Q1 2026 Asure Software Inc Earnings Call

April 30, 2026

Operator 2: Good afternoon, and welcome to Asure Software's Q1 2026 earnings conference call. Joining us today's call are Chairman and CEO, Pat Goepel, Chief Financial Officer, John Pence, and Vice President of Investor Relations, Patrick McKillop. Following their prepared remarks, there will be a question and answer session for analysts and investors. I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.

Operator: Good afternoon, and welcome to Asure Software's Q1 2026 earnings conference call. Joining us today's call are Chairman and CEO, Pat Goepel, Chief Financial Officer, John Pence, and Vice President of Investor Relations, Patrick McKillop. Following their prepared remarks, there will be a question and answer session for analysts and investors. I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.

Speaker #2: Following their prepared remarks, there will be a question-and-answer session for analysts and investors. I would now like to turn the call over to Patrick McKillop for introductory remarks.

Speaker #2: Please go ahead.

Speaker #3: Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Asure Software's first quarter 2026 earnings results call. Following the close of the market, we released our financial results.

Patrick McKillop: Thank you, operator. Good afternoon, everyone, and thank you for joining us for Asure Software's Q1 2026 Earnings Results Call. Following the close of the market, we released our financial results. The earnings release is available on the SEC's website and our investor relations website at investor.asuresoftware.com, where you can also find our 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. The 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.

Speaker #3: The earnings release is available on the SEC's website and our investor relations website at investor.asuresoftware.com. Where you can also find our 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.

Speaker #3: The 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.

Speaker #3: 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.

Patrick McKillop: 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'll hand the call over to Pat in a moment. I just wanted to take a moment to remind people of our upcoming investor relations activities. On 13 May, we are attending the 21st annual Needham TMT Conference in New York. On 14 May, the ONE Houlihan Lokey Global Conference, also in New York. On 28 May, we will attend the Craig-Hallum Institutional Investor Conference in Minneapolis. On 23 June, we will participate in the Northland Capital Markets Institutional Investor Conference, which is being held virtually. We also are in the process of scheduling some non-deal roadshows.

Speaker #3: 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 #3: I'll 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 #3: On May 13th, we are attending the 21st annual Needham TMT conference in New York. And on May 14th, the Holohan Loki One conference, also in New York.

Speaker #3: On May 28th, we will attend the Craig Hallam conference in Minneapolis. On June 23rd, we will participate in the Northland Capital Markets conference, which is being held virtually.

Speaker #3: We also are in the process of scheduling some non-deal road shows. Investor outreach is very important to ASURE, and I would like to thank all of those that assist us in our efforts to connect with investors.

Patrick McKillop: Investor outreach is very important to Asure. I would like to thank all those that assist us in our efforts to connect with investors. Finally, I would like to remind everyone that this call is being recorded. It will be made available for replay via a link available on the investor relations section of our website. With that, I would like to now turn the call over to Pat Goepel, Chairman and CEO. Pat?

Speaker #3: Finally, I would like to remind everyone that this call is being recorded, and it will be made available for replay via a link on the investor relations section of our website.

Speaker #3: With that, I would like to now turn the call over to Pat Goeppel, Chairman and CEO. Pat, thank you.

Pat Goepel: Thank you, Patrick, and welcome everyone to Asure Software's Q1 2026 earnings results call. I'm joined on this call by our CFO, John Pence, we will provide a business update for Q1 2026 results, as well as our updated outlook for the remainder of the year. We are very pleased to report a strong start in 2026. Q1 revenues came in at $42.8 million, representing growth to 23% compared to Q1 2025. This performance reflects continued momentum across our core business lines and validates the investments we've made in our platform, Salesforce and AI capabilities over the past year. Our organic growth rate for Q1 2026 was 7%, compared with 3% in Q1 2025 and 3.5% in Q1 2024.

Speaker #4: Patrick, and welcome, everyone, to ASURE SOFTWARE's first quarter 2026 earnings results call. I'm joined on this call by our CFO, John Pence, and we will provide a business update for quarter one 2026 results as well as our updated outlook for the remainder of the year.

Speaker #4: We are very pleased to report a strong start in 2026. First quarter revenues came in at $42.8 million, representing growth of 23% compared to Q1 of 2025.

Speaker #4: This performance reflects continued momentum across our core business lines and validates the investments we've made in our platform, Salesforce, and AI capabilities over the past year.

Speaker #4: Our organic growth rate for quarter one 2026 was 7% compared with 3% in quarter one 2025 and 3.5% in quarter one 2024. This is a significant acceleration in a quarter, which historically has shown some seasonality.

Pat Goepel: This is a significant acceleration in a quarter, which historically has shown some seasonality. We're encouraged by the drivers behind it, increasing attach rates with our existing client space, as well as continued new logo wins. Given global uncertainty, we're taking a conservative stance on operating the business. However, we remain very bullish on the customer response to our platform improvements, and we believe we can deliver double-digit organic growth as we move through the remainder of 2026. Since the launch of Asure Central in October 2025, adoption has continued at a rapid pace, and we believe that by the end of Q2 2026, the majority of our approximately 30,000 direct clients will be on the platform.

Speaker #4: We're encouraged by the drivers behind it, increasing attach rates with our existing client base, as well as continued new logo wins. Given global uncertainty, we're taking a conservative stance on operating the business.

Speaker #4: However, we remain very bullish on the customer response to our platform improvements and we believe we can deliver double-digit organic growth as we move through the remainder of 2026.

Speaker #4: Since the launch of ASURE Central in October 2025, adoption has continued at a rapid pace, and we believe that by the end of the second quarter 2026, the majority of our approximately 30,000 direct clients will be on the platform, with the majority of our direct client base now on a single unified platform.

Pat Goepel: With the majority of our direct client base now on a single unified platform, we believe we're increasingly well-positioned to accelerate cross-sell and attach rates throughout the remainder of 2026. Our multi-product attach rates continue to improve. The number of clients purchasing multiple products in our payroll business grew by 15% in Q1 compared to Q1 of 2025. We continue to work toward our internal goal of moving clients from an average of 2 products to 4 or more products per relationship. Earlier this year, at our sales kickoff, we introduced AsureWorks, which is our administrative services outsourcing or ASO model, which allows clients to delegate key payroll and HR compliance processes to Asure. We are scaling AsureWorks thoughtfully, building sales, implementation, and support capacity based on early results. It's still early days. However, the reception has been very positive.

Speaker #4: We believe we're increasingly well positioned to accelerate cross-sell and attach rates throughout the remainder of 2026. Our multi-product attach rates continue to improve. The number of clients purchasing multiple products in our payroll business grew by 15% in quarter one, compared to quarter one of 2025.

Speaker #4: We continue to work toward our internal goal of moving clients from an average to two products to four or more products per relationship. Earlier this year, at our sales kickoff, we introduced ASURE Works, which is our administrative services outsourcing or ASO model, which allows clients to delegate key payroll and HR compliance processes to ASURE.

Speaker #4: We are scaling ASURE Works thoughtfully. Building sales implementation and support capacity based on early results is still early days. However, the reception has been very positive; our pipeline is growing, and we've started to win new clients.

Pat Goepel: Our pipeline is growing, and we've started to win new clients. We're seeing interest across multiple types of buyers. Small hotel chains, restaurants, HVAC companies are among the early adopters, which is consistent with our broader client base of Main Street businesses that need payroll and HR compliance support but lack the internal resources to manage it themselves. We currently have six sales dedicated to AsureWorks in the pilot effort and plan to add a few more in the near term. This offering is strategically important. Clients who adopt managed payroll and compliance services typically represent 2 to 3 times the revenue of a payroll-only client. Importantly, AsureWorks is not a PEO model. We're not taking on co-employment risks. For clients constrained by the costs or rigidity of a traditional PEO, we believe AsureWorks is a compelling, flexible alternative.

Speaker #4: We're seeing interest across multiple types of buyers, small hotel chains, restaurants, HVAC companies, among the early adopters, which is consistent with our broader client base of Main Street businesses that need payroll and HR compliance support, but lack the internal resources to manage it themselves.

Speaker #4: We currently have six sales reps dedicated to ASURE Works in the pilot effort, and plan to add a few more in the near term.

Speaker #4: This offering is strategically important. Clients who adopt managed payroll and compliance services typically represent 2 to 3 times the revenue of a payroll-only client; importantly, ASURE Works is not a PEO model.

Speaker #4: We're not taking on co-employment risk, so for clients constrained by the cost or rigidity of a traditional PEO, we believe ASURE Works is a compelling, flexible alternative.

Speaker #4: We are on track toward our full-year target of $150 sales reps and continuing to invest in training and enablement, sales leadership upon our president's chief revenue officer, Al Goldstein, is driving focus on both new logo acquisition and multi-product cross-sell within our existing base.

Pat Goepel: We are on track toward our full-year target of 150 sales reps and continue to invest in training and enablement. Sales leadership, upon our President and Chief Revenue Officer, Eyal Goldstein, is driving focus on both new logo acquisition and multi-product cross-sell within our existing base, with the goal of transitioning our mix over time towards approximately 35% new logos and 65% base expansion. Our new bookings in our core Human Capital Management payroll continued at a strong pace in Q1, up 13% versus last year. Our contracted backlog remains healthy at approximately $85.6 million. We expect to convert approximately 38% of that backlog over the next 12 months. Our client base, primarily small and mid-sized businesses in payroll-intensive, compliance-driven industries, remains resilient. We have not observed meaningful changes in sales cycle dynamics or competitive behavior in Q1.

Speaker #4: With the goal of transitioning our mix over time towards approximately 35% new logos and 65% base expansion, our new bookings in our core human capital management and payroll continue to have a strong pace in quarter one, up 13% versus last year. Our contracted backlog remains healthy at approximately $85.6 million.

Speaker #4: We expect to convert approximately 38% of that backlog over the next 12 months. Our client base, primarily small and mid-sized businesses in payroll-intensive, compliance-driven industries, remains resilient.

Speaker #4: We have not observed meaningful changes in sales cycle dynamics or competitive behavior in quarter one. I want to take a moment to reiterate our thoughts on AI and what it means for our business, much of the disruption narrative applies to productivity and workflow software.

