Q3 2025 Asure Software Inc Earnings Call

Speaker #3: Good afternoon , and welcome to Usher's Third quarter 2020 earnings conference call . Joining us . Today's call are chairman and CEO Pat Kipple , chief Financial officer John Pence , and vice president of investor relations , Patrick McKillop .

Speaker #3: Following their prepared remarks , there will be a question and answer session for the analyst and investors . I would now like to turn the call over to Patrick McKillop for introductory remarks .

Speaker #3: Please go ahead , sir .

Speaker #4: Thank you . Operator . Good afternoon , everyone , and thank you for joining us for our third quarter 2020 earnings results call .

Speaker #4: Following the close of the markets , we released our financial results . The earnings release is available on the SEC's website and our investor Relations website .

Speaker #4: Investor . Where you can also find the investor presentation . During 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 .

Patrick McKillop: During 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. A description and timing of these items, along with a reconciliation of non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release. Today's call will also contain forward-looking statements that refer to future events and, as such, involve some risks. We use words such as "expects," "believes," and "may" to indicate forward-looking statements. 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. I will hand the call over to Pat in a moment, but I just wanted to take a moment to remind people of our upcoming investor relations activities.

Speaker #4: A description and timing of these items, along with the reconciliation of non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release.

Speaker #4: Today's call will also contain forward looking statements that refer to future events , and as such , involve some risks . We we use words such as expects , believes and may to indicate forward looking statements , and 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 .

Speaker #4: I will hand the call over to Pat in a moment, but I just wanted to take a moment to remind people of our upcoming investor relations activities during the month of November. We will be attending the following conferences.

Patrick McKillop: During the month of November, we will be attending the following conferences: on November 18, the Craig Hallum Alpha Select Conference in New York; on November 19, the ROTH Technology Conference in New York; and the Stephens Conference in Nashville. On November 20, we will attend the Needham Technology Conference in New York. On December 16, we will participate in the Northland Growth Conference, which is being held virtually. We also expect to schedule some additional non-deal road shows. Investor outreach is very important to Asure Software Inc., and I would like to thank all of those that assist us in our efforts to connect with investors. Finally, I would like to remind everyone that this call is being recorded, and it will be made available for replay via a link available on the investor relations section of our website.

Speaker #4: On November 18th, the Craig-Hallum Alpha Conference in New York. On November 19th, the Roth Technology Conference in New York and the Stevens Conference in Nashville.

Speaker #4: On November 20th , we will attend the Needham Technology Conference in New York . On December 16th , we will participate in the Northland Growth Conference , which is being held virtually .

Speaker #4: We also expect to schedule some additional non-deal roadshows. Investor outreach is very important to us to assure, and I would like to thank all of those that assist us in our efforts to connect with investors.

Speaker #4: Finally , I would like to remind everyone that this call is being recorded and it will be made available for replay via a link available on the Wrestler Relations section of our website .

Speaker #4: With that , I would now like to turn the call over to Pat Kepple , chairman and CEO . Pat .

Patrick McKillop: With that, I would now like to turn the call over to Patrick Goepel, Chairman and CEO. Thank you, Patrick, and welcome, everyone, to Asure Software Inc.'s Q3 2025 earnings results call. I am joined on this call by our CFO, John Pence, and we will provide a business update for our Q3 2025 results, as well as our outlook for the remainder of 2025, plus our initial guidance for 2026. Following our remarks, we'll be available to answer your questions. We're pleased to report that our Q3 revenues were very strong, coming in at $36.3 million, a 24% increase versus the prior year Q3. Our revenues reflect what we believe is an inflection point of increasing growth, which was broadly based across all our product lines, such as payroll, benefits, recruiting, time and attendance, as well as our payroll tax management business.

Speaker #5: Thank you . Patrick , and welcome everyone to Assure Software's third quarter 2020 earnings results call . I am joined on this call by our CFO , John Pence , and we will provide a business update for our third quarter 2020 results , as well as our outlook for the remainder of 2025 , plus our initial guidance for 2026 .

Speaker #5: Following our remarks , we be available to answer your questions . We're pleased to report that our third quarter revenues were very strong coming in at $36.3 million , 24% increase versus the prior year .

Speaker #5: Third quarter . Our revenues reflect what we believe is in and inflection point of increasing growth , which was broadly based across all our product lines , such as payroll , benefits , recruiting time and attendance , as well as our payroll tax management business , organic growth in the third quarter improved sequentially from the second quarter , and we're forecasting continue improvement in the future .

Patrick McKillop: Organic growth in Q3 improved sequentially from Q2, and we're forecasting continued improvement in the future. Our performance this quarter is reflective of what we believe is strong demand for human capital management products from business owners of all sizes. Our recent acquisition of Latham Time is also performing well, and our team is continuing to work on achieving revenue and cost synergies going forward, which we believe can be obtained over the next 12 months. As a reminder, we believe the addition of Latham will further increase cross-selling opportunities for us and quicken the pace at which we can get new payroll clients started. As we've discussed during the past earnings calls, we have made investments in order to improve our technology, as well as integrate the different point solutions we have acquired over the past few years.

Speaker #5: Our performance this quarter is reflective of what we believe is strong demand for human capital management products from business owners of all sizes .

Speaker #5: Our recent acquisition of Latham Time is also performing well, and our team is continuing to work on achieving revenue and cost synergies going forward, which we believe can be obtained over the next 12 months.

Speaker #5: As a reminder, we believe the addition of Latham will further increase cross-selling opportunities for us and quicken the pace at which we can get new payroll clients started.

Speaker #5: As we have discussed during the past earnings calls, we have made investments in order to improve our technology as well as integrate the different point solutions we have acquired over the past few years.

Speaker #5: Today , we are excited to announce that we recently launched a new client interface , which we call assure Central . Assure central will offer clients a new experience with a brand new look and feel , and improve their workflow , as well as enable us to amplify items such as event driven marketing efforts .

Patrick McKillop: Today, we are excited to announce that we recently launched a new client interface, which we call ASURE Central. ASURE Central will offer clients a new experience with a brand new look and feel and improve their workflow, as well as enable us to amplify items such as event-driven marketing efforts. We believe that this new client experience will also further accelerate the rate at which we can drive our cross-selling or attach rates with more than our 100,000 clients going forward. Our team has just started this rollout in the past week with our direct clients, and we plan to introduce it to our indirect clients soon. Our bookings for the Q3 declined by 41% versus a year ago due to large enterprise deals, which were booked in the Q3 of 2024. Excluding those deals from the comparison, our bookings were up 21%.

Speaker #5: We believe that this new client experience will also further accelerate the rate at which we can drive our cross-selling or attach rates with more than our 100,000 clients going forward , our team has just started this rollout in the past week with our direct clients , and we plan to introduce that to our indirect clients soon .

Speaker #5: Our bookings for the third quarter declined by 41% versus the year ago , due to large enterprise deals , which were booked in the third quarter of 2020 for excluding those deals from the comparison , our bookings were up 21% .

