available earlier today and included in our most recent investor presentation posted and the Investor Relations section on our website at assure software Dot com.
As mentioned on our last earnings call. We continue to review the metrics used to explain our business performance with a year behind us as a pure play HCM software provider. Following the separation of the workspace business and 2019. It is a good time to simplify and add clarity to our reporting with the goal of making our progress on the execution of our strategy easier.
Follow.
We believe this ultimately will require fewer GAAP to non-GAAP reconciling items to deliver that message. Additionally, we have added some additional slides to our investor presentation. We hope that this enhances the story around our results, we will continue to try and move and add more visibility and insight over the coming quarters.
Both year over year and sequential quarterly revenue comparisons are challenging this quarter for different reasons.
Year over year revenue comparisons are pressured largely due to lower volume of employees employed by our clients and ultimately paid across our HCM solutions.
And would be expected because of the comparison of pre COVID-19 results and.
And 2020 versus current gear COVID-19 impacted results.
Sequential quarter over quarter revenue comparisons need to be viewed with the acknowledgment of annual seasonal impact of year and fees and client transitions.
With those caveats in mind revenue for the first quarter increased 25% to $19 8 million from $16 4 million and the fourth quarter of 2020 and.
And four 5% year over year.
Recurring year and revenue was driven by fees generated by annual preparation through reporting regarding employee employer reporting of W to income and ACA compliance year on recurring revenue was $3 6 million and the first quarter of 2021 and drove overall revenue growth both sequentially and year over year.
And has increased from zero and the fourth quarter of 2020.
And from $3 2 million and the first quarter of 2020.
Additionally, we have added a slide to our investor deck to help visualize these revenue transitions.
Finally, as a reminder, about our seasonality the first quarter of each calendar year is seasonally strong for revenue and profitability as Youre and W. Two and ACA recurring revenue is recognized on this quarter.
And will boost we experienced this quarter does not exist and the second and third and fourth quarters.
Recurring revenue continues to represent approximately 97% of our total revenue.
Interest on client funds was approximately 400000 and the first quarter up from approximately 300000 and the fourth quarter.
The increase was primarily due to the change and the average balance of client funds held on behalf of our clients increasing from an average of 185 million and the fourth quarter to approximately $244 million and the first quarter.
As we consider the expenses I'll offer similar similar caveats regarding the expense comparisons as we previously mentioned and the first quarter of 2020, our employees had normal pay rates and benefits pre COVID-19.
Both of which were reduced.
And the fourth quarter of 2020.
To help the company manage the impact of the company's reduced revenue, we return pay rates to normal levels and the first quarter of 2021 and anticipate returning to normalized benefit levels and the second half of 2021, depending on continued economic improvement.
Compensation and benefits represent approximately 70% of our cash expenditures. So these adjustments have meaningful impact.
This quarter revenue growth has significant impact on our profitability, our sequential gross profit and the first quarter expanded by between 25% and 27% depending on whether you use GAAP and non-GAAP gross.
Gross profit as a performance metric.
First quarter 2021, EBITDA was $2 6 million, representing 13, 1% margin up from negative $1 6 million and the fourth quarter compared with the first quarter of 2020 EBITDA increased about 30% is a point and it is important to point out that while revenue increased a little over 800000.
Over year EBITDA increased by $1 5 million after taking out approximately 9000 of transition services agreement expenses related to the workspace sale.
Non-GAAP EBITDA, which also removes stock compensation and onetime expenses from EBITDA was $3 4 million.
Representing a 17, 3% margin up from the fourth quarter, $1 1 million, representing a 7% margin.
First quarter 2020 was $4 3 million on this metric, but included more than $1 8 million of one time expenses add backs versus.
Approximately 200000, and these types of add backs and the current quarter.
Turning to the balance sheet.
And we ended the quarter with cash and cash equivalents of $24 3 million.
At March 31, 2021, we had $22 6 million of debt, which is comprised of $10 million term loan.