Pat Goepel: I want to take a moment to reiterate our thoughts on AI and what it means for our business. Much of the disruption narrative applies to productivity and workflow software, tools where AI can replicate or replace the core function of a software. Payroll and HR compliance is not in that category. We move approximately $20 billion annually on behalf of our clients, and to do so, we hold money transmitter licenses in every state that requires them, a regulatory infrastructure that takes years to build and represents a significant barrier to entry. We interface directly with the IRS, state and local tax agencies, and banking institutions. Our clients carry 7 or more years of employment history, complex multi-jurisdictional tax obligations, and real-time compliance requirements where the margin of error is effectively zero.

Speaker #4: Tools where AI can replicate or replace the core function of a software that the software performs. Payroll and HR compliance is not in that category.

Speaker #4: We move approximately $20 billion annually on behalf of our clients and to do so we hold money transmitter licenses in every state. It requires them a regulatory infrastructure that takes years to build and represents a significant barrier to entry.

Speaker #4: We interface directly with the IRS, state, and local tax agencies, and banking institutions. Our clients carry seven or more years of employment history, complex multi-jurisdictional tax obligations, and real-time compliance requirements where the margin of error is effectively zero.

Speaker #4: These are not functions that a generic AI layer can absorb; the regulatory complexity does not go away. In fact, it compounds. What makes ASURE a system of record rather than a workflow tool is precisely this.

Pat Goepel: These are not functions that a generic AI labor layer can absorb. The regulatory complexity does not go away. In fact, it compounds. What makes Asure a system of record rather than a workflow tool is precisely this. We are embedded in the legal and financial infrastructure of our clients' businesses. Switching costs are high. Our revenue model is consumption-based on headcount and payroll runs rather than a seat license, and our client base is concentrated in the front line, essential workforce economy, plumbers, hotel workers, tradespeople. Those work is among the most resilient to automation. At the same time, we believe AI is a meaningful accelerator for us. Luna, our AI agent, has been adopted by greater than 15% of potential users today without any active marketing or onboarding from Asure. In Q1, Luna interactions increased by nearly 50% over the prior quarter.

Speaker #4: We are embedded in the legal and financial infrastructure of our clients' businesses. Switching costs are high. Our revenue model is consumption-based on headcount and payroll runs, rather than a seat license. In our client base, revenue is concentrated in the front-line essential workforce economy—plumbers, hotel workers, tradespeople.

Speaker #4: Those work is among the most resilient to automation. At the same time, we believe AI is a meaningful accelerator for us. Luna, our AI agent, has been adopted by a greater than 15% of potential users to date.

Speaker #4: Without any active marketing or onboarding from ASURE, in quarter one, Luna Interactions increased by nearly 50% over the prior quarter. To date, we have transcribed, categorized, and scored approximately 80,000 support calls for sentiment and our ticket mining capability analyzes more than 100,000 cases monthly.

Pat Goepel: To date, we have transcribed, categorized, and scored approximately 80,000 support calls for sentiment, and our ticket mining capability analyzes more than 100,000 cases monthly. These numbers reflect AI working across both the client-facing and operational sides of the business, deflecting support volume, enabling employees and administrators to self-serve across payroll, benefits, and compliance workflows, and driving continuous product and service improvements. The result is a smarter, faster, and more responsive organization without reducing the compliance expertise and accountability our clients rely on us to provide. Our last call, we told you that Luna could perform over 50 actions, live, audible, and permission control. Since then, we've proved the model at scale. Our Canadian tax solution is the clearest example. A fully automated Luna AI-powered pipeline that converted a traditionally manual compliance workflow into a proactive, continuous monitored system.

Speaker #4: These numbers reflect AI working across both the client-facing and operational sides of the business, deflecting support volume and enabling employees and administrators to self-serve across payroll, benefits, and compliance workflows, and driving continuous product and service improvements.

Speaker #4: The result is a smarter, faster, and more responsive organization without reducing the compliance expertise and accountability our clients rely on us to provide. Our last call, we told you that Luna could perform over 50 actions: live, audible, and permission control.

Speaker #4: Since then, we've proved the model at scale. Our Canadian tax solution is the clearest example—a fully automated, Luna AI-powered pipeline that converted a traditionally manual compliance workflow into a proactive, continuously monitored system.

Speaker #4: Our more periodic checks, continuous coverage, that architecture is now a blueprint, and we're systematically replacing it across U.S. payroll, U.S. tax, and HR compliance.

Pat Goepel: Our more periodic checks, continuous coverage, that architecture is now a blueprint, and we're systematically replacing it across US payroll, US tax, and HR compliance. This is not a feature rollout. It is a platform-wide operating model shift from reactive to proactive, from human check to AI verified, from process-dependent to infrastructure-driven. That same shift that makes AsureWorks possible, we can now take on the work itself, not just deliver the software, because the AI layer gives us the efficiency and the auditability to do it at scale without scaling headcount linearly. Through Asure Central, every payroll specialist works from a unified action surface. Discrepancies, missing data, pending filings require approvals surfaced in real time, not buried in reports. Luna identifies what needs attention. Central delivers it to the right person at the right moment. Detection, notification, action, closed loop. These capabilities compound.

Speaker #4: This is not a feature rollout. It is a platform-wide operating model shift: from reactive to proactive, from human check to AI-verified, from process-dependent to infrastructure-driven.

Speaker #4: That same shift that makes ASURE Works possible. We can now take on the work itself, not just deliver the software, because the AI layer gives us the efficiency and the auditability to do it at scale without scaling headcount, literally.

Speaker #4: Through ASURE Central, every payroll specialist works from a unified action surface. Discrepancies, missing data, pending filings require approvals. Surface in real-time, not buried in reports.

Speaker #4: Luna identifies what needs attention. Central delivers it to the right person at the right moment—detection, notification, action, closed loop. These capabilities compound. Every compliance workflow we automate strengthens our models across the entire client base, and when you're processing approximately $20 billion in payroll annually, that compounding effect on system-wide intelligence is very meaningful.

Pat Goepel: Every compliance workflow we automate strengthens our models across the entire client base. When you're processing approximately $20 billion in payroll annually, that compounding effect on system-wide intelligence is very meaningful. Internally, the same AI foundation is accelerating product development, sharpening sales intelligence, and improving support operations, all of which we expect to continue to expand the margin profile over time. The result: higher accuracy, greater efficiency, and a structural lower cost to serve with human accountability preserved for every compliance-sensitive decision. In short, we are a system of record business with compounding data gravity operating in a highly regulated, compliance-critical environment. This is an entirely different category than the SaaS segments where disruption concerns are most valid, and we remain confident in both the durability of our model and the opportunity that AI creates for us going forward.

Speaker #4: Internally, the same AI foundation is accelerating product development, sharpening sales intelligence, and improving support operations—all of which we expect to continue to expand the margin profile over time.

Speaker #4: The result: higher accuracy, greater efficiency, and a structurally lower cost to serve, with human accountability preserved for every compliance-sensitive decision. In short, we are a system-of-record business with compounding data gravity, operating in a highly regulated, compliance-critical environment.

Pat Goepel: In short, we are a system of record business with compounding data gravity operating in a highly regulated, compliance-critical environment. This is an entirely different category than the SaaS segments where disruption concerns are most valid, and we remain confident in both the durability of our model and the opportunity that AI creates for us going forward. With that, I'd like to turn the call over to John to discuss our Q1 financial results in more detail and provide an update on our 2026 guidance. John?

Speaker #4: This is an entirely different category than the SAS segments where disruption concerns are most valid, and we remain confident in both the durability of our model and the opportunity that AI creates for us going forward.

Speaker #4: With that, I'd like to turn the call over to John to discuss our quarter one financial results in more detail and provide an update on our 2026 guidance.

Pat Goepel: With that, I'd like to turn the call over to John to discuss our Q1 financial results in more detail and provide an update on our 2026 guidance. John?

Speaker #4: John?

Speaker #5: Thanks, Pat. As Patrick noted, several figures discussed today are on a non-gap or adjusted basis. Reconciliations are available in our meeting and our earnings release and our investor presentation at investor.asuresoftware.com.

John Pence: Thanks, Pat. As Patrick noted, several figures discussed today are on a non-GAAP or adjusted basis. Reconciliations are available in our meeting, in our earnings release, and our investor presentation at investor.asuresoftware.com. First quarter total revenues were $42.8 million, compared to $34.9 million in Q1 2025, representing growth of 23% year over year. Recurring revenue for Q1 2026 was $37.8 million, compared to $33.2 million in Q1 2025, an increase of over 14% year over year. Recurring revenue represented approximately 88% of total revenue in the quarter. We believe that in 2026, recurring revenue as a percentage of total revenue will be in the low 90% range, and we anticipate it will continue to trend upwards in 2027.

John Pence: Thanks, Pat. As Patrick noted, several figures discussed today are on a non-GAAP or adjusted basis. Reconciliations are available in our meeting, in our earnings release, and our investor presentation at investor.asuresoftware.com. First quarter total revenues were $42.8 million, compared to $34.9 million in Q1 2025, representing growth of 23% year-over-year. Recurring revenue for Q1 2026 was $37.8 million, compared to $33.2 million in Q1 2025, an increase of over 14% year-over-year. Recurring revenue represented approximately 88% of total revenue in the quarter. We believe that in 2026, recurring revenue as a percentage of total revenue will be in the low 90% range, and we anticipate it will continue to trend upwards in 2027.

Speaker #5: First quarter total revenues were $42.8 million, compared to $34.9 million in Q1 2025, representing growth of 23% year over year. Recurring revenue, for Q1 2026, was $37.8 million, compared to $33.2 million in Q1 2025, an increase of over 14% year over year.

Speaker #5: Recurring revenue represented approximately 88% of total revenue in the quarter. We believe that in 2026, recurring revenue as a percentage of total revenue will be in the low 90% range, and we anticipate it will continue to trend upwards in 2027.

Speaker #5: Professional services and hardware revenue was $5 million in Q1 2026. Compared to $1.7 million in Q1 2025. The increase in non-recurring revenue was primarily due to hardware sales from our Latham acquisition.