Speaker #5: Now , I would like to hand it off to John to discuss our financial results in more detail as well as our guidance .

Patrick McKillop: Now, I would like to hand it off to John to discuss our financial results in more detail, as well as our guidance. John? Thanks, Pat. As Patrick mentioned at the beginning of this call, several of the financial figures discussed today are given on a non-GAAP or adjusted basis. You will find a description of these GAAP to non-GAAP reconciliations in the earnings release that was made available earlier today. The reconciliations themselves are also included on our most recent investor presentation posted in the investor relations section of our website at investor.asuresoftware.com. Now onto the Q3 results. Q3 total revenue was $36.3 million, increasing by 24% compared to the prior year period. Recurring revenues for the Q3 grew 11% versus the prior year to $31.8 million. Our professional services and hardware revenue was $4.4 million in the Q3, compared to $700,000 in the Q3 of last year.

Speaker #5: John . Thanks , Pat .

Speaker #6: As Patrick Goepel mentioned at the beginning of this call, several of the financial figures discussed today are given on a non-GAAP or adjusted basis.

Speaker #6: You will find a description of these GAAP to non-GAAP reconciliations in the earnings release that was made available earlier today . The reconciliations themselves are also included in our most recent investor presentation , posted in the Investor Relations section of our website at investor Software .

Speaker #6: Com . Now on to the third quarter results . Third quarter total revenue was 36.3 million , increasing by 24% compared to the prior year period .

Speaker #6: Recurring revenues for the third quarter grew 11% versus the prior year , to 31.8 million . Our professional services and hardware revenue was 4.4 million in the quarter , compared to 700,000 in the third quarter of last year .

Speaker #6: A majority of the revenue growth in this category was driven by hardware sales tied to our recent acquisition of Latham , time , our organic growth improved sequentially to approximately 4% in the third quarter , compared to 1% in the second quarter .

Patrick McKillop: A majority of the revenue growth in this category was driven by hardware sales tied to our recent acquisition of Latham Time. Our organic growth improved sequentially to approximately 4% in the Q3, compared to 1% in the Q2. The impact of HRC/ERTC-related churn in the Q2 was 4%, and in the Q3 it was 3%. In summary, our organic growth, excluding HRC/ERTC-related churn in the Q3, was 7%, compared to 5% in the Q2. Float revenue was down slightly versus the prior year due to previous rate reductions made to the federal funds rate, partially offset by an increase in client funds. Regarding our outlook for interest rates, yesterday the Federal Reserve cut rates by a quarter point, and we are now modeling another quarter point interest rate cut in the remainder of this year.

Speaker #6: The impact of HRC Irtk related churn in the second quarter was 4% , and in the third quarter it was 3% . So in summary , our organic growth , excluding HRC Irtk related churn in the third quarter was 7% .

Speaker #6: Compared to 5% in the second quarter . Float revenue was down slightly versus prior year due to previous rate reductions made to the federal funds rate , partially offset by an increase in client funds .

Speaker #6: Regarding our outlook for interest rates yesterday , the Federal Reserve cut rates by a quarter point , and we are now modeling another quarter point interest rate cut in the remainder of this year .

Speaker #6: We believe that as our client fund balances increase , this will help offset some of these rate cuts . Our cross-selling efforts showed good results this quarter with our attach rates , which measure clients that take more than one product continuing to move higher sequentially in the low single digits versus second quarter gross profit for the third quarter increased to 23.1 million versus 19.7 million in the prior year .

Patrick McKillop: We believe that as our client fund balances increase, this will help offset some of these rate cuts. Our cross-selling efforts showed good results this quarter, with our attach rates, which measure clients that take more than one product, continuing to move higher sequentially in the low single digits versus Q2. Gross profit for the Q3 increased to $23.1 million versus $19.7 million in the prior year Q3. Gross margins for the Q3 were 64% compared with the prior year at 67%. Non-GAAP gross margins for the Q3 were 70% compared to the Q3 of the prior year at 73%. Our overall gross margins were down due to revenue mix, as we experienced an increase in lower margin non-recurring sales, primarily driven by the recent Latham Time acquisition. Net loss for the Q3 was $5.4 million versus a net loss of $3.9 million during the prior year.

Speaker #6: Third quarter gross margins for the third quarter were 64%, compared to the prior year at 67%. Non-GAAP gross margins for the third quarter were 70%, compared to the third quarter of the prior year, at 73%.

Speaker #6: Our overall gross margins were down due to revenue mix as we experienced an increase in lower margin , non-recurring sales , primarily driven by the recent Latham acquisition .

Speaker #6: Net loss for the third quarter was 5.4 5.4 million . Versus a net loss of 3.9 million during the prior year . EBITDA for the third quarter was 3.9 million , up from 2.2 million in the prior year .

Patrick McKillop: EBITDA for the Q3 was $3.9 million, up from $2.2 million in the prior year. Adjusted EBITDA for the Q3 increased 49% to $8.1 million from $5.4 million in the prior year, and our adjusted EBITDA margin was 22%, an increase of 300 basis points compared to 19% in the prior year. Turning now to the balance sheet, we ended the Q3 with cash and cash equivalents of $21.5 million, and we have debt of $70.4 million as of September 30, 2025. As we discussed on prior earnings calls during 2025, we have and continue to invest in our technology and our product offerings to achieve our continued revenue growth and improve profitability goals. We continue to model for a relatively stable cost structure for the remainder of this year and into 2026. Our Q4 and 2025 full-year preliminary 2026 guidance is based on continued positive momentum in our business.

Speaker #6: Adjusted EBITDA for the third quarter increased 49% to 818. 1 million , from 5.4 million in the prior year , and our adjusted EBITDA margin was 22% , an increase of 300 basis points compared to 19% in the prior year .

Speaker #6: Turning now to the balance sheet, we ended the third quarter with cash and cash equivalents of $21.5 million, and we have debt of $70.4 million as of September 30th, 2025.

Speaker #6: As we discussed on prior earnings calls during 2025 , we have and continue to invest in our technology and our product offerings to achieve our continued revenue growth and improve profitability goals .

Speaker #6: We continue to model for a relatively stable cost structure for the remainder of this year and into 2026 . Our fourth quarter and 2025 full year preliminary 2026 guidance is based on continued positive momentum in our business .

Speaker #6: Now, in terms of guidance for the fourth quarter of 2025, we are expecting fourth quarter revenues to be in the range of $38 million to $40 million.

Patrick McKillop: Now, in terms of guidance for the Q4 of 2025, we are expecting Q4 revenues to be in the range of $38 million to $40 million, and adjusted EBITDA for the Q4 is expected to be between $10 million and $12 million. Therefore, our full-year 2025 results should be between $139 million to $141 million in revenue, with adjusted EBITDA margins of between 22% and 23%. Today, we are also providing our initial view on 2026 revenue, which we believe will be between $158 million and $162 million, with adjusted EBITDA margins of between 23% to 25%. Our belief is that at these higher revenue levels, combined with a consistent cost structure, we will begin to deliver consistent GAAP profitability. In conclusion, we are excited about the remainder of 2025 and look forward to 2026 being an inflection point for Asure Software Inc.'s business.