And $8 9 million PPP loan and the balance made up of seller notes from acquisitions.
We have applied for forgiveness of the PPP loans, and we hope to receive a decision from the small business administration sometime in the next few months, but have not been given any new indication of timing of this decision.
Now I'm going to turn to guidance for the second quarter ending June 32021.
And this guidance is offered with the backdrop of a very challenging environment to predict future economic results as evidenced by the significant Miss on expected employment results last Friday, and the revisions to previous employment figures.
We are providing the following guidance.
Revenue for the second quarter of 2021 is guided to be and the range of between $16 5 million to $17 million non.
Non-GAAP EBITDA is guided to be and the range of between 700000 and 900000.
And non-GAAP EPS is guided to be between negative <unk> <unk> and negative <unk>.
While we continue to be cautiously optimistic with the potential tailwind of the improving economy, given the uncertainty of when America returns to work, we want to be prudent with how we are running the business and describing our prospects. Accordingly, we are not yet restarting annual guidance, but expect to do so on the coming quarters as we gain additional visibility.
To provide a sense of how revenue was.
<unk> by COVID-19 and relation to overall employment levels. We've included a slide on our Investor presentation, which is located at slide 28.
And as I mentioned earlier, we have also added a slide to the presentation to help bridge the revenue transitions between quarterly comparisons and Thats why just looking at slide 29.
And again, our investor presentation, located on our website and the Investor Relations section and with that I will turn the call back to Pat.
Thanks, John and I want to highlight John and the management team I think they did an excellent job with the investor presentation and I.
Think really gives a window of clarity to the business.
As we enter our second year here with COVID-19, we remain diligent and helping businesses and continue to navigate the pandemic and remain hopeful that the worst is behind us.
Throughout every stage and a pandemic, we have demonstrated our commitment to helping clients and our multifaceted response on our COVID-19 Resource Center Webinars. For example continue to help thousands of small businesses, we continue to listen to and work with small and midsized businesses to provide information.
<unk> and the support they need we have assisted our clients and quickly applying for and obtaining PPP loans. We have also helped them claim paid.
And employee retention tax credits are experienced employees have really lived assures value assume embracing change leading with integrity owning the outcome delivering awesome.
And being a good human and I give credit to the innovation integrity and hard work of our employees, who have continued to show up for our clients, even while navigating the challenges of the pandemic and theyre on personal lives.
And what this has done.
Is that it really has helped our small medium business clients get back to growth and help them navigate the complex stimulus legislation legislation.
And I'll return to office plans and create vaccination policies, we're confident that our resilient business model strong financial position and dedicated employees and leadership team will help us share finished 2021 EBIT stronger than when we started it where tick.
Particularly pleased with the trend line of revenue growth improvement.
Dropped and an 18% year over year decline and second quarter of 2020 improved to a 10% decline and third quarter 2022, a 7% decline and the fourth quarter of 2022, a four and a half growth.
And the first quarter of 2021, and as John mentioned, our core operating metrics are now at a point, where we're comfortable reintroducing quarterly guidance for the second quarter 2021, we expect revenue to be in the range of 16, and a half to $17 million. This range.
Points to year over year growth of 17% to 20% about half of this growth being organic and the other half inorganic we believe that this points to an important milestone as we march towards our strategic goal of 10% organic growth, 10% growth generated through accrete.
Acquisitions, and 20% EBITDA, which gets to share more in line with the growth and profitability margins with some of the other publicly traded SaaS human capital management companies, which carry much higher valuations internally.
We're getting back to normal we're returning to back to our vision of providing human capital management software and services that help companies grow while nurturing a culture of growth around us and our mission is to help customers grow by getting the most from their human.
Capital, We also want to help our employees growth personally and professionally grow relationships and our communities and inspire goodness and if we do all these things and a way that gross shareholder value, we'll all be happy with that we'll open it up for questions operator.
If you would like to ask a question at this time. Please press the star and the number one on your debt home.