John Pence: Professional services and hardware revenue was $5 million in Q1 2026, compared to $1.7 million in Q1 2025. The increase in non-recurring revenue was primarily due to hardware sales from our Lathem acquisition and professional services tied to enterprise tax. Total revenue was relatively flat in Q1 2026 compared to Q1 2025. We have modeled 2 additional rate cuts in 2026, which we anticipate will be partially offset by continued growth in client fund balances. Gross profit for Q1 2026 was $30.5 million, compared to $24.6 million in Q1 2025. GAAP gross margin for Q1 2026 was 71%, in line with Q1 2025. non-GAAP gross margin for Q1 2026 was 76%, compared to 75% in Q1 2025.

Speaker #5: And professional services tied to enterprise tax. Total revenue was relatively flat in Q1 2026 compared to Q1 2025. We have modeled two additional rate cuts in 2026, which we anticipate will be partially offset by continued growth in client fund balances.

Speaker #5: Growth profit for Q1 2026 was $30.5 million, compared to $24.6 million in Q1 of 2025. Gap gross margin for Q1 2026 was 71%, in line with Q1 of 2025.

Speaker #5: Non-gap gross margin for Q1 2026 was 76%, compared to 75% in Q1 of 2025. Net income for Q1 2026 was $0.6 million, compared to a net loss of $2.4 million in Q1 of 2025.

John Pence: Net income for Q1 2026 was $0.6 million, compared to a net loss of $2.4 million in Q1 2025. EBITDA for Q1 2026 was $9.4 million, compared to $4.1 million in Q1 2025. Adjusted EBITDA for Q1 2026 was $12.3 million, compared to $7.3 million in Q1 2025, an increase of 69% year over year. Adjusted EBITDA margin for Q1 2026 was 29%, compared to 21% in Q1 2025, an increase of approximately 800 basis points.

John Pence: Net income for Q1 2026 was $0.6 million, compared to a net loss of $2.4 million in Q1 2025. EBITDA for Q1 2026 was $9.4 million, compared to $4.1 million in Q1 2025. Adjusted EBITDA for Q1 2026 was $12.3 million, compared to $7.3 million in Q1 2025, an increase of 69% year-over-year. Adjusted EBITDA margin for Q1 2026 was 29%, compared to 21% in Q1 2025, an increase of approximately 800 basis points.

Speaker #5: EBITDA for Q1 2026 was $9.4 million, compared to $4.1 million in Q1 2025. Adjusted EBITDA for Q1 2026 was $12.3 million, compared to $7.3 million in Q1 2025.

Speaker #5: An increase of 69% year over year. Adjusted EBITDA margin for Q1 2026 was 29%, compared to 21% in Q1 of 2025. An increase of approximately 800 basis points.

Speaker #5: For the full year, we continue to expect to generate positive unlevered free cash flow in the mid to high teens range. Which we calculate by taking adjusted EBITDA at the midpoint of our guidance range less software capitalization of approximately 15 to 16 million and approximately 6 million in cash interest cost.

John Pence: For the full year, we continue to expect to generate positive unlevered free cash flow in the mid to high teens range, which we calculate by taking adjusted EBITDA at the midpoint of our guidance range, less software capitalization of approximately $15 to 16 million and approximately $6 million in cash interest cost. We ended Q1 with cash and cash equivalents of $19.2 million and debt of $68.8 million as of 31 March 2026. Based on continued positive momentum in our business, we are updating our full year 2026 guidance and also providing Q2 guidance. It's important to keep in mind that the Q1s are seasonally strong as recurring year-end W-2 ACA revenue is recognized in this period.

Speaker #5: The end of the first quarter with cash and cash equivalents of $9.2 million. And debt of $68.8 million, as of March 31, 2026. Based on continued positive momentum in our business, we are updating our full year 2026 guidance and also providing Q2 guidance.

Speaker #5: It's important to keep in mind that the first quarters are seasonally strong as recurring year-end W2ACA revenue is recognized in this period. Full year 2026 guidance: revenue of $159 million to $163 million.

John Pence: Full year 2026 guidance, revenue of $159 to 163 million and adjusted EBITDA margin of 23% to 25%. Q2 2026 guidance, revenue of $36 to 38 million and adjusted EBITDA of $6 to 8 million. Our cost structure, including CapEx and capitalized R&D, is expected to remain relatively stable on a dollar basis. With that, I'll turn the call back to Pat for closing remarks.

Speaker #5: And adjusted EBITDA margin of $23 to $25%. Q2 2026 guidance: revenue of $36 million to $38 million. And adjusted EBITDA of $6 to $8 million.

Speaker #5: Our cost structure, including CapEx and capitalized R&D, is expected to remain relatively stable on a dollar basis. With that, I'll turn the call back to Pat for closing remarks.

Pat Goepel: Thanks, John. Q1 2026 marks continued progress towards the inflection point we've been building toward. With AsureCentral now substantially adopted across our direct client base, our Luna AI delivering measurable efficiency gains, AsureWorks gaining early traction, and our sales force growing towards 150 reps, we're executing on the plan we've been sharing with investors. We believe we are at an important inflection point in the business where growth and profitability are advancing together. This combination, top-line momentum, bottom-line discipline at the same time, is what we've been working towards, and we're very pleased to be delivering on it. We remain on track toward our medium-term target of $180 to $200 million in revenues with adjusted EBITDA margins of 30% or better, a level we came within close range of during this quarter and in Q4 2025.

Speaker #6: Thanks, John. Quarter one 2026 marks continued progress towards the inflection point we've been building toward. With the SURE Central now substantially adopted across our direct client base, our Luna AI delivering measurable efficiency gains assure work skinning early traction in our Salesforce growing towards 150 reps where executing on the plan we've been sharing with investors.

Speaker #6: We believe we are at an important inflection point in the business where growth and profitability are advancing together. This combination, top-line momentum, bottom-line discipline at the same time, is what we've been working toward.

Speaker #6: And we're very pleased to be delivering on it. We remain on track toward our medium-term target of $180 million to $200 million in revenues with adjusted EBITDA margins of 30% or better a level we came within close range of during this quarter and in quarter four 2025.

Speaker #6: In our longer-term vision, which we have discussed with investors, reflects the potential for margins to expand well beyond 30% as we achieve scale. AI continues to reduce our costs to serve while simultaneously expanding our market and revenue opportunities.

Pat Goepel: Our longer term vision, which we have discussed with investors, reflects the potential for margins to expand well beyond 30% as we achieve scale. AI continues to reduce our cost to serve while simultaneously expanding our market and revenue opportunities. We're excited about 2026 and remain committed to delivering value to our shareholders, our clients, and our stakeholders. Thank you for joining us today. Now I'll send the call back to the operator for the question and answer session. Operator?

Speaker #6: We're excited about 2026 and remain committed to delivering value to our shareholders, our clients, and our stakeholders. Thank you for joining us today and now.

Speaker #6: I'll send the call back to the operator for the question and answer session. Operator?

Speaker #1: 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.

Operator 2: 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. 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. 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 have an opportunity to do so as well. One moment, please, while we poll for questions. Our first question comes from Jeff Van Rhee with Craig-Hallum Capital Group. Please proceed with your question.

Operator: 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. 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. 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 have an opportunity to do so as well. One moment, please, while we poll for questions. Our first question comes from Jeff Van Rhee with Craig-Hallum Capital Group. Please proceed with your question.

Speaker #1: 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 #1: 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 have an opportunity to do so as well.

Speaker #1: One moment, please, while we pull for questions. Our first question comes from Jeff Vanry with Craig Hallam Capital Group. Please proceed with your question.

Speaker #7: Great, thanks. Thanks for taking the questions. Pat, just a couple quick ones for you. On Asure Central, I'm curious—now that you're getting a little further into it, what are you observing with respect to the path of adoption as people get single sign-on capabilities and are getting exposed to more products?

Jeff Van Rhee: Great. Thanks. Thanks for taking the questions, Pat. Just a couple quick ones for you. On Asure Central, I'm curious, you know, now that you're getting a little further into it, what are you reserving with respect to the path of adoption as people get single sign-on capabilities and are getting exposed to more products? Just kind of curious what the paths of adoption are looking like so far.

Speaker #7: Just kind of curious what the paths of adoption are looking like so far.

Speaker #3: Yeah. Really, really pleased attach rates were up about 15% year over year. People are really getting into the flow of it. And I think more important than that, it's one of the reasons why we also introduced the SURE Works.

Pat Goepel: Yeah, really, really pleased. You know, attach rates were up about 15% year over year. People are really getting into the flow of it. I think more important than that, it's one of the reasons why we also introduced AsureWorks. You know, the bigger story for us with small and medium-sized businesses is we can go to a small business and say, you know, Hey, we'll give you the tools to manage compliance end-to-end across all products in human capital management, or we can do the work for you. Because we have the proof point AsureCentral, where all the products are under a single pane of glass, the light bulbs are starting to go on. I think we're early innings yet, but boy, we're really, really pleased.

Pat Goepel: Yeah, really, really pleased. You know, attach rates were up about 15% year-over-year. People are really getting into the flow of it. I think more important than that, it's one of the reasons why we also introduced AsureWorks. You know, the bigger story for us with small and medium-sized businesses is we can go to a small business and say, you know, Hey, we'll give you the tools to manage compliance end-to-end across all products in human capital management, or we can do the work for you. Because we have the proof point AsureCentral, where all the products are under a single pane of glass, the light bulbs are starting to go on. I think we're early innings yet, but boy, we're really, really pleased.

Speaker #3: The bigger story for us with is we can go to a small business and say, "Hey, we'll give you the tools to manage compliance and then across all products and human capital management, or we can do the work for you." And because we have the proof point of SURE Central where all the products are under a single pane of glass, the light bulbs are starting to go on.

Speaker #3: So I think we're early innings yet. But boy, we're really, really pleased. And then our acquisition of Lathom, which we acquired in July, they're undergoing a SURE Central and they'll be largely done in the second quarter here.

Pat Goepel: Our acquisition of Lathem, which we acquired in July, they're undergoing AsureCentral, and they'll be largely done in the Q2 here. Really, really pleased with our sales motion, our customer service motion. You know, the other thing that's coming out, which is interesting, is the prompts or the trigger events. If you get to 20 employees and, you know, now by law, you have to offer COBRA, it's almost a no-brainer to say, Hey, do you want Asure to manage that for you? As opposed to, you know, try to introduce that somewhere else. If you're in a state that 401K is a regulatory requirement, you know, Hey, we noticed you don't have any 401K deductions.