Speaker #6: And adjusted EBITDA for the fourth quarter is expected to be between 10,000,012 million . Therefore , our full year 2025 results should be between 100 and 30 9 million to 141 million in revenue , with adjusted EBITDA margins of between 22% and 23% today .

Speaker #6: We are also providing our initial view of 2026 revenue , which we believe will be between 158 million and 162 million , with adjusted EBITDA margins of between 23 to 25% .

Speaker #6: Our belief is that at these higher revenue levels , combined with a consistent cost structure , we will begin to deliver consistent GAAP profitability .

Speaker #6: In conclusion , we are excited about the remainder of 2025 and look forward to 2026 being an inflection point for assures business . With that , I will turn the call back to Pat for closing remarks .

Patrick McKillop: With that, I will turn the call back to Pat for closing remarks. Thanks, John. We are pleased to have delivered strong results in the Q3 of 2025. Our business has performed well during the first nine months of the year, and we're excited about the future. We believe that we're at an inflection point in the business with all the hard work we've done to improve our product offerings, invest in our technology, and integrate acquisitions. We will continue to increase our growth organically while potentially being GAAP profitable in Q4 of 2025 and for the year 2026, both of which are important milestones for the business. As we look forward to 2026, we'll continue to grow organically, invest in sales and marketing, roll out technology, and look to acquire value-creating opportunities. We're not slowing down. Our guidance for 2026 implies continued improving organic growth and margin improvement.

Speaker #5: Thanks , John . We are pleased to have delivered strong results in the third quarter of 2025 . Our business has performed well during the first nine months of the year , and we're excited about the future .

Speaker #5: We believe that we are at an inflection point in the business. With all the hard work we've done to improve our product offerings, invest in our technology, and integrate acquisitions, we will continue to increase our growth organically while potentially being gap profitable.

Speaker #5: In Q4 of 2025 . And for the year 2026 , both of which are important milestones for the business . As we look forward to 2026 , we'll continue to grow organically , invest in sales and marketing , roll out technology and look to acquire value , creating opportunities .

Speaker #5: We're not slowing down our guidance for 2026 implies continued improving organic growth and margin improvement . We're well on our way to our medium term plan of between 180 to 200 million in revenues , where we believe we can achieve adjusted EBITDA margins of 30% .

Patrick McKillop: We're well on our way to our medium-term plan of between $180 million to $200 million in revenues, where we believe we can achieve adjusted EBITDA margins of 30% plus. We are super excited about the launch of ASURE Central, which we believe is going to be a major enhancement to our client experience. Our R&D team has spent an enormous amount of time on this development, and I would like to thank them for their efforts. ASURE Central is the latest in this list of the many accomplishments we achieved during this past year. In summary, we're very pleased to have delivered a strong performance in Q3. The outlook for a combination of improved organic growth, more free cash flow, and potential GAAP profitability, we believe, is a great recipe for success. We continue to work diligently on creating increased value for our shareholders and our stakeholders.

Speaker #5: Plus , we are super excited about the launch of the Sure central , which we believe is going to be a major enhancement to our client experience .

Speaker #5: Our R&D team has spent an enormous amount of time on this development , and I would like to thank them for their efforts .

Speaker #5: A central is the latest in this list of the many accomplishments we have achieved during this past year. In summary, we're very pleased to have delivered a strong performance in Q3.

Speaker #5: The outlook for a combination of improved organic growth, more free cash flow, and potential GAAP profitability, we believe, is a great recipe for success.

Speaker #5: We continue to work diligently on creating increased value for our shareholders and our stakeholders . We'll continue to provide innovative human capital management solutions that help businesses thrive .

Patrick McKillop: We'll continue to provide innovative human capital management solutions that help businesses thrive, human capital management providers grow their base, and large enterprises streamline their tax compliance. Thank you for listening to our prepared remarks. With that, I will send a call back to the operator for the Q&A session. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. We ask that analysts limit themselves to one question and a follow-up so that others may have an opportunity to ask questions as well.

Speaker #5: Human capital management providers grow their base, and large enterprise is streamlined. Their tax compliance. Thank you for listening to our prepared remarks.

Speaker #5: So with that, I will send the call back to the operator for the Q&A session. Operator.

Speaker #3: Thank you . We will now be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .

Speaker #3: A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #3: For participants using speaker equipment , it may be necessary to pick up your handset before pressing the star key's . We ask that analysts limit themselves to one question and a follow up so that others may have an opportunity to ask questions as well .

Speaker #3: One moment please . While we pull for questions . Our first question comes from Joshua Reilly with Needham and Co . Please proceed with your question .

Patrick McKillop: One moment, please, while we pull for questions. Our first question comes from Joshua Reilly with Needham & Company. Please proceed with your question. All right. Great. Thanks for taking my questions and nice job on the quarter here. I just wanted to hit on the 2026 outlook to start with here and get a better understanding of what are you assuming in terms of the traditional organic growth and enhanced organic growth assumed in the trends there. Along with that, how are you thinking about where the balance sheet is at today to kind of continue the reseller acquisitions at a pace that you have been going at in the first half of this year and what you were doing in 2024? Yeah. I'll answer that. Hey, Josh, this is John. I'll go first and let Pat kind of annotate.

Speaker #7: All right . Great . Thanks for taking my questions . And nice job on the quarter here . I just wanted to hit on the 2026 outlook to start with here .

Speaker #7: And get a better understanding of what are you assuming in terms of the traditional organic growth and enhanced organic growth assumed in the trends there and then along with that , how are you thinking about where the balance sheet is at today to kind of continue the reseller acquisitions at a pace that you have been going at in the first half of this year , and you know what you were doing in 2024 ?

Speaker #6: Yeah , I'll answer that . Hey , hey , Josh , this is John . I'll go first and let Pat kind of annotate .

Speaker #6: I , we feel pretty good about where the balance sheet sits right now . We'll be opportunistic . Like we always are in terms of , you know , doing the tuck in deals .

Patrick McKillop: I think we feel pretty good about where the balance sheet sits right now. We'll be opportunistic, like we always are, in terms of doing the tuck-in deals. We have not modeled anything extraordinary in terms of the enhanced organic going into the next year. Really, it's just the runoff of what we've previously purchased that's currently in our estimation for next year. In terms of capacity, one of the reasons we chose mid-cap, now, we've used up the current committed facility, but obviously, they've got the wherewithal to support us if we find things that are interesting. Long-winded answer to say, not a lot played in for enhanced outside of what's already been acquired. We feel like with our lending partner, if we do find something that's pretty large, that we can tap them to help us with those extra large deals. I'll give it to Pat.

Speaker #6: We have not modeled anything extraordinary in terms of the enhanced organic going into the next year . Really , it's just the run off of what we've previously purchased that's currently in our estimation for next year in terms of capacity , one of the reasons we chose mid-cap now we've used up the current committed facility , but obviously they've got the wherewithal to support us if we if we find things that are interesting .