Telephone if your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
My first question is from the line of Ryan Macdonald with Needham. Please go ahead.
Hey, guys. This is Josh on for Ryan.
Grant's on the strong quarter.
Just wanted to start off.
Our checks and some of your competitor results indicate that the market improved in the month of March is that what youre seeing as well and then how was rep productivity trending throughout the quarter.
Yes.
And I'll, let John chime in as well I think January February and do you think back we had a second wave of COVID-19. The election stimulus probably was a little bit delayed. So we saw some softness in January February March.
It is relatively strong and it started to bounce back a bit.
And.
I think that's how we saw it from a sales rep productivity perspective.
First of all we've been really happy with the reps that we've been able to GAAP, but our average tenure of the sales reps is 10 months. So it is still a journey I will tell you.
I think our reps are developing really good referral sources.
And we're learning how to sell digitally and have done a really nice job on a tough environment and we were cautiously optimistic debt as America reopens, we'll keep gaining productivity, but to be up bookings over 20% and the first quarter year over year I was very happy with our sales Rep performance.
Thats the I agree with pads assessment it was low.
Choppy January February but it does come back in March.
We're talking and May right. So we've already forgotten the spike that happened kind of in that timeframe. So.
It did come back loaded in March.
Okay, Great and then.
Following up on that how should we think about the slower return to work that we were all very well aware of here given what's happened and the last week.
Particularly and the troubled industries impacting youre seeing same store sales later in the year here and then can we get some more color on on.
How you are factoring that into Q2 guidance here on what assumptions you're using thank you.
Yes.
And in general we are not.
We're not counting on a table on a huge improvement work at our modeling steady state if you will.
I do think and the back half of the year towards September we may have an opportunity that employment levels will start to go up a bit, but we'll take that on third quarter second quarter's call.
But as far as modeling second quarter, we've really kind of looked at it is.
We're open for business, we're going to continue to drive results and keep feeling a trajectory that we have but we're not expecting anything.
More natural and that.
Yes.
Thanks, guys.
Thanks, Josh.
Your next question is from the line of Richard Baldry with Roth Capital. Please go ahead.
Thanks.
Firstly could you talk about what youre seeing at the leading edge of your pipeline for your marketing funnel and whether there's material changes to that and how thats been trending.
And then the.
On a on easy one, but R&D was sort of flattish year over year below where it and trending last several quarters is this sort of a new level to base off of or is there anything unusual and that number.
I don't think ill answer that first question first and then ill or that last question first and then I'll turn it over to Pat There was I think a little bit more capitalize this quarter and it kind of just various depend on what projects we're working on so.
So I think thats, probably the transition more than anything and I don't think that you should read anything more into it and that.
I think the levels are fairly consistent year over year that would agree with John and Ed I think as far as the leading edge of the funnel what I would say rich is I do think we're working on and some really interesting stuff.
And some maybe bigger transformational kind of accounts, but they're early in the pipeline and it's really a factor of some of our either resellers or some of our value added partners are now turning to hey, I have.
Hundreds of clients boy I could do something more meaningful let's talk to assure so I think were and the early innings of some pretty nice sales opportunities, but I don't anticipate anything and media to that but thats, what I would say towards the back half of two.
2021 or 2022.
Certainly have some interesting opportunities so we'll see how those play out.
And the last from me is can you maybe dig into the M&A backdrop, a little bit I'm sort of curious whether COVID-19 altered some of the willingness of people to entertain the concept to sale or how it changes your ability even to evaluate those companies given their 2020 results would look a lot different and they might have otherwise.
Thanks.
Yes, just where we are and our business, we're really focusing on our employees our clients getting back to normal.
We're built the business to scale and we're going to take advantage of some opportunities to do that.
I would say right now we have some opportunities I think and the back half of the year you will see some of those opportunities I think and this first half of the year, we kind of want to finish what we started.
Pointing towards double digit growth.