Speaker #3: So really, really pleased with our sales motion, our customer service motion, and the other thing that's coming out, which is interesting, is the prompts or the trigger events.

Speaker #3: So if you get to 20 employees and now by law you have to offer COBRA, it's almost a no-brainer to say, "Hey, do you want a SURE to manage that for you as opposed to try to introduce that somewhere else?" Or if you're in a state that 401(k) is a regulatory requirement, "Hey, we noticed you don't have any 401(k) deductions.

Speaker #3: Would you like us to help you with that plan?" It's a real easy conversation. So we're just getting started, but those are some of the things that are popping out quickly.

Pat Goepel: Would you like us to help you with that plan? It's a real easy conversation. We're just getting started, but those are some of the things that are popping out quickly.

Speaker #7: Yep, that's helpful. And in the deck, you talk about the expanding Peppum. Can you talk—I mean, I can see you're taking it from 15 in 2020 to $100 in 2026.

Jeff Van Rhee: Yep, that's helpful. In the deck, you talk about expanding PEPM. I mean, I can see you're taking it from 15 in 2020 to $100 in 2026. Where by your math are you at this point in terms of PEPM? Any thoughts on, you know, 2027, 2028 trending? Just get a sense. I know what the potential is, but where are you and where do you think you can be?

Speaker #7: But where, by your math, are you at this point in terms of Peppum, and any thoughts on '27, '28 trend, just to get a sense?

Speaker #7: I know what the potential is, but where are you and where do you think you can be?

Speaker #3: Yeah. You know what? I would say right now is we have kind of an internal goal that we're shooting for two products to four products because we have a direct model and an indirect model etc.

Pat Goepel: Yeah, you know what I would say right now is, you know, we have kind of an internal goal that we're shooting for 2 products to 4 products because we have a direct model and a indirect model, et cetera. In the investor deck, we have 64% of our business in the small kind of mid-business, and it's a focus area for more and more products. We'll have a better kind of RPU, but, you know, from an intentionality perspective, you know, we were kind of in the area, you know, $12 to 15 per employee per month. I think what you're going to see is a double here over the next 3 years or so, and you're gonna see. You know, I would say we're pretty optimistic right now, but, you know, it is the Q1.

Speaker #3: In the investor deck, we have 64% of our business in the small kind of mid business, and it's a focus area for more and more products.

Speaker #3: We'll have a better kind of RPU, but from an intentionality perspective, we were kind of in the area 12 to 15 dollars per employee per month.

Speaker #3: I think what you're going to see is a double here over the next three years or so. And you're going to see I would say we're pretty optimistic right now, but it is the first quarter.

Speaker #3: I think we'll have a better answer here when we get Lathom in and probably on the second earnings call. But I would be disappointed with the that we don't do a double over the next two to three years here.

Pat Goepel: I think we'll have a better answer here, when we get Lathem in and probably on the second earnings call. You know, I would be disappointed that we don't do a double over the next, you know, 2 to 3 years here.

Speaker #7: Yeah. I mean, you've certainly added an incredible amount of breadth to the product set over the last several years, so it makes sense. One last maybe for me on tax season impact, just what was the seasonal uplift in Q1 from tax season?

Jeff Van Rhee: I mean, you've certainly added an incredible amount of breadth to the product set over the last several years, so makes sense. One last maybe for me on tax season, impact. Just what was the seasonal uplift in Q1 from tax season?

Pat Goepel: You know, are you talking W-2s or are you talking?

Speaker #3: W, are you talking W-2s or are you talking float or?

Jeff Van Rhee: Yes

Pat Goepel: float or, you know?

Speaker #7: Yeah. No, W-2s. Sorry.

Jeff Van Rhee: No.

Pat Goepel: Yeah.

Jeff Van Rhee: W-2s. Sorry.

Pat Goepel: You know, we were probably up in the area of 300,000 or so on, you know, W-2s and ACA. Some of our employee count, they have a, you know, a PEPM environment where we don't bill separately for W-2s, but for the ones we bill separately, you know, it's about a 6% increase. I would say anecdotally, float balances, you know, end of the quarter in double digit increase in float balances.

Speaker #3: We were probably up in the area of 300,000 or so on W-2s and ACA. Some of our employee count, they have a Peppum environment where we don't bill separately for W-2s, but for the ones we bill separately, it's about a 6% increase.

Speaker #3: And I would say anecdotally, float balances end of the quarter and double digit increase in float balances.

Speaker #7: Got it. Great. Okay. I'll leave it there. Thank you.

Jeff Van Rhee: Got it. Great. Okay, I'll leave it there. Thank you.

Speaker #3: Thanks, Jeff.

Pat Goepel: Thanks, Jeff.

Speaker #1: Our next question comes from Joshua O'Reilly with Needham & Co. Please proceed with your question.

Operator 2: Our next question comes from Joshua Reilly with Needham & Company. Please proceed with your question.

Operator: Our next question comes from Joshua Reilly with Needham & Co. Please proceed with your question.

Speaker #7: Great, thank you for taking my questions here. I just wanted to start off on the last piece you were talking about there with the forms growth.

Joshua Reilly: Great. Thank you for taking my questions here. I just wanted to start off on the last piece you were talking about there with the forms growth. You know, the 7% organic growth is pretty impressive versus what? 3.5% the last couple of years in Q1. How much of a headwind or a tailwind, I guess, was the forms growth in this March quarter versus the last couple of years? Because I know it's been a headwind the last couple of years. I know you just threw out the 6% number. What was that referencing exactly? Was that the forms growth for the quarter?

Speaker #7: The 7% organic growth is pretty impressive. Versus what? Three and a half percent the last couple of years in the first quarter. How much of a headwind or a tailwind, I guess, was the forms growth in this March quarter versus the last couple of years?

Speaker #7: Because I know it's been a headwind the last couple of years and I know you just threw out the 6% number. What was that referencing exactly?

Speaker #7: Was that the forms growth for the quarter?

Pat Goepel: That was the forms growth. Really, Josh, there was no headwind in forms growth. Maybe it's 1%.

Speaker #3: That was the forms growth. So really, Josh, there was no headwind in forms growth. Maybe it's 1%.

Speaker #7: Got it. And in the prior two years, there was somewhat of more of a headwind. Is that the right way to think about it?

Joshua Reilly: Got it. In the prior 2 years, there was somewhat more of a headwind. Is that the right way to think about it?

Speaker #7: The less of a headwind in this year.

Pat Goepel: Well, you know.

Joshua Reilly: Less of a headwind in this year.

Pat Goepel: Yeah, if you think, you know, you had the, you know, the great resignation, and then you had kind of the great stay, you know, during a couple of those periods, turnover was really heavy, which would add more to W-2s. When you stay, it was a little bit less. There was a headwind, you know, a couple percentage points in that area.

Speaker #3: Yeah. If you think you had the great resignation and then you had kind of the great stay, during a couple of those periods, turnover was really heavy, which would add more to W-2s.

Speaker #3: And then when you stay, there's a little bit less. So there was a headwind a couple percentage points in that area.

Speaker #7: Got it. Thank you. And then on the Lathom transition, the business model transition, how is that going? Because the hardware revenue was a little bit above my estimates here for the March quarter.

Joshua Reilly: Got it. Thank you. Then on the Lathem transition, the business model transition, how is that going? Because the hardware revenue was a little bit above my estimates here for the March quarter. Just curious, is that still on track with your expectations entering the year?

Speaker #7: And just curious, is that still on track with your expectations entering the year?

Speaker #3: Yeah, I think so. I'm not sure that the hardware was that much up. I think we also had some pretty healthy professional services, Josh.

John Pence: I think so. I'm not sure that the hardware was that much up. I think we also had some pretty healthy professional services, Josh, with regard to some of the larger tax implementations. I think from my perspective, Lathem hardware is kind of in line with last year and nothing too crazy. In terms of the integration and the plan, I would say we're gonna be in earnest the H2 of this year and into next converting to that half model. Early stages, and we haven't started to see that transition, which will again obviously be really good for the mix of revenue, right? Turn it into recurring, it'll put some pressure on the non-recurring side, right?

Speaker #3: With regard to some of the larger tax implementations. So I think from my perspective, Lathom hardware is kind of in line with last year and nothing too crazy.

Speaker #3: In terms of the integration and the plan, I would say we're going to be in earnest to back half of this year and into next converting to that half model.

Speaker #3: So early stages, and we haven't started to see that transition, which will, again, obviously be really good for the mix of revenue, right? Turn it into recurring.

John Pence: Turn it into recurring, it'll put some pressure on the non-recurring side, right? On the compares, we're gonna be adding a lot more recurring revenue in a couple quarters, and you're gonna see a decrease in non-recurring. Again, good for the health of the business, but it'll be a little bit of a transition in terms of the specs. That's what we expect to happen kind of in the next, I would say 18 months to 2 years.

Speaker #3: But it'll put some pressure on the non-recurring side, right? So on the compares, we're going to be adding a lot more recurring revenue in the next couple of quarters, and you're going to see a decrease in non-recurring.

John Pence: On the compares, we're gonna be adding a lot more recurring revenue in a couple quarters, and you're gonna see a decrease in non-recurring. Again, good for the health of the business, but it'll be a little bit of a transition in terms of the specs. That's what we expect to happen kind of in the next, I would say 18 months to 2 years.

Speaker #3: Again, good for the health of the business, but it'll be a little bit of a transition in terms of the specs. That's what we expect to happen kind of over the next I would say 18 months to two years.

Speaker #7: Yeah. And then, Josh, just what I would say really, really pleased with the Lathom acquisition overall. It was absolutely the right acquisition for us.

Pat Goepel: Yeah. Then Josh.

Joshua Reilly: Got it.

Pat Goepel: ... just what I would say, really, really pleased with the Lathem acquisition overall. It was absolutely the right acquisition for us. Our customers love it. You know, anecdotally, the install times and the coordination around multi-product implementations has gone really, really well.

Speaker #7: Our customers love it. And anecdotally, the insult times and the coordination around multi-product implementations has gone really, really well. Last point for me is on the enterprise payroll tax deals.