Speaker #6: So long winded answer to say , not a lot played in for enhanced outside of what's already been acquired . And we feel like we with our lending partner , if we do find something that's pretty large that we can can tap them to to help us with those extra large deals .

Speaker #6: So I'll give it a pat .

Speaker #8: Yeah . Josh , I think we're at an inflection point . Second quarter was an inflection point . Organic growth . You know , we're we're going to end the year with each quarter increasing more and more on organic growth .

Patrick McKillop: Yeah, Josh, I think we're at an inflection point. Q2 was an inflection point. Organic growth, we're going to end the year with each quarter increasing more and more on organic growth, and that won't slow down in 2026. I think you're going to see is the 2026 guide. What we have visibility, especially in the first half year, is to continued organic growth increases. The 160 would imply somewhere around 7% or so, but we're continuing to have confidence. The way we've thought about the year is the stuff that's already baked and we have visibility to. I think towards the second half of 2026, we have the ability then, as those plans continue to crystallize, to increase it. As far as profitability, we're at a point now where we can start throwing off cash.

Speaker #8: And that won't slow down in 2026. I think you're going to see, as the 2026 guide, what we have visibility on, especially in the first half of the year, is continued organic growth increases.

Speaker #8: So , you know , the 160 would imply somewhere around 7% or so . But you know , we're continuing to to have confidence .

Speaker #8: And the way we've thought about the year is the stuff that's already baked . And and we have visibility to and and I think towards the second half of 26 , we have the ability then you know , as those plans continue to crystallize to increase it as far as profitability , you know , we're at a point now where we can start throwing off cash .

Speaker #8: So from a lending perspective , you know , the nice thing about it is we , you know , have some cash in the balance sheet .

Patrick McKillop: From a lending perspective, the nice thing about it is we have some cash on the balance sheet, but we're also generating cash, and we'll have that available. As John stated, from a mid-cap perspective, if we need to expand the line, we'll do that. I really feel like we have increasing momentum here. The inflection point was the second quarter, and I think you're going to see both in GAAP profitability as well as organic growth that we're in a position to keep increasing here. From an enhanced perspective, I think we will have opportunities as we go into the year, but we don't have anything extraordinarily planned right now. Gotcha. Just one follow-up on the 7% adjusted. Organic for the ERTC HR compliance item there.

Speaker #8: But we're also generating cash and we'll have that available . And then as John stated , you know , from a mid-cap perspective , if you need to expand the line , we'll do that .

Speaker #8: But I really feel like we have increasing momentum here . The inflection point was the second quarter , and I think you're going to see both in GAAP profitability as well as organic growth , that we're in a position to keep increasing here .

Speaker #8: And then from an enhanced perspective , I think we all we will have opportunities as we go into the year , but we don't have anything extraordinarily planned right now .

Speaker #7: Gotcha . And then just one follow up on the 7% adjusted organic for the Ertc , HR compliance item . There . How much of that that's a little better run rate than what we've seen recently .

Patrick McKillop: How much of that—that's a little better run rate than what we've seen recently—how much of that is from cross-sell versus net new units to the business? Any color there would be helpful. Thank you. Yeah. What I would say, our cross-sell results were up 7% quarter over quarter, and that's without ASURE Central. ASURE Central brings all the products and solutions together under one common UI. The other thing to point to that, which is really exciting, is the fastest growing of the sequential growth is in three, four, five products. People are wanting to buy the whole solution. From a technology and a delivery perspective, we're increasingly capable of setting that up for clients and really leaning into that. I think you're going to see that be a big driver and a big theme into next year. Like I said, I think Q2 was the inflection point.

Speaker #7: How much of that is from cross-sell versus net new units to the business ? Any color there would be helpful . Thank you .

Speaker #8: Yeah . What I would say our cross-sell results were up 7% quarter over quarter . And that's without a sure central and a sure central brings all the products and solutions together under one common UI , the the other thing that the point to that which is really exciting is the fastest growing of the sequential growth is in three , four , five products .

Speaker #8: So people are wanting to buy the whole solution . And from a technology and a delivery perspective , we're increasingly capable of of setting that up for clients .

Speaker #8: And , and really leaning into that . So I think you're going to see that be a big driver and a big theme into next year .

Speaker #8: And like I said , I think Q2 was the inflection point , a down payment here in Q3 , you'll see an increase in Q4 , you'll start to see an increase in Q1 .

Patrick McKillop: A down payment here in Q3. You'll see an increase in Q4. You'll start to see an increase in Q1. We really have some pretty good momentum in this area. We've been planning for it in the entire organization, whether it's technology, sales, marketing, implementation. We're bringing all these products together from point solutions to a solution for the entire business, and that's really exciting. I think just to your point on ERTC, we believe that there's probably another 1% maybe impact in the fourth quarter, and then we'll never have to talk about it again. I think we're getting pretty close to having ERTC and compares and talking about that out of our talk track. Great. Thank you, guys. Our next question comes from Brian Bergen with TD Cowen. Please proceed with your question. Hi. This is actually Jared Levine on for Brian tonight.

Speaker #8: We're really have some pretty good momentum in this area . And then , you know , we've been planning for it in the entire organization , whether it's technology , sales , marketing , implementation , we're bringing all these products together from point solutions to a solution for the entire business .

Speaker #8: And and that's really exciting .

Speaker #6: And I think just to your point on Ertc and , you know , we believe that , you know , there's probably another 1% maybe impact in the fourth quarter .

Speaker #6: And then we'll never have to talk about it again. So I think we're getting pretty close to having Ertc in compares and talking about that out of our talk track.

Speaker #7: Great. Thank you, guys.

Speaker #3: Our next question comes from Brian Green with TD Cowen . Please proceed with your question .

Speaker #9: Hi . This is actually Jared Levine on for Brian tonight to start . Can you talk about sales cycles and pipeline views across your key offerings ?

Patrick McKillop: To start, can you talk about sales cycles and pipeline views across your key offerings? Has anything kind of materially changed since last quarter? No, I think from a small business perspective, I think in some cases, decisions are quick. In some cases. I would say there might be multi-solution deals that take a little bit extra long, but in the segment of the market we play, which is largely in the small business, medium-sized business market, we're not seeing too much slowdown, if you will. On the large enterprise deals, you may see an extra 30 days of measuring once or measuring twice, cutting once, but nothing material for us to talk about today. I think it's really business as usual in the small business area, despite what happens in the broader macro environment. What about those pipeline views as well? Pipeline views look pretty strong.

Speaker #9: Does anything kind of materially changed since last quarter ?

Speaker #8: No , I think I think from a small business perspective , you know , I think in some cases decisions are quick . In some cases , you know , I would say there might be a multi solution deals that take , you know , a little bit extra long , but in the segment of the market , we play , which is largely in the small business medium sized business market , we're not seeing too much slowdown , if you will , on the large enterprise deals .

Speaker #8: You may see an extra 30 days of , you know , measuring once or measuring twice , cutting once . But you know , nothing material for us to to talk about today .