Have a plan to do that and and we anticipate to get there in 2021.
And I think youll layer tuck in acquisitions as we go as far as expectations I do think people whether its capital gains are or perhaps some of the new legislation. They are evaluating their options and then as far as COVID-19 I think we've been able to understand the COVID-19 impact on small and medium size.
Businesses as well as anybody being a provider and then we have a window into some of our resellers and other businesses of how it affected them. So from a pricing strategy, sometimes it just really understanding that and understanding and matching expectations I do think youll see some deals.
And we get it to and a 2021 and 2022.
Congrats on the return to growth and the guide for strong growth and the second quarter.
Rich. Thank you appreciate it.
Yes.
Your next question is from the line of Eric <unk> with Lake Street. Please go ahead.
Yes, I wanted to focus on the pay per controls debt and when we start to see recovery, there and I know a year ago. This time you were doing.
And.
And daily War room or would the expression for the.
Concentrating on the installed base was but what are your expectations, there and given we had this 13% step down in Q1.
And look in Q2.
Yes, I'm going to go I'll, let John jump into first of all we do a daily call.
Is that am every day on <unk> runs that call with the management team.
And.
Really proud of.
And everybody is showing up and and really given us the data we need to.
To match, our customer base and make sure that we're in sync with them, what I would say and the second quarter early on.
There's two stories here first of all from a client perspective, but I think back to last year companies really didn't know what to do where they are going to go back and the business or are they going to go out of business. They need and funding are they going to get it from the government area and get it from their favorite Oncall is their institution.
Troy and their credit line and they really didn't know what I would say is there has been a return to normalcy, we lost probably one to one 5% of our business because of COVID-19.
But I think the more important stat now as the employees and when do the employees return to work and we're not soothsayers. So we don't know the future what I would tell you is our second quarter was down we had improvement and the third quarter fourth quarter installs and if you think of it.
The election, and first quarter there was.
There was a second wave or third wave of COVID-19 that really reduced employment and that December January February timeframe. I think the vaccine has certainly helped but now what you're seeing is.
With the stimulus and.
And employees get paid extra.
To navigate some of the unemployment now that there are jobs to open.
There has been some times.
Non of workforce, our steady workforce, and then and in some cases or supply chain challenges and then finally.
I think you just if we look at some of the early indicators if youre thinking about hiring people. Your first step is going to pay more over time to make sure you have demand and then new higher so I don't think we've seen and returned to normal yet.
I do think digital will maybe some jobs will be lost forever, but will create other jobs and there'll be more employment opportunities we've modeled some slight improvement.
We look into September.
But not until then and John I don't know if you want to add any color.
And here for the full impact and the second quarter of last year, obviously, but I've tried to educate myself on the business and what I saw was a huge obviously decline and the employees served and the second quarter of last year, It's come back as Pat mentioned, but it's nowhere close to where it was pre COVID-19 in terms of the overall employment law.
<unk> and the client accounts for roughly the same.
But when we look at the overall employee served and those employees are still dramatically different than pre COVID-19.
And when that comes back and normal I guess is anybody's guess and.
Clearly the economists are missing it as well so theres tons of obviously demand out there.
But it's unclear as to when that when the employees actually and show back up again, and I think for US I think what's important is we've modeled continued business improvement despite that uncertainty.
No just.
When I had two appointments recently won at the Barber a year and a half ago that that same time I go on a late Sunday afternoon. After the Packer game, there's 12, barbers and net share a year and a half ago. There were three this year those nine employees for our business, that's top and bottom line.
And we don't.
And we Havent same customer service people based on the companies that we serve so that'll be accretive when they return we can't wait for them to return, but what we can model the business and run the business even if they don't return quickly second dentist's office.
And the dentist is doing on oral surgery the debt.
And I'll hygienist have that quite yet gotten back to employment they are increasing their hours, but that anywhere near what that is so that's an example, the two type of businesses that unemployment does come back.