Joshua Reilly: Last point from me is on the enterprise payroll tax deals. We've seen some kind of mixed feedback in the market about ERP migrations. How important is a cloud ERP migration for you, or just any type of ERP migration, for you to win business there? Can you still win some deals even if ERP migrations, you know, are in a period that's a little bit slower?

Speaker #7: Can you just give us we've seen some kind of mixed feedback in the market about ERP migrations. How important is a cloud ERP migration for you or just any type of ERP migration?

Speaker #7: For you to win business there? And can you still win some deals even if ERP migrations are in a period that's a little bit slower?

Speaker #3: Yeah. First of all, Josh, and I hope you appreciate this. In addition to analysts and investors, we have people from Team Red on the call who is our primary competitor.

Pat Goepel: Yeah. First of all, you know, Josh, and I hope you appreciate this, in addition to analysts and investors, we have people from Team Red on the call, who is our primary competitor. I can't go too much in detail like I used to be able to 'cause they've noticed us. Anyway, what I'd like to talk about there is, first of all, the market for tax is really compelling. We think we're, you know, miles ahead of the competition. I think we have a really good offering there, and we're gonna continue to grow in that area.

Speaker #3: So I can't go too much in detail. I used to be able to because they've noticed us. But anyway, what I'd like to talk about there is, first of all, the market for tax is really compelling.

Speaker #3: We think we're miles ahead of the competition. I think we have a really good offering there. And we're going to continue to grow in that area.

Speaker #3: As far as ERP migrations or implementations, first of all, we do a lot of times we are the tail, not the dog in the sense that when somebody goes to an Oracle or a UKG or an SAP or a Workday, what happens is we are the timing of some of those deals are when they do implement with ERP.

Pat Goepel: As far as ERP migrations or implementations, first of all, we do, you know, a lot of times, you know, we are the tail, not the dog, in the sense that when somebody goes to an Oracle or a, you know, a UKG or an SAP or a Workday, what happens, you know, is we are the timing of some of those deals are when they do implement with ERP. You know, sometimes that can lengthen a install center, but install cycle, but it absolutely, you know, actually it's the market right now for compliance and tax services, especially with, you know, how we go about it with AI is very strong.

Speaker #3: So sometimes that can lengthen an install center, or install cycle. But it absolutely—actually, the market right now for compliance and tax services, especially with how we go about it with AI, is very strong.

Speaker #7: And then, thank you very much.

Joshua Reilly: Got it. Thank you very much.

Pat Goepel: Eyal Goldstein's here. Real quick. Joshua, Eyal Goldstein's here. We're lucky to have him today. You know, I don't know if you wanna comment on that, you know, please.

Speaker #3: Real quick, Josh, Yale Goldstein's here. We're lucky to have them today. I don't know. If you want to comment on that, please.

Speaker #8: Yeah, Josh. So we also have a really big opportunity not only on the greenfield, new ERP deployments, but also the current install base. And we're doing quite a bit of work within the current base.

Eyal Goldstein: Josh, we also have a really big opportunity not only on the greenfield new ERP deployments, but also the current install base. We're doing quite a bit of work within the current base, and we've got such a long runway there as well. We're not seeing any impact from what might be happening with the broader group around ERP in general.

Speaker #8: And we've got such a long runway there as well. So we're not seeing any impact from what might be happening with the broader group around ERP in general.

Speaker #7: Thank you.

Joshua Reilly: Thank you.

Speaker #1: Our next question comes from Brian Bergen with TD Cowen. Please proceed with your question.

Operator 2: Our next question comes from Bryan Bergin with TD Cowen. Please proceed with your question.

Operator: Our next question comes from Bryan Bergin with TD Cowen. Please proceed with your question.

Speaker #9: Hi, this is actually Gerard Levine for Brian tonight. To start, can you talk about your managed service offerings, the recent announcements there, what you see in terms of the revenue opportunity including the Pepum uplift specifically from those managed service offerings?

Jared Levin: Hi, this is actually Jared Levin on for Bryan tonight. To start, can you talk about your managed service offerings, the recent announcements there, what you see in terms of the revenue opportunity, including the PEPM uplift specifically from those managed service offerings?

Jared Levine: Hi, this is actually Jared Levin on for Bryan tonight. To start, can you talk about your managed service offerings, the recent announcements there, what you see in terms of the revenue opportunity, including the PEPM uplift specifically from those managed service offerings?

Speaker #7: Yeah. I mean, first of all, I'm sure we're really excited about it. The fact that we could do it all for them or a customer doesn't necessarily have to hire a full-time either payroll or HR professional and they can help us.

Pat Goepel: Yeah, I mean, first of all, AsureWorks, we're really excited about it. You know, the fact that, you know, we can do it all for them, or a customer doesn't necessarily have to hire a full-time, you know, either payroll or HR professional, and they can help us, you know, they can use us to help them. You know, forest from the trees, you know, we see an opportunity about $50 or so per employee per month where, you know, we're doing the work for them. Now, you know, some of that can change based on the size and scale of the customer and the breadth of what we're doing, but that's the kind of opportunity we see with AsureWorks. We have had this in motion for quite some time.

Speaker #7: They can use us to help them. Force from the trees, we see an opportunity about $50 or so per employee per month where we're doing the work for them.

Speaker #7: Now, some of that can change based on the size and scale of the customer and the breadth of what we're doing. But that's the kind of opportunity we see with the sure works.

Speaker #7: We have had this in motion for quite some time. We had one of our resellers kind of pilot the program, and we've since acquired that reseller.

Pat Goepel: We had one of our resellers kind of pilot the program, and we since acquired that reseller, and then we're rolling that out, that model out all across the country. You know, I would say it's more of a 2027, 2028 initiative, but I do think you'll see, you know, somewhere around, you know, kinda $3 to 5 million in opportunity in this year's revenue. Over time, it's gonna continue to grow and that's what's exciting for us. You know, not only that, but when you can go to a customer, they don't need to go to a PEO or employee leasing to get all their kind of compliance and all their offering done where we can do it for them or the same software that we're doing it for them, they can use internally.

Speaker #7: And then we're rolling that model out to the all across the country. I would say it's more of a 27, 28 initiative, but I do think you'll see somewhere around kind of three to five million in opportunity in this year's revenue.

Speaker #7: But over time, it's going to continue to grow. And that's what's exciting for us. And not only that, but when you can go to a customer they don't need to go to a PEO or employee leasing to get all their kind of compliance and all their offering done, where we can do it for them, or the same software that we're doing it for them, they can use internally, we think that's a real compelling message.

Pat Goepel: We think that's a real compelling message. Even if we don't get the entire business, you know, we're gonna get a good majority of the business. Many times we'll pitch that, if you will, and they say, Well, you know, maybe we'll start with HR compliance, and we'll start with benefits, or we'll start with payroll tax and time. You know, we think we're just getting started. We had 6 people offering or selling it today, you know, clearly we've exposed the sales organization, and we have a set of learning and development training going on to roll this out. We're pretty bullish on this.

Speaker #7: And even if we don't get the entire business, we're going to get a good majority of the business. So many times we'll pitch that, if you will, and they'd say, "Well, maybe we'll start with HR benefits." Or, "We'll start with payroll tax and time." So we think we're just getting started.

Speaker #7: We had six people offering or selling it today, but clearly, we've exposed the sales organization and we have a set of learning and development training going on to roll this out.

Speaker #7: So we're pretty bullish on this.

Speaker #8: Great. And then the follow-up here in terms of the guidance. So it looks like you didn't pass through all of the quarterly revenue and adjusted EBITDA beat.

Jared Levin: Great. To follow up here in terms of the guidance. It looks like you didn't pass through all of the quarterly revenue and adjusted EBITDA beat. Anything to call out there? Just also want to confirm there was no kind of incremental M&A since the last earnings here.

Jared Levine: Great. To follow up here in terms of the guidance. It looks like you didn't pass through all of the quarterly revenue and adjusted EBITDA beat. Anything to call out there? Just also want to confirm there was no kind of incremental M&A since the last earnings here.

Speaker #8: Anything to call out there and just also want to confirm there was no kind of incremental M&A since the last earnings here?

Speaker #3: Yeah. No M&A. Since the last earnings. And again, we try to kind of get you where we think you need to be for the rest of the year.

Pat Goepel: Yep. No M&A, since the last earnings. Again, we try to kind of get you where we think you need to be for the rest of the year.

John Pence: Yep. No M&A, since the last earnings. Again, we try to kind of get you where we think you need to be for the rest of the year.

Speaker #8: Got it. Thank you.

Jared Levin: Got it. Thank you.

Jared Levine: Got it. Thank you.

Speaker #7: Thank you.

Pat Goepel: Thank you.

Speaker #1: Our next question comes from Eric Martinuzzi with Lake Street. Please proceed with your question.

Operator 2: Our next question comes from Eric Martinuzzi with Lake Street. Please proceed with your question.

Operator: Our next question comes from Eric Martinuzzi with Lake Street. Please proceed with your question.

Speaker #3: Yeah. I wanted to ask about the when the Latham folks come on to Assure Central, will that entire base be viewed as kind of a multi-product adoption customer base?

Eric Martinuzzi: Yeah, I wanted to ask about when the Lathem folks come onto Asure Central, will that entire base be viewed as kind of a multi-product adoption customer base? In other words, should we see a spike in the percentage of customers when we have this same conversation another day?

Speaker #3: In other words, should we see a spike in the percentage of customers when we have this same conversation?

Pat Goepel: Yeah, Eric, what I would say, it depends. We're, you know, in our business, what we do is we have some standalone channels. You know, we'll do a standalone tax channel, for example, where we partner with other payroll companies. We won't cross-sell without their permission into those kind of companies that we have relationships with. What we do with Lathem is, you know, we have some other payroll companies that use Lathem and are partnered with them. You know, we'll respect that the same way. A large majority of the Lathem customers, you know, will be in Asure Central. We're still going through kind of that flow chart, if you will, and those will all be available to cross-sell, et cetera.

Speaker #7: Yeah, Eric. Eric, what I would say it depends. In our business, what we do is we have some standalone channels we'll do a standalone tax channel, for example, where we partner with other payroll companies.

Speaker #7: We won't cross-sell without their permission into those, kind of companies that we have relationships with. And then what we do with Latham is we have some other payroll companies that use Latham and are partnered with them.