Speaker #8: You know , I think it's really business as usual in the small business area , despite what happens in in the broader macro environment .

Speaker #9: And what about the pipeline views as well ?

Speaker #8: Pipeline views look pretty strong . I do think you're going to see us lean in more to marketing in 26 . And that was implied in our guide already that , you know , we'll continue to to look , we think there's opportunities to continue to market and sell to that base .

Patrick McKillop: I do think you're going to see us lean in more to marketing in 2026, and that was implied in our guide already that we'll continue to look. We think there's opportunities to continue to market and sell to that base. As far as a pipeline this year, pipeline's up quite a bit. Got it. And then, in terms of that 7% organic growth assumed for fiscal 2026, just want to double-click on this. Can you highlight what are the key drivers underlying this and whether that's kind of key offerings within the business there? And then, how much of a headwind will float revenue be to that organic growth rate? Yeah. From a float revenue perspective, we've modeled two more cuts in 2026, and we think that we'll be somewhere between 3 and 3.25 at the low point.

Speaker #8: As far as the pipeline this year , pipeline is up quite a bit .

Speaker #9: Got it . And then in terms of that 7% organic growth , assume for FY 26 , I just want to double click on this .

Speaker #9: Can you highlight what are the key drivers underlying this and whether that's kind of key offerings under within the business there . And then how much of a headwind will float revenue be to that organic growth rate .

Speaker #8: Yeah . From a float revenue perspective , we've modeled two more cuts in 26 . And we think there will be somewhere between 3 and 325 at the low point .

Speaker #8: Now , we also believe account balances going up will partially offset that . And then as you know , in our queue , we have , you know , roughly $90 million or so .

Patrick McKillop: Now, we also believe account balances going up will partially offset that. As you know, in our queue, we have roughly $90 million or so that is in long-term, so that protects that float quite a bit. Really, we're probably a small degradation planned in next year, but we're hopeful that that gets minimized by some of the things we talked about. We model kind of flat employment, if you will, nothing heroic there.

Speaker #8: That is in long term . So that protects that float quite a bit . So really we're probably a small degradation . You know , planned in next year .

Speaker #8: But you know we're hopeful that that gets minimized by some of the things we talked about . We model kind of flat employment if you will .

Speaker #8: Nothing heroic . There . And as far as the solution offering and the reason we're so excited about it is your central is as we bring these solutions together , the ability to sell , let's say an Aso offering with multiple products and services , similar to , let's say , a PEO without the PEO kind of insurance policies .

Patrick McKillop: As far as the solution offering, and the reason we're so excited about ASURE Central is, as we bring these solutions together, the ability to sell, let's say, an ASO offering with multiple products and services similar to, let's say, a PEO without the PEO kind of insurance policies, etc., or employee leasing, it allows us really to be a back office for a small business and be compliant across all products and services, whether it's HR, payroll, tax filing. We think that's a winning proposition, and that's the one we're going to lean into in general. Some of our point solutions will continue to grow as well. Obviously, with the acquisition of Latham, we think the attach rates of time to payroll will continue to grow up as part of those offerings. Thank you. Our next question comes from Eric Martinuzzi with Lake Street. Please proceed with your question.

Speaker #8: ET cetera . Or employee leasing and it it allows us really to be a back office for a small business . And be compliant across all products and services , whether it's HR , payroll , tax , filing , we think that's a winning proposition and that's the one we're going to lean into in general .

Speaker #8: Some of our point solutions will continue to grow as well . And then obviously with the acquisition of Latham , we think the attach rates have time to payroll .

Speaker #8: Will continue to grow up as part of those offerings .

Speaker #9: Great . Thank you .

Speaker #3: Our next question comes from Eric Martinuzzi with Lake Street. Please proceed with your question.

Speaker #10: Yeah . Regarding the Latham time , you had said last quarter that you were anticipating about a 15 million revenue contribution over the 12 month period from July through the end of June of 2026 ?

Patrick McKillop: Yeah. Regarding the Latham Time, you had said last quarter that you were anticipating about a $15 million revenue contribution over the 12-month period from July through the end of June 2026. Is that still an accurate number? Yeah. I mean, I think there's—this quarter, for example, the net impact before the acquisition was roughly $4.7 or $4.6 million. It's in the kind of bridge of the 24%. The composition of that is roughly 40% hardware or non-recurring, and the rest is recurring. About $2.7 or so of that $4.7, $4.6 is recurring. The recurring is pretty easy to predict, right? Take that $2.7, $2.5, that's $10. It'll be $10 of recurring contribution over an annual period for Latham. The question mark really is, what's the velocity of the hardware sales? I think the $15 is probably not unreasonable.

Speaker #10: Is that still an accurate number ?

Speaker #6: Yeah . I mean , I think there's a this quarter , for example , we we the net impact before the acquisition was roughly 4.7 or 4.6 million .

Speaker #6: It's in the kind of bridge of the 24% . And the composition of that is roughly 40% . Hardware or non-recurring . And the rest is recurring .

Speaker #6: So about $2.7 billion or so of that $4.6 billion is recurring. The recurring revenue is pretty easy to predict, right?

Speaker #6: So take that to 2.72.5 . That's ten . So it'll be ten of recurring contribution over an annual period for Latham . And then the question mark really is what's the velocity of the hardware sales .

Speaker #6: You know , I think what the 15 is probably not unreasonable . It could be a little bit higher if we have some windfalls .

Patrick McKillop: It could be a little bit higher if we have some windfalls. What you got to remember is what we're going to do ultimately with Latham is change their business model a little bit. Historically, what they were doing is they'd sell hardware, have a one-time event, and then upsell the software or the solution. We're going to probably do more of a bundling approach, especially as we start to offer payroll with it and some other products. That's where I'm a little bit hesitant to say. I think $15 is fair. It might be a little bit more. Ultimately, we're going to change a little bit of their business model to go to market strategy. That's why I think that's probably not an accurate view of Latham over time. The other point I'd say is the integration is right on schedule as far as bringing Asure Software Inc.

Speaker #6: But what you got to remember is what we're going to do ultimately with Latham is change their business model a little bit . What historically , what they were doing is they'd sell hardware , have a one time event , and then upsell the software or the solution .

Speaker #6: We're going to probably do more of a bundling approach , especially as we start to offer payroll with it and some other products .

Speaker #6: So I think that that's where I'm a little bit hesitant to say . I think 15 is fair . It might be a little bit more , but ultimately we're going to change a little bit of their business model to go to market strategy .

Speaker #6: So that's why I think that's that's probably not a an accurate view of kind of Latham over time .

Speaker #8: The other point I'd say is the integration is right on schedule as far as bringing assurance . Latham together . Latham has some areas where they have channel partners , etc.