That'll be a good opportunity for us topline and Bottomline.
And we're going to be cautious and modeling Napa and when it does it'll be a nice tailwind for us and again just to close out past point I mean, we're trying to focus on things we can control right. We can't control the overall economy and when people I'll go back to work, but we're trying to do the right things to take care of the business and the interim.
And that takes me to my next question, which is on the gross profit.
Gross margins were up nicely here any one timers to the good that we should be aware of we think about gross profit margin for Q2.
And then it'll be fairly consistent.
There is not a one timer I think it will get pressured potentially and the second half as we start with the benefits back on.
I guess, we'll get to that point, when we start talking about the third and fourth quarter.
But I don't think anything extraordinary changing.
Between this quarter and next year, Eric I, just think seasonally a little bit the W. Two and ACA revenue is the same every year and the first quarter.
And as John mentioned, we we've restored pay cuts and the first quarter to normal levels from unemployed perspective, and the second half of the year, we want to restore bonus and.
And 401 K match. So we're excited about that but that will probably put a little bit of a damper on gross margin improvement that being said.
We are getting more efficient and our operations I've been very proud about the group that's doing the work I think we're getting a higher level of standardization harmonization of how we do business, we're getting efficiencies and our software and our technology projects.
And that coupled with the.
The economy, if we get a boost will help gross margins as well and that's a fair.
Your point and I think I was looking on it more from a cost of sales perspective, not changing dramatically, but youre right absolute dollars and potential <unk> moving down with the transition revenue that's fair.
I understand thanks for taking my questions. Thanks, Eric we really appreciate it.
Your next question is from the line of Derrick Wood with Cowen and company. Please go ahead.
Yeah.
Oh, great. Thanks for taking my questions.
And I was just wanted to ask about the focus on mid market versus kind of SMB and smaller organizations, particularly as you onboard new reps and it seems like you could.
Yes go after target smaller companies with kind of a higher volume level of new customers or our target.
Mid market customers, where there's bigger asps, but perhaps maybe lumpier deal flow so what's the.
What's the strategic focus, particularly with a lot of the new reps on boarding.
And so there it gets a little bit of both right and and I think when you think about our partnering strategy and we've been very strong with the banks the cpas and the benefit brokers. They will vary off and bring to you whether it's clients 10 clients at a time 50 clients on a 100.
And we want to make sure we're very clear and we're not going to be and the enterprise of the large and to the marketplace for payroll, but when you have the opportunity to gain somebody's book of business you want to be able to serve their book of business, because they don't want to and possible go to two or three providers.
And we think we have a unique capability backed our mid market product. We're really excited about it and we've had some really good partner activity and that product and the capability.
And is as strong so we have opportunity to grow and both areas, but from a small business perspective, we've chosen the start there.
If you think about kind of getting partners and getting clients, we want to get the vast majority of those small businesses over quickly and we saw some opportunities and the middle of the pandemic now what we're also doing is taking a second stage and growing the mid market. So we strategically graph.
<unk> and our small business. This next stage over the second half of the year and 2022 will add more and the middle market, but we feel really good about the capability of both both our product lines and then when we prosecute the strategy around partners, we want to make sure that if we get 100.
Clients, we can get all 100 of on served on behalf of our partner.
Yes that makes sense and maybe kind of a follow on would just be the.
Maybe give us what your sense is and the competitive market and competitive landscape and <unk>.
Compare and contrast, maybe how that was six 912 months ago.
Yes, I think when you think about human capital management, I mean, clearly the I think the upper end of the marketplace I've been in this industry 30 years.
He is a bit crowded and theres some world class companies in that upper marketplace and I think there there is a number of clients or competitors that are fighting each other and that space I really like the small medium sized business I think first of all.
We have good market adoption and good market opportunity to get share I think and some of the tier two tier three cities, it's still underserved and I think we have the opportunity to grab market share and continue to do that and I think we're following a model that is very profitable in that segment.