Speaker #7: And we'll respect that the same way. But a large majority of the Latham customers will be in Assure Central. We're still going through kind of that floor, if you will.

Speaker #7: And those will all be available to cross-sell, etc. It hasn't really slowed us down because we prioritize Assure Central and the upgrades with the customers that have already been sold, with the cross-sell of Latham products.

Pat Goepel: It hasn't really slowed us down because we prioritize Asure Central and the upgrades with the customers that have already been sold with the cross-sell of Lathem products. Those customers are already on Asure Central. We'll just continue to adopt them through Q2. It will, by no question, add velocity to our cross-sell approach and our attachment of those customers.

Speaker #7: So, those customers are already on Assure Central. We'll just continue to adopt them through the second quarter. It will, by no question, add velocity to our cross-sell approach and our attachment of those customers.

Eric Martinuzzi: Got it. You talked about you're still on target for the 150 sales reps by the end of the year. You finished out at 118, I believe, at the end of 2025. Are we talking about kind of a linear progression on our way to 2026? In other words, I guess a better way to ask the question is, what's the sales headcount now?

Speaker #3: Got it. And then you talked about still on target for the 150 sales reps by the end of the year. You finished out at 118, I believe, at the end of 2025.

Speaker #3: Are we talking about kind of a linear progression on our way to 2026? Or, in other words, I guess a better way to ask the question is, what's the sales headcount now?

Speaker #7: Yeah. We're about 10 under where I really would like to be and ails with me and he can comment. But for us, we've been really choosing quality.

Pat Goepel: Yeah. We're about ten under where I really would like to be, and Eyal with me, and he can comment. You know, for us, we've been really choosing quality. If you think about where we're going with Asure Central and where we're going with AsureWorks, we're looking for people that really have a consultative sell versus, let's say, a product sale. You know, maybe, Eyal, you could talk a little bit about some of the candidates.

Speaker #7: If you think about where we're going with Assure Central and where we're going with Assure Works, we're looking for people that really have a consultative sell versus, let's say, a product sale.

Speaker #7: And maybe you could talk a little bit about some of the candidates and the flow there.

[Analyst]: Yeah

Eyal Goldstein: Yeah

Pat Goepel: The flow there.

[Analyst]: Yeah. Yeah. We've, you know, historically, we've looked at more small business, transactional sales.

Eyal Goldstein: Yeah. Yeah. We've, you know, historically, we've looked at more small business, transactional sales. Professionals, and that worked well for us where we had point solutions and were really selling more, you know, payroll tax deals than anything else. Now that we're selling more of the broader product, the complete product, and especially with AsureWorks, it's a much more consultative sell, it's a much more solution sell, much more disciplined around the sales process and needs analysis and demoing the product and the software, which we're really proud of these days. That just is a different caliber and profile of a sales professional. Now, the good news is, the folks we're bringing in check all those boxes, and they're actually ramping a lot quicker than historically what reps were ramping at. We're being more disciplined about who we're bringing in, and we feel confident we'll get to that 150 by the end of the year.

Speaker #8: Yeah. Yeah. So we've historically, we've looked at more small business, transactional sales professionals. And that worked well for us where we had Point Solutions, and we're really selling more payroll tax deals than anything else.

Eyal Goldstein: professionals, and that worked well for us where we had point solutions and were really selling more, you know, payroll tax deals than anything else. Now that we're selling more of the broader product, the complete product, and especially with AsureWorks, it's a much more consultative sell, it's a much more solution sell, much more disciplined around the sales process and needs analysis and demoing the product and the software, which we're really proud of these days. That just is a different caliber and profile of a sales professional. Now, the good news is, the folks we're bringing in check all those boxes, and they're actually ramping a lot quicker than historically what reps were ramping at.

Speaker #8: Now that we're selling more of the broader product, the complete product, and especially with Assure Works, it's a much more consultative sell. It's a much more solution sell, much more disciplined around the sales process and needs analysis and demoing the product and the software, which we're really proud of these days.

Speaker #8: And so that just is a different caliber and profile of a sales professional. Now, the good news is the folks we're bringing in check all those boxes, and they're actually ramping a lot quicker than historically what reps were ramping at.

Eyal Goldstein: We're being more disciplined about who we're bringing in, and we feel confident we'll get to that 150 by the end of the year.

Speaker #8: But we're being more disciplined about who we're bringing in, and we feel confident we'll get to that 150 by the end of the year.

Speaker #3: Got it. Thanks for taking my question.

Eric Martinuzzi: Got it. Thanks for taking my question.

Speaker #7: Thanks, Eric.

Pat Goepel: Thanks, Eric.

Speaker #1: Our next question comes from Richard Valtre with Roth Capital Partners. Please proceed with your question.

Operator 2: Our next question comes from Richard Baldry with ROTH Capital Partners. Please proceed with your question.

Operator: Our next question comes from Richard Baldry with ROTH Capital Partners. Please proceed with your question.

Speaker #8: Thanks. When you talk about accelerating to double-digit organic growth, could you talk to me about the pieces that get you there? Presumably, some of it's the headcount, but how much of it's ARPU and maybe how much visibility do you have into that acceleration, whether it's in pipeline, retention rate changes, win rate changes, etc.?

Richard Baldry: Thanks. When you talk about accelerating to double-digit organic growth, can you talk to me about the pieces that get you there? You know, presumably some of it's the headcount, but, you know, how much of it's ARPU, and maybe how much visibility do you have into that acceleration, whether it's in pipeline, you know, retention rate changes, win rate changes, et cetera? Thanks.

Speaker #8: Thanks.

Speaker #7: Yeah. Yeah, Rich, thank you. Definitely, the attach rate numbers are really positive, and we have pretty good retention on that. Candidly, in the fourth quarter and first quarter, we did a lot of professional services work.

Pat Goepel: Yeah. Yeah, Richard, thank you. You know, definitely the attach rate numbers are really positive, and we have pretty good retention on that. Candidly, you know, in Q4 and Q1, we did a lot of professional services work. I would say that one time probably is the only thing that's noise in the numbers sometimes because, you know, we have been a little one-time heavy. Now, that ultimately will be a very strong indicator for us. Short term, sometimes you have to grow over bigger compares on the one time.

Speaker #7: And I would say that one-time, probably, is the only thing that's noise in the numbers sometimes, because we have been a little one-time heavy.

Speaker #7: Now, that ultimately will be a very strong indicator for us. But short term, sometimes you have to grow over bigger compares on a one-time.

Speaker #7: But what I would tell you is the ARPU, the attach rate, the number of reps, the rollout of Assure Central, the rollout of Assure Works, Assure Pay, we're right down the we're early days, but I would tell you really good pipeline development, real good underpinning of the pipeline, real good focus on attach rates.

Pat Goepel: What I would tell you is the ARPU, the attach rate, the number of reps, the rollout of Asure Central, the rollout of AsureWorks, AsurePay, you know, we're right down the, you know, we're early days, but I would tell you know, really good pipeline development, real good underpinning of the pipeline, real good focus on attach rates. You know, I can see from our deal alerts, you know, we've had a really exciting, not only Q1, but Q2, and I can see it just based on our hiring profile and our learning and development as people get up to speed. You know, we have pretty good visibility, but, you know, we're also, you know, wanna be conservative in an environment that has a lot of global uncertainty.

Speaker #7: I can see from our deal alerts, we've had a really exciting not only first quarter, but second quarter and I can see it just based on our hiring profile and our learning and development as people get up to speed.

Speaker #7: So we have pretty good visibility, but we're also want to be conservative in an environment that has a lot of global uncertainty. We, for that matter, really haven't pressed same-store sales or we haven't pressed a ton of employment growth or interest rate increases, right?

Pat Goepel: You know, we have pretty good visibility, but, you know, we're also, you know, wanna be conservative in an environment that has a lot of global uncertainty. We, for that matter, really haven't, you know, pressed same-store sales, or we haven't pressed, you know, a ton of employment growth or interest rate increases, right? You know, what we have tried to do is be conservative in our forecast, and hopefully, you know, we can, we can upside and produce an upside income or outside goals in H2.

Pat Goepel: We, for that matter, really haven't, you know, pressed same-store sales, or we haven't pressed, you know, a ton of employment growth or interest rate increases, right? You know, what we have tried to do is be conservative in our forecast, and hopefully, you know, we can, we can upside and produce an upside income or outside goals in H2.

Speaker #7: So what we have tried to do is be conservative in our forecast and hopefully we can upside and produce an outside income or outside goals in the second half.

Richard Baldry: For follow-up, can you talk about the internal, you know, sort of use deployment of newer AI efficiency tools? How much do you feel that that can help you either hold the line on costs, in some areas maybe cut costs to sort of bolster your EBITDA growth maybe in excess of what organic growth might otherwise argue?

Speaker #8: And for follow-up, can you talk about the internal sort of use deployment of newer AI efficiency tools? How much do you feel that that can help you either hold the line on costs in some areas, maybe cut costs to sort of bolster your EBITDA growth, maybe in excess of what organic growth might otherwise argue?

Speaker #7: Yeah. Rich, we're seeing it used all throughout the organization. I mean, there's really not an area that's not started to investigate and start to deploy it.

Eyal Goldstein: Yeah. Rich, we're seeing it used all throughout the organization. I mean, there's really not an area that's not started to investigate and started to deploy it. We're using it in, you know, the finance organization, just basic stuff like doing variance analysis and helping on the forecasting. The operations team is using it to, again, interact with customers and make things more efficient in those interactions with the processing the payrolls. Sales team's doing, you know, a lot of work with the front end of, you know, analyzing customers and getting a lot more effective and a lot more throughput. I think, you know, we're seeing it throughout the organization. I think it's really early days. It's pretty interesting. You're exactly right. I think it's gonna help.

John Pence: Yeah. Rich, we're seeing it used all throughout the organization. I mean, there's really not an area that's not started to investigate and started to deploy it. We're using it in, you know, the finance organization, just basic stuff like doing variance analysis and helping on the forecasting. The operations team is using it to, again, interact with customers and make things more efficient in those interactions with the processing the payrolls. Sales team's doing, you know, a lot of work with the front end of, you know, analyzing customers and getting a lot more effective and a lot more throughput. I think, you know, we're seeing it throughout the organization. I think it's really early days. It's pretty interesting. You're exactly right. I think it's gonna help.