Patrick McKillop: and Latham together. Latham has some areas where they have channel partners, etc., and we're not going to change too much of that model. As we integrate the offering between Asure, payroll, and Latham, I think we've already seen some pretty good synergy from a revenue perspective coming together in our offering. Excited about the possibilities for 2026. Yeah. The way I think about it too, just as another point on it, Eric, they have 15,000 customers right now that are on, using their. Time and attendance solutions that do not have a connection with us in terms of payroll. When we look at that business, yes, they brought us the customers, but we are going to take credit for when we start to sell the payroll into them.

Speaker #8: , and we're not going to change too much of that model . But as we integrate the offering between Assured Payroll and Latham , you know , I think we've already seen some pretty good synergy from a revenue perspective coming together in our offerings .

Speaker #8: So excited about the possibilities for 26 .

Speaker #6: And the way I think about it , too . Just as another point on Eric , you know , they have 15,000 customers right now that are on using their their time and attendance solutions that don't have a connection with us in terms of payroll .

Speaker #6: So when we look at that business, yes, they brought us the customers, but we're going to take credit for when we start to sell the payroll into them.

Speaker #6: So that's where we see a lot of growth. It's going to be in that Latham base, but it's going to be our product.

Patrick McKillop: That is where we see a lot of growth. It is going to be into that Latham base, but it is going to be our product on top of that Latham base. If I could follow up on the hardware, obviously, you had a higher number in Q3 because of Latham. That $4.4 million number for professional services and hardware, is that kind of a safe new run rate for that portion of the revenue? I think about three, honestly. I think probably fair for the near term to think about $2 million of hardware for sure, at least for the next 12 months. I think a fair number for professional services is probably $1 million. Now, it might be higher or lower. The variability on professional services is going to come in as we are doing some work for these large tax deals.

Speaker #6: On top of that , Latham base .

Speaker #10: And if I could follow up on the hardware , obviously you had a higher number in Q3 because of Latham . That 4.4 million number for professional services and hardware is that kind of the a safe new run rate for that portion of the revenue ?

Speaker #6: I think about three honestly , you know , I think probably fair for the near term to think about 2 million of hardware for sure , at least for the next 12 months .

Speaker #6: And I think a fair number for professional services , 5 million . Now , it might be higher or lower . The variability on professional services is going to come in as as we're doing some work for these large tax deals that can vary decently between quarters as they're as they're going up in live .

Patrick McKillop: That can vary decently between quarters as they are going up in live. I think you saw a little bit of that last year in the fourth quarter where we had a pretty heavy install, which makes sense right around year-end. I think you will see some dynamic in the professional services. In general, I think two-in-one between those two over the year is probably a fair way to start. Does that agree with that? Yeah. No, I think, yeah, I think that is exactly right. I think the two-in-one is pretty safe, and there might be some upside down the line, but right now, that is a great place to model. Got it. Thanks for taking my question. Our next question comes from Richard Baldry with ROTH Capital Partners. Please proceed with your question.

Speaker #6: So I think you saw a little bit of that last year in the fourth quarter where we had a pretty heavy install , which makes sense right around year end .

Speaker #6: So I think you'll see some dynamic in the professional services . But in general , I think two and one between those two over , over the year is probably a fair way to start .

Speaker #6: Is that agree ?

Speaker #8: Yeah . No , I think yeah , I think that's exactly right . And I think the 2 in 1 is pretty safe .

Speaker #8: there might be some upside , you know , down the line . And But right now that's a great place to model .

Speaker #10: Thanks for taking my question.

Speaker #3: Our next question comes from Richard Baldry with Roth Capital Partners . Please proceed with your question .

Speaker #11: Thanks . I'm curious if Asher Central , the rollout of that will cut any of your sort of legacy technology stack support costs and and whether it's already includes , as a front end for Latham or if that's sort of a near-term , you know , thing that will develop .

Patrick McKillop: Thanks. I am curious if ASURE Central, the rollout of that, will cut any of your sort of legacy technology stack support costs and whether it already includes the front end for Latham or if that is sort of a near-term thing that will develop. Yeah, Rich, no, great question. First of all, from a legacy development, we are already seeing some pretty good cost initiatives around some of our costs. The newer products and services that we have rolled out significantly are cheaper. We are also, from a development cycle, spending less money on maintenance and more money on new. That continues to grow over the past couple of years as we kind of have an eye towards the future. We've been able to stabilize and improve the back end quite a bit now, the front end.

Speaker #8: Yeah . Rich . No . Great question . First of all , from a legacy development , we're already seeing some pretty good .

Speaker #8: You know , cost initiatives around some of our costs . You know , the newer products and services that we've rolled out , you know , significantly , are cheaper .

Speaker #8: We're also from a development cycle , you know , spending less money on maintenance and more money on new . And that continues to grow over the past couple years , as we , you know , kind of have an eye towards the future .

Speaker #8: And we've been able to stabilize and improve the back end quite a bit . Now , the front end . And as we look at some of the , you know , new development costs and the new products , they're definitely lower on maintenance .

Patrick McKillop: As we look at some of the new development costs and the new products, they're definitely lower on maintenance. Really excited about that. As far as Latham, we're in the, I'll call it months, not years. We're really, really close to integrating that with ASURE Central. Most of the other products are either online or going to be online within this quarter. Latham probably targeted towards first quarter, but we're well on our way to doing that. You're seeing the improvement in the organic growth. Can you talk about sort of what's the underlying drivers there? Is it sales headcount improvements? Is it sales efficiencies? Is it sort of unit-driven or ARPU-driven, just sort of the pieces underlying that? Thanks. Yeah, Rich, we said earlier in the year that attach rates are going to be kind of a driver.

Speaker #8: So really excited about that . As far as Latham , we're in a we're in the you know , I'll call it months not years .

Speaker #8: We're really , really close to integrating that with Azure Central . All most of the other products are either online or going to be online within this quarter .

Speaker #8: So you know, Latham probably targeted towards the first quarter, but you know we're well on our way to doing that.

Speaker #11: And great. Where are you seeing the improvement in organic growth? Can you talk about sort of what the underlying drivers are there?

Speaker #11: It sales headcount improvements ? Is it sales efficiencies ? Is it sort of unit driven or rpu driven , just sort of the pieces underlying that ?

Speaker #11: Thanks .

Speaker #8: Yeah . Rich , you know we we said earlier in the year that attach rates and you know are going to be kind of a driver and the 7% sequential , you know , we think is a pretty good proof point from second to third quarter .

Patrick McKillop: The 7% sequential, we think, is a pretty good proof point from second to third quarter. If I dive into those numbers, which is two or more products, if I look at three, four, and five products, that's the fastest growing. I think as we look at this year, we've been kind of run rating it. As you look at 2026, I think you're going to see us spend more money in sales and marketing. That's implicit in the guide. We're also bringing online the technology development really that we've been building towards for the last couple of years. You'll continue to roll that out. That's in the guide. I think we really are sitting on an opportunity to really grow exponentially here as we bring all these point solutions together. Anytime you're bringing them together, it's kind of crawl, walk, run. I would say we're walking fast.

Speaker #8: And you know , and then if I dive into those numbers , which is two or more products , if I look at three , four and five products , that's the fastest growing .