And the marketplace and then as far as the need and especially with COVID-19 I think people are coming out of COVID-19 and they're wanting increased.
Last year was survival this year and say, how do I grow and grow digitally and I think theres going to be more opportunities for years to come.
That's great. Thanks for the color thanks, guys.
Thank you Derek.
And your next question is from the line of Jeff and January with Craig Feldman. Please go ahead.
Hey, guys. This is Rudy on for Jeff just one from me.
Thank you mentioned youre seeing some some good multi product.
And good cross sell bundling.
And the quarter could you just go into a bit more color on what modules are seeing strong attach rates.
Time and attendance and <unk>.
Our book.
Both are increasing and then what I would say our tax product and and money move that we do feel is embedded and has some opportunities and the future as well. So we feel really good about.
Those product sets that we're seeing.
Great. Thanks.
Thank you.
And your next question is from the line of debt.
Colo with Barrington Research. Please go ahead.
Yes, Pat did.
Did you add any resellers organically and the quarter and what are your thoughts about.
Going forward, adding reso's organically.
Well first of all we're always willing and able to add resellers, we almost look at it first of all we.
We have a lot of we're underserved and a lot of tier two and tier three cities.
And the United States. So we've identified probably a 100 cities, where we'd like to go to with the right retailer partner.
We've probably added about three or four in this first quarter.
We want to make sure and I and we do believe that as especially as we get to the second half of the year. Some of the resellers with COVID-19, if you're starting a business. Its tough this funded business and startup business and the middle of COVID-19.
So I do think you'll see that we'll get some resellers and the second half of the year or first part of 2022.
And I think there'll be a return to normalcy, there and then I do think some.
And folks that have been and reselling for us for a while we will look at potentially capital gains on some of the other taxation, where they might want to strategically partner and exiting the business and 20 late 2021.
To make sure that they're tax efficient as well so it's kind of a constant pursuit.
And we're opening cities, we want to build a presence in those cities and then as we do strategically we can welcome them to the assured family and and get the growth that we're building and this business. So that's definitely part of our strategy.
As you move forward hiring incremental.
Incremental salespeople this year and you said the mix may change more towards the mid size.
Because.
Whats your gut instincts will you be able to hire.
People at the same level of tenders as you did last year.
I think so last year, we had an opportunity with the.
On the acquisition of Cop, you pay by ADP, where we were fortunate that culturally we had some good sales reps that we could add but we're fortunate and that we have a management team.
And President and Chief revenue Officer, <unk> Goldstein, our chief of staff, Todd will lead ski by itself.
Others that have been and the industry.
30 years 20 years, 15 years 10 years and with that what happens is you you work was really some special people and so it's always it's hard to get really good salespeople.
But by the same token when you have 10, a closer run pretty deep you have opportunities to get talent and what we feel really good about as we as we grow our business and really focus our business that talents becoming available and.
Luck is preparation meeting opportunity and we think we have an environment, where we could get some good people working for us and we can do something special and so that's how we see it.
Thanks Pat.
That's always appreciate your time thank you.
And Im showing no further questions at this time I would like to turn the call back to Pat for closing.
Yes. Thank you so much and I appreciate everybody.
And being on our call today, I think just a couple of takeaways.
<unk> environment.
Play and we knew that this was going to be a tough environment by the same token we could see the other side and when you think about the progress we've made with today and revenue growth.
First of all pre COVID-19 compare versus post COVID-19 that really bodes well for the future I think you're going to see more revenue growth and more growth and the assure business going forward.
I think the trajectory we're on when you think about some of the results we showed and the second quarter 2020 to now we have some really good momentum and the business. Despite having some tough times and some uncertainty with COVID-19.
I'm really confident that as we go through the year and go through next year investors clients shareholders and employees are going to be very fortunate that they stayed with the share because I think we're going to make some great things happen. So I. Appreciate your time today and look forward to talking to you alive next time.
This concludes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.
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