Speaker #7: We're using it in the finance organization. Just basic stuff like doing variance analysis, and helping on the forecasting. The operations team is using it to, again, interact with customers and make things more efficient in those interactions with the processing the payrolls, sales teams doing a lot of work with the front end of analyzing customers and getting a lot more effective and a lot more throughput.

Speaker #7: So I think we're seeing it throughout the organization. And I think it's really, really early days. It's pretty interesting. But you're exactly right. I think it's going to help.

Speaker #7: I don't think we're going to necessarily want to exit a bunch of people, but what we're going to do is we're going to kind of change the profile of what they're doing, right?

Eyal Goldstein: I don't think we're gonna necessarily wanna exit a bunch of people, but what we're gonna do is we're gonna kind of change the profile of what they're doing, right? If somebody was more on the data entry side, interacting with a customer, that's gonna go away or that's gonna be much more diminished. They're gonna be much more involved with making that customer happy, trying to solve their problems, and that goes back to the AsureWorks concept, right? We're really gonna be a lot closer and tighter with the people we've got, servicing the customers and less on the data manipulation side of the business. I think we can do that, and that really changes the cost structure, add to the top line, and ultimately, you're right, it's gonna fall through to the bottom on EBITDA.

John Pence: I don't think we're gonna necessarily wanna exit a bunch of people, but what we're gonna do is we're gonna kind of change the profile of what they're doing, right? If somebody was more on the data entry side, interacting with a customer, that's gonna go away or that's gonna be much more diminished. They're gonna be much more involved with making that customer happy, trying to solve their problems, and that goes back to the AsureWorks concept, right? We're really gonna be a lot closer and tighter with the people we've got, servicing the customers and less on the data manipulation side of the business. I think we can do that, and that really changes the cost structure, add to the top line, and ultimately, you're right, it's gonna fall through to the bottom on EBITDA.

Speaker #7: So if somebody was more on the data entry side, interacting with a customer, that's going to go away or that's going to be much more diminished.

Speaker #7: They're going to be much more involved with making that customer happy. Trying to solve their problems. And that goes back to this Assure Works concept, right?

Speaker #7: We're really going to be a lot closer and tighter with the people we've got. Servicing the customers. And less on the data manipulation side of the business.

Speaker #7: So I think we can do that and not really change the cost structure. Add to the top line, and ultimately you're right, it's going to fall through to the bottom on EBITDA.

Pat Goepel: You know, maybe if you could talk about sales and marketing with AI.

Speaker #7: Maybe if you could talk about sales and marketing with AI.

Eyal Goldstein: Yeah. Yeah. Yeah, Rich. So on the front end, we're using it quite a bit as well. You know, we're doing a lot on the marketing side around content creation and around being able to put out much more thought leadership much quicker. That's helped quite a bit for us. Then on the sales side, we're looking at quite a bit of tools, but what we've implemented already is some AI tools around the needs analysis and discovery. Again, as we do more of these larger deals, in that 20 to 100 space, we're doing much more quicker research.

Speaker #8: Yeah. Yeah, Rich. So on the front end, we're using it quite a bit as well. And we're doing a lot on the marketing side around content creation and around being able to put out much more thought leadership, much quicker.

Speaker #8: That's helped quite a bit. For us. And then on the sales side, we're looking at a we're looking at quite a bit of tools, but what we've implemented already is some AI tools around the needs analysis and discovery and again, as we do more of these larger deals, in that 20 to 100 space, we're doing much more quicker research.

Speaker #8: We're able to get output much quicker around certain companies and maybe who they're competing with or their peers. And help drive more of the front end of the sales process and making sure our reps are well-versed and knowledgeable when they engage with the prospect as well as taking all of the data that they learn from an actual discovery or needs analysis and being able to put a pretty quick deliverable and output with all of our services tied to that.

Eyal Goldstein: We're able to get output much quicker around a certain company and maybe who they're competing with or their peers. Help drive more of the front end of the sales process in making sure our reps are well-versed and knowledgeable when they engage with the prospect. As well as taking all of the data that they learn from an actual discovery or needs analysis and being able to put a pretty quick deliverable and output with all of our services tied to that, and then the ROI and value from it. All of that now for us is done through different AI tools. It's helped speed up quite a bit of the process for us on the front end.

Speaker #8: And then the ROI and value from it. All of that now for us is done through different AI tools. It's helped speed up quite a bit of the process for us on the front end.

Speaker #8: And frankly, now we're leaning into some more technology around the actual outbound motion that we have around the demand gen and we actually think that that'll have quite a big impact on how many people we're able to reach and having really good bespoke conversations with thousands more companies than we would normally have leveraging more human motion around the business development side.

Eyal Goldstein: Frankly, now we're leaning into some more to some more technology around the actual outbound motion that we have around the demand gen. We actually think that that'll have quite a big impact on how many people we're able to reach and having really good bespoke conversations with thousands more companies than we would normally have, leveraging more human motion around the business development side.

Speaker #7: And then finally, Rich, just operationally, we quoted last quarter about 80,000 transactions at Aluna assisted with and over 100,000 this quarter. And so that obviously helps us with scale.

Pat Goepel: Finally, Rich, you know, just operationally, we quoted, you know, last quarter about 80,000 transactions that Luna assisted with and over 100,000 this quarter. That obviously helps us with scale. It helps the customer experience where, you know, they're changing their W-4 withholding with Luna assisting and that. I think what you're gonna see is more velocity in the model, the financial model. I know in our long-term model, you know, we had 40%. We believe over time we can achieve 50, and that's all AI-assisted.

Speaker #7: It helps the customer experience where they're changing their W-4 withholding with Luna assisting and that. So I think what you're going to see is more velocity in the model, the financial model.

Speaker #7: I know in our long-term model, we had 40%. We believe over time we can achieve 50. And that's all AI-assisted.

Speaker #8: Got it. Thanks.

Richard Baldry: Got it. Thanks.

Speaker #1: Our next question comes from Greg Gibbis with Northland Securities. Please proceed with your question.

Operator 2: Our next question comes from Greg Gibas with Northland Securities. Please proceed with your question.

Operator: Our next question comes from Greg Gibas with Northland Securities. Please proceed with your question.

Speaker #9: Hey, good afternoon, Pat, John, Ale. Thanks for taking the questions. Could you discuss the pace of organic growth implied by your guidance to the balance of the year and maybe what your updated expectations perhaps are the same of R4 professional services and hardware on a go-forward basis?

Greg Gibas: Hey, good afternoon, Pat, John, Eyal. Thanks for taking the questions. Could you discuss the pace of organic growth implied by your guidance through the balance of the year, and maybe what your updated expectations perhaps are the same of R4 professional services and hardware on a go-forward basis?

Speaker #7: Yeah. So real quick, at the midpoint of the guide, I think it puts us at kind of roughly around 15% full year, year over year.

Pat Goepel: Yeah. Real quick, at the midpoint of the guide, I think it puts us at kind of roughly around 15% full year over year, in terms of growth. I think it's gonna be kind of split evenly. You know, it'll be a H2 between the organic and inorganic, based on the guide. I think they're obviously the upside. We don't have any acquisitions planned, so the upside to the numbers would be on the organic side right now, as we're sitting today.

Pat Goepel: Yeah. Real quick, at the midpoint of the guide, I think it puts us at kind of roughly around 15% full year-over-year, in terms of growth. I think it's gonna be kind of split evenly. You know, it'll be a H2 between the organic and inorganic, based on the guide. I think they're obviously the upside. We don't have any acquisitions planned, so the upside to the numbers would be on the organic side right now, as we're sitting today.

Speaker #7: In terms of growth, I think it's going to be kind of split evenly. It'll be half and half between the organic and inorganic. Based on the guide.

Speaker #7: So, I think there’s obviously the upside. We don’t have any acquisitions planned, so the upside to the numbers would be on the organic side.

Speaker #7: And right now, as we're sitting today.

Greg Gibas: Got it.

Speaker #9: Got it. And then on yeah, sorry, go ahead.

Greg Gibas: Got it. And then on-

Pat Goepel: And then on-

Greg Gibas: Yeah, sorry, go ahead.

Pat Goepel: Yeah, sorry, go ahead. Go ahead. What was the second part? I'm sorry. Yeah.

Speaker #7: Go ahead. And what was the second part? I'm sorry again.

Pat Goepel: Go ahead. What was the second part? I'm sorry. Yeah.

Speaker #9: Oh, just professional services and hardware. Considering it was a little higher than expected, but I know some of that is seasonal.

Greg Gibas: Just professional services and hardware.

Pat Goepel: Yeah

Greg Gibas: Considering it was a little higher than expected, but I know, some of that is, you know, seasonal.

Speaker #7: Yeah, I think it'll normalize back down to we're going to be in the kind of high 90% recurring for the full year. I do think this quarter was a little heavy, heavier than the rest of the quarters.

Pat Goepel: Yeah, I think it'll normalize back down to we're gonna be in that kind of high 90% recurring for the full year. I do think this quarter was a little heavy, heavier than the rest of the quarters.

Speaker #9: Got it. Got it. And you maybe beat me through this one a little bit, but just on the outlook for reseller acquisitions. And you mentioned nothing since the last earnings.

Greg Gibas: Got it. Got it. You maybe beat me to this one a little bit, but just on the outlook for reseller acquisitions, and, you know, you mentioned nothing since the last earnings. Could you remind us on what's been done year to date? Curious to hear your stance on, you know, incremental strategic platform acquisitions, or is the focus right now just more integration, expanding the sales force, and cross-sell opportunities and then, you know, even the Lathem model transition?

Speaker #9: Could you remind us on what's been done year to date? And curious to hear your stance on incremental strategic platform acquisitions or is the focus right now just more integration, expanding the sales force and cross-sell opportunities, and then even the Latham model transition?

Speaker #7: Yeah. Just really quick. I really feel pretty good about the components of our solution. We've pointed in an area where we've strengthened the products around payroll and have done a really good job there.