Speaker #8: So , you know , I think as we look at this year , we've been kind of run rating it as you look at 2026 , I think you're going to see us spend more money in sales and marketing .

Speaker #8: That's implicit in the guide . We're also , you know , bringing online the technology development really that we've been building towards for the last couple of years .

Speaker #8: So you'll continue to roll that out . That's in the guide . I think we really are sitting on , you know , an opportunity to really grow exponentially here as we bring all these point solutions together .

Speaker #8: Now , anytime you're bringing them together , you know , it's kind of crawl , walk , run . You know , I would up say we're walking fast and we'll continue to do that and get momentum here .

Patrick McKillop: We'll continue to do that and get momentum here, not only this quarter as we've done in third quarter, but fourth quarter will be increased, first quarter will be increased. We anticipate each quarter in 2026 to continue for us to get better at selling, implementing, servicing, multi-product installations. We anticipate that area to grow. The last for me would be with the rollout of some of the newer AI-driven development tools, but other agentic things to help back offices be more efficient. How do you think about the connection or leverage on top-line growth versus operating expense growth, sort of near-term, long-term now? Thanks. Yeah. John's done a nice job, and we've done a nice job internally around growing scale. If you can think about, let's say, 2021, we were somewhere around $76 million with about adjusted EBITDA of $8 million.

Speaker #8: Not only this quarter as as we've done , you know , in third quarter , but fourth quarter will be increased . First quarter be increased .

Speaker #8: And we anticipate each quarter in 26 to continue for us to get better at selling , implementing , servicing , multi-product installations . And we anticipate that area to grow .

Speaker #11: That last for may be with the rollout of some of the newer AI driven development tools , but other , you know , agentic things to help back offices be more efficient .

Speaker #11: How do you think about the connection or leverage on top line growth versus operating expense growth ? Sort of near term , long term ?

Speaker #11: Now , thanks .

Speaker #8: Yeah . And you know Johnson a nice job . And and we've done a nice job internally around growing scale . If you can think about you know let's say 2021 .

Speaker #8: You know we were somewhere around 76 million with about adjusted EBITDA of eight . You know , our long term goal here is 180 to 200 or medium term goal .

Patrick McKillop: Our long-term goal here is $180 million to $200 million, or medium-term goal, and to get the 30% margins. This year, implicit in our guide for 2026 is $23 million to $25 million. We're continuing to just grow profitability on the revenue side, and by the way, on the profitability, our headcount has been relatively flat. We've added marketing and sales, but operations and some of the G&A have really been relatively flat during this period of time. We're getting scale. From a revenue perspective, what we've been leaning into is software, and multi-product software gives you all kinds of advantages. With the AI workflow, and we have Luna as our agentic agent, and then we have her actually connecting to other agents, we think we have the ability to really control the narrative, not only in software, but also workflow with the software.

Speaker #8: And to get the 30% margins , you know , this year implicit in our guide for 26 is , you know , 23 to 25 .

Speaker #8: So we're continuing to just , you know , grow profitability on the revenue side . Oh and by the way , on on the profitability , our headcount has been relatively flat .

Speaker #8: We've added marketing and sales , but operations and in some of the G&A have really been relatively flat during this period of time .

Speaker #8: So we're getting scale . And then from a revenue perspective , what we've been leaning into is , you know , software and multi-product software gives you all kinds of advantages .

Speaker #8: But with the AI workflow , workflow and we have Luna as our genetic agent . And then we have her actually connecting to other agents .

Speaker #8: We think we have the ability to really control the narrative , not only in software , but also workflow with the software . And we think that there's all kinds of opportunities in that area .

Patrick McKillop: We think that there's all kinds of opportunities in that area. For us, we're going to lean into that compliance area. If you think of a business with 20 employees that now has to report to COBRA, the system can kind of really tell the client that at 20 employees, they have to report COBRA, and then we can go out and do it for them with their permission. That kind of experience is an AI experience that drives revenue, and it also drives workflow on cost. You're going to see a lot of examples in that over the upcoming year. Great. Thanks. As a reminder, if you would like to ask a question, please press the star one on your telephone keypad. Our next question comes from Greg Gibas with Northland Securities. Please proceed with your question. Great. Good afternoon, Pat. John, thanks for taking the questions.

Speaker #8: And then for us , we're going to lean into that compliance area . So if you think of a business with 20 employees that now has to report to Cobra , the system can kind of really tell client that at 20 employees , they have to report Cobra .

Speaker #8: And then we can go out and do it for them with their permission . That kind of experience is an AI experience that drives revenue .

Speaker #8: And it also drives workflow on cost. So you're going to see a lot of examples in that over the upcoming year.

Speaker #11: Great . Thanks .

Speaker #3: As a reminder, if you would like to ask a question, please press Star One on your telephone keypad. Our next question comes from Greg Gibbs with Northland Securities.

Speaker #3: Please proceed with your question .

Speaker #9: Great .

Speaker #12: Good afternoon , and thanks for taking the questions . Could you maybe speak to attach rates , the trends you're seeing there ? You know , you mentioned , I think , 400 basis points of year over year improvement last quarter .

Patrick McKillop: Could you maybe speak to attach rates, the trends you're seeing there? You mentioned, I think, 400 basis points of year-over-year improvement last quarter. Wondering if that trend remained relatively consistent. Yeah. I said in my prepared statements, I think Pat just made a comment to it as well. I mean, it's single digits sequentially increasing. I think he said seven. I think that's about right, is somewhere in that range, sequentially in terms of the improvement quarter to quarter. Got it. Paul, just to clarify, you mentioned about, I think, 7% implied organic growth in 2026. Is that consistent with your expectations for Q4 of this year? Yeah, I think so. I think we did that in Q3. We expect, I think, maybe a little bit of a tick up based on the fourth quarter, just implied in the guide.

Speaker #12: Wondering if that trend remained relatively consistent .

Speaker #6: Yeah , I think what I said , Mike statements , I think Pat just made a comment to it as well . I mean , it's single digits sequentially increasing .

Speaker #6: So I think you said seven . I think that's about right . Is somewhere in that range sequentially in terms of the improvement quarter to quarter .

Speaker #12: Got it . And then to follow up to clarify , you mentioned , I think 7% implied organic growth in 2026 . Is that consistent with your expectations for Q4 of this year ?

Speaker #6: Yeah , I think so . I think , you know , we did that in Q3 . So we expect , I think , maybe a little bit of a tick up based on the fourth quarter .

Speaker #6: Just implied in the guide , it has to come basically from organic . No other place for it to come from .

Patrick McKillop: This has to come basically from organic, showing where the place worked to come from. Fair enough. Lastly, as it relates to integration plans with Latham Time, relatively early still, could you maybe discuss further integration plans that are currently underway? I think there's some really exciting things. We've talked in the past about the ASURE Pay card, which we're still in the early stages of. Imagine what they've got is they've got a time clock, right? Pretty simple. You go in, you wand in with a badge to log in and clock your time in and clock out. What we can do and what they're working on as another integration point is using ASURE Pay as that wanding device. You've got in the hand of the employee a device not only that allows them to clock in and clock out, but also as a way to get paid.