Pat Goepel: Yeah. Just really quick, I really feel pretty good about, you know, the components of our solution. You know, we've pointed in a area where, you know, we've strengthened the products around payroll and have done a really good job there. Then with the integration of AsureCentral, you know, the development of AsurePay, you know, we just announced the AsureWorks here, but we've been working on that for a quarter. I really think we got our product kind of set, if you will. Now to me, it's attach rate, attachment rates, ARPU, revenue per unit. You know, we're really gonna try to cross-sell, et cetera. You know, as a reminder, you know, I thought Eyal did a wonderful job leading the sales organization. You know, historically, we're close to 70% new logo.

Speaker #7: And then with the integration of Sure Central, the development of Sure Pay, we just announced the Sure Works here, but we've been working on that for a quarter.

Speaker #7: I really think we got our product kind of set, if you will. Now to me, it's attachment rates, RPU, revenue per unit. We're really going to try to cross-sell, etc.

Speaker #7: As a reminder, I thought Ale did a wonderful job leading the sales organization. Historically, we were close to 70% new logo. Now we're closer to 50/50.

Pat Goepel: You know, now we're closer to 50/50, and, you know, we're not dropping down new logos, right? It really speaks to kind of broadening out the revenue. Now that being said, you know, we do have a reseller kind of network, if you will, and we'll continue to add that. You know, you see and we've published some of the cost takeouts in that model. Also, now that we have the products and services to cross-sell and attach, based on the reseller network, we think it's even more compelling to go that way. I think you'll see a series of, you know, small acquisitions. I don't think you'll see anything major, but that'll be our focus here.

Speaker #7: And we're not dropping down new logos, right? So it really speaks to kind of broadening out the revenue. Now that being said, we do have a reseller kind of network, if you will.

Speaker #7: And we'll continue to add that. You see, and we've published some of the cost takeouts in that model. But also now that we have the products and services to cross-sell and attach, based on the reseller network, we think it's even more compelling to go that way.

Speaker #7: So I think you'll see a series of small acquisitions. I don't think you'll see anything major, but that'll be our focus here.

Speaker #9: Got it. That's helpful. Thank you.

Greg Gibas: Got it. That's helpful. Thank you.

Speaker #10: Oh, and to answer your question, yeah. The only acquisition we talked about on the last earnings call was done kind of in the January timeframe.

Pat Goepel: Oh, to answer your question, yeah, the only acquisition we talked about on the last earnings call was done kind of in the January timeframe.

Speaker #9: That's right. Thank you.

Greg Gibas: That's right. Thank you.

Speaker #1: Our next question comes from Vincent Tolicio with Barrington Research. Please proceed with your question.

Operator 2: Our next question comes from Vincent Colicchio with Barrington Research. Please proceed with your question.

Operator: Our next question comes from Vincent Colicchio with Barrington Research. Please proceed with your question.

Vincent Colicchio: Yeah. Pat, could you talk to the health of your client base? Is it expanding, and are clients hiring in this environment?

Speaker #7: Yeah, Pat, could you talk to the health of your client base? Is it expanding and are clients hiring in this environment?

Vincent Colicchio: Yeah. Pat, could you talk to the health of your client base? Is it expanding, and are clients hiring in this environment?

Speaker #10: No, it's a great question, Vince. I would say in general, it's I think people are cautiously optimistic. I think in some cases, depending where you sit, maybe oil prices is kind of swooped them a little bit or what have you.

Pat Goepel: No, that's a great question, Vince. I would say, in general, it's, I think people are cautiously optimistic. I think, you know, in some cases, depending where you sit, you know, maybe oil prices is kinda-Swoop them a little bit or, you know, what have you. They definitely see a very strong opportunity in the business environment. In some cases, you know, they have a stable employment workforce, which is great. They're trying to figure out, you know, kinda, and separate what they're seeing as good cash register versus, you know, if they listen to, you know, a war or listen to, you know, all the kind of news, sometimes it's a cause for pause, right? I don't see employment growth growing a ton here.

Speaker #10: They're definitely see a very strong opportunity in the business environment. In some cases, they have a stable employment workforce, which is great. They're trying to figure out kind of and separate what they're seeing is good cash register versus if they listen to a war or listen to all the kind of news sometimes it's a cause for pause, right?

Pat Goepel: They're trying to figure out, you know, kinda, and separate what they're seeing as good cash register versus, you know, if they listen to, you know, a war or listen to, you know, all the kind of news, sometimes it's a cause for pause, right? I don't see employment growth growing a ton here. Some of it's just demographic, you know, where you have a little bit of a aging population. You have as many people retiring as coming into the workforce. I would certainly, you know, I see a lot of opportunities. I think, Al, who's on the front line here, would agree to that, I think. For me, it's a very stable, thriving, small business workplace.

Speaker #10: And so I don't see employment growth growing a ton here. And some of it's just demographic. Where you have a little bit of an aging population, you have as many people retiring as coming into the workforce.

Pat Goepel: Some of it's just demographic, you know, where you have a little bit of a aging population. You have as many people retiring as coming into the workforce. I would certainly, you know, I see a lot of opportunities. I think, Al, who's on the front line here, would agree to that, I think. For me, it's a very stable, thriving, small business workplace.

Speaker #10: But I would certainly say I see a lot of opportunities. I think Ale, who's on the front line here, would agree to that, I think.

Speaker #10: And for me, it's a very stable thriving small business workplace.

Vincent Colicchio: Thanks for that. How should we think about the organic growth this quarter? Would you say it was broadly distributed across your core categories?

Speaker #7: Thanks for that. And how should we think about the organic growth this quarter? Would you say it was broadly distributed across your core categories?

Vincent Colicchio: Thanks for that. How should we think about the organic growth this quarter? Would you say it was broadly distributed across your core categories?

Speaker #10: Yeah, I'd say so. I think we're trying to get to a point where we describe the business and it's in the IR deck. There's a pie chart.

John Pence: Yeah, I'd say so. I think, you know, we're trying to get to a point where we describe the business and it's in the IR deck. There's a pie chart. I would say, in general, most of the growth this quarter was probably on the HR, HCM platform side of the business as opposed to enterprise tax. That's the way I would think about it, Vince. I mean, I really think about that's the kind of the buckets that we're trying to describe the business, and so that's where the majority of the growth was this quarter.

Speaker #10: I would say in general, most of the growth this quarter was probably on the ACM platform side of the business as opposed to enterprise tax.

Speaker #10: So that’s the way I would think about it, Vince. I mean, I really think about—that’s kind of the buckets that we’re trying to describe the business.

Speaker #10: And so that's where the majority of the growth was this quarter. And then as far as as far as through the year, I think attachment, attach rates, and RPU growth in small business is going to carry today.

Vincent Colicchio: Thanks, guys.

Pat Goepel: As far as, you know, as far as through the year, I think attachment, attach rates and RPU growth in small business is gonna carry the day. I think you're, you know, we've had some really good milestones of, you know, getting customers live and, you know, we see good prospects in the tax business that have continued to grow. You know, I think we have some professional services and hardware that in some cases will continue professional services as we implement. As far as hardware, I think you'll see a moving of the mix from one time to reoccurring over a period of time, but we'll still have some one time. You know, we have some non-strategic businesses that, you know, will over time not be as focused, but will continue to be with it.

Speaker #10: I think your we've had some really good milestones of getting customers live and we see good prospects in the tax business. And I'll continue to grow.

Speaker #10: I think we have some professional services and hardware that, in some cases, will continue professional services as we implement. But as far as hardware, I think you'll see a moving of the mix from one-time to recurring over a period of time.

Pat Goepel: As far as hardware, I think you'll see a moving of the mix from one time to reoccurring over a period of time, but we'll still have some one time. You know, we have some non-strategic businesses that, you know, will over time not be as focused, but will continue to be with it. AsureWorks, AsureCentral, AsurePay, you know, we're gonna lean in there. We're gonna absolutely continue to grow our money movement and compliance offerings up and down the HR stack.

Speaker #10: But we'll still have some one time. And then we have some non-strategic businesses that will over time not be as focused but will continue to be with it.

Speaker #10: But really, a sure works, Sure Central, Sure Pay, we're going to lean in there and then we're going to absolutely grow our continue to grow our money movement and compliance offerings up and down the HR stack.

Pat Goepel: AsureWorks, AsureCentral, AsurePay, you know, we're gonna lean in there. We're gonna absolutely continue to grow our money movement and compliance offerings up and down the HR stack.

Speaker #7: Thanks, guys. Nice quarter.

Vincent Colicchio: Thanks, guys. Nice quarter.

Speaker #10: Thank you.

Pat Goepel: Thank you.

Speaker #9: Thanks, Vince.

John Pence: Thanks, Vince.

Speaker #1: We have reached the end of our question and answer session. I would now like to turn the floor back over to Pat Kettle for closing comments.

Operator 2: We have reached the end of our question and answer session. I would now like to turn the floor back over to Pat Goepel for closing comments.

Operator: We have reached the end of our question and answer session. I would now like to turn the floor back over to Pat Goepel for closing comments.

Speaker #11: Yeah, hey, I appreciate each and every one of you from an investor perspective and an analyst. We have a great analyst community and they do a good job representing a sure software and then as far as if you've been an investor with us here a while, would continue to make progress.

Pat Goepel: Yeah. Hey, I appreciate each and every one of you from an investor perspective and an analyst. We have a great analyst community, and they do a good job representing, you know, Asure Software. Then as far as if you've been an investor with us here a while, we'll continue to make progress. I think we're pretty consistent. You know, we have the investor deck on the customer website. I would say, you know, we've done some non-deal roadshows. With Patrick coming on board, you know, we're gonna have some conferences here throughout the year. Definitely I'm coming to New York here soon on on some investor conferences. We look forward to meeting you and seeing you soon. We're very thankful for you.

Speaker #11: I think we're pretty consistent. We have the investor deck on the customer website. I would say we've done some non-deal roadshows, and with Patrick coming on board, we're going to have some conferences here throughout the year. And definitely, I'm coming to New York here soon for some investor conferences.

Speaker #11: So, we look forward to meeting you and seeing you soon. And we're very thankful for you, and just keep following our progress because we're pretty confident in our growth.

Pat Goepel: Just keep following our progress 'cause we're pretty confident in our growth. Thank you.

Speaker #11: Thank you.

Operator 2: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Q1 2026 Asure Software Inc Earnings Call

Request DemoDemo

Asure Software

Earnings