Speaker #12: Fair enough . And I guess lastly , as it relates to integration plans with latent time , you know , relatively early still , but could you maybe discuss , further integration plans that are maybe currently underway ?

Speaker #6: I mean , I think there's some really exciting things like , you know , we've talked in the past about the Azure Pay Card , which we're still in the early stages of , but imagine what they've got is they've got a time clock , right ?

Speaker #6: So pretty simple . You go and you one then with a badge to to log in and clock your time in and clock out .

Speaker #6: Well , what we can do and what they're working on is another integration point is usually a sure pay as that winding device .

Speaker #6: So you've got in the hand of the employee . You've got a device . Not only that allows them to clock in and clock out , but also as a way to get paid .

Speaker #6: And that can be the vehicle that they're going to get their paycheck . So that's just one example . We feel like there's a lot of potential with that deal .

Patrick McKillop: That can be the vehicle that they're going to get their paycheck. That's just one example. We feel like there's a lot of potential with that deal. Okay. Great. Thank you. Yeah. Greg, just on that, their client base and our direct client base jointly have 30,000 clients. The ability to work together is to improve book to bill on all those products. We talked a little bit about integration. In back office systems, we have opportunities to get integration really all the way through 2026. Really excited about it. Really good people. We're excited about the movement, both from a revenue perspective as well as a scale and efficiency perspective. Got it. Thanks again. Our next question comes from Alex Newman with Stephens. Please proceed with your question. Hi. Could you talk a little bit more about ASURE Central? What are the major differences here in the new platform?

Speaker #12: Okay , great . Thank you .

Speaker #8: Yeah . And Greg , just on that you know , their client base and our direct client base , you know , are jointly have 30,000 clients .

Speaker #8: You know , the ability to work together , improve book to bill on all those products . You know we talked a little bit about integration and then , you know , back office systems .

Speaker #8: You know we have opportunities to to get integration really through the all the way through 26 . So really excited about it . Really good people .

Speaker #8: We're excited about the movement , both from a revenue perspective as well as scale and efficiency perspective .

Speaker #12: Got it . Thanks again .

Speaker #3: Our next question comes from Alex Newman with Stephens . Please proceed with your question .

Speaker #13: Hi . Could you talk a little bit more about . Sure . Central . Just what are the major differences here in the new platform ?

Speaker #13: And then secondly, how do you feel about the upgraded platform from a competitive standpoint? And are you expecting any uplift in price from it?

Patrick McKillop: Secondly, how do you feel about the upgraded platform from a competitive standpoint, and if you're expecting any uplift in price from it? Yeah. I think from us over time, and we'll talk about in 2026, is some of the not only the attach rates, but the ARPU or revenue per unit. We do anticipate upticks. We're kind of showing that or proving that out. You'll see more of that in 2026. If you think about just in Q2 and Q3, we had a 7% improvement in unit volume. We really didn't have ASURE Central yet. We believe that the common look and feel across all products and services will drive more adoption of our cross-sell and, in turn, that revenue opportunity. We're really excited about that. I think we'll get a little bit more firm data on the ARPU in 2026.

Speaker #8: Yeah , I think from from us over time and we'll we'll talk about in 26 is some of the not only the attach rates but the arppu or revenue per unit .

Speaker #8: You know , we do anticipate upticks . We're kind of showing that or proving that out . And , you know , you'll see more of that in 2026 .

Speaker #8: But if you think about , you know , just in Q2 with in Q3 , we had a 7% improvement and in , in unit volume , and and we really didn't have a sure central yet .

Speaker #8: So , you know , we believe that that common look and feel across all products and services will drive more adoption of our cross-sell and and in turn , that revenue opportunity .

Speaker #8: We're really excited about that . I think we'll get a little bit more firm data on the Rpu in 26 . But for right now , we see evidence that it's happening .

Patrick McKillop: For right now, we see evidence that it's happening. We're rolling this out in all avenues of the business: marketing, implementation, sales, operations, and technology. We know, and in my past life, I've had this kind of experience before. We think we're really at an inflection point, and bringing these point solutions together will do that. From an efficiency perspective, the idea to get to event-driven marketing will make it degrees of difficulty easier to cross-sell and implement faster. We'll use our data and reach into AI to enable that to grow faster. Our guide reflects high single digits or so. I think we have an ability to beat that as we go, but that's a story for more proof points along the way. Each quarter, we'll have an opportunity to talk about that. Great. Thanks, Pat. There are no further questions at this time.

Speaker #8: We're rolling this out in all avenues of the business from marketing , implementation , sales , operations and technology . So we know and and , you know , in my past life , I've had this kind of experience before , you know , we think it's we're really at an inflection point and bringing these point solutions together will do that .

Speaker #8: And then from a efficiency perspective , the idea to get to vent driven marketing will make it degrees of difficulty easier to cross-sell and implement faster .

Speaker #8: So , you know , we'll use our data and reach into AI to enable that to to grow faster . And our guide reflects , you know , high single digits or so .

Speaker #8: You know , I think we have an ability to to beat that as we go . But , you know , that's a story .

Speaker #8: For more . You know , more proof points along the way . And each quarter we'll have an opportunity to talk about that .

Speaker #13: Great . Thanks , Pat .

Speaker #3: There are no further questions at this time . So I would now like to turn the floor back over to Patrick Goepel for closing comments .

Patrick McKillop: I would now like to turn the floor back over to Pat Goepel for closing comments. Yeah. Really appreciate everybody's interest today. Like I said, I think we're at an inflection point. We hit that in the second quarter. We're growing. We're bringing everything together here that we've been working on for multiple years, all our products and point solutions, integrating them together. We've had really good growth in areas. We've had really good progress in our money movement and our tax filing business. That will continue as well. We think. We're

Speaker #8: Yeah , really appreciate everybody's interest today . Like I said , I think it's a we're at an inflection point . We hit that in the second quarter .

Speaker #8: We're growing . We're bringing every , you know , everything together here that we've been working on for multiple years . All our products and point solutions , integrating them together .

Speaker #8: You know , we've had really good growth in areas we've had really good progress in our money movement and our tax filing business .

Speaker #8: That will continue as well . So , you know , we think we're at the verge of increasing results and and you'll see that through the end of 25 as well as 26 .

Operator: At the verge of increasing results, you'll see that through the end of 2025 as well as 2026. We really appreciate your support. Patrick mentioned that we'll be out on some road shows and some client events and investor conferences, and we look forward to telling that story and seeing you out there. Thanks for your time today, and again, really appreciate it. Take care.

Speaker #8: And we really appreciate your support . Patrick mentioned that we'll be out on some roadshows and and some client events and , and investor conferences , and we look forward to telling that story and , and seeing you out there .

Speaker #8: Thanks for your time today . And again really appreciate it . Take care .

[Unknown Speaker]: This concludes today's teleconference. You may now disconnect your lines. Thank you for your participation.