ASUR — Asure Software, Inc.

Summary of Asure Software's Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenues: $42.8 million, up 23% year-over-year from $34.9 million in Q1 2025.
• Recurring Revenue: $37.8 million, a 14% increase from $33.2 million in Q1 2025, representing approximately 88% of total revenue.
• Gross Profit: $30.5 million, with a GAAP gross margin of 71% and a non-GAAP gross margin of 76%.
• Net Income: $0.6 million, compared to a net loss of $2.4 million in Q1 2025.
• Adjusted EBITDA: $12.3 million, a 69% increase year-over-year, with an adjusted EBITDA margin of 29%.
• Contracted Backlog: Approximately $85.6 million, with an expected conversion of about 38% over the next 12 months.

2. Strategic Updates and Business Highlights

• Asure Central Adoption: Rapid adoption of the unified platform, expected to encompass the majority of the 30,000 direct clients by Q2 2026.
• AsureWorks Launch: Introduction of an administrative services outsourcing model aimed at small businesses, with positive early reception and a growing sales pipeline.
• AI Integration: Continued development of Luna, the AI agent, which has seen a 50% increase in interactions and is expected to enhance operational efficiency and customer service.
• Sales Force Expansion: On track to reach 150 sales reps by year-end, focusing on consultative selling to drive cross-selling opportunities.

3. Forward Guidance and Outlook

• Full Year 2026 Guidance: Revenue expected between $159 million and $163 million, with an adjusted EBITDA margin of 23% to 25%.
• Q2 2026 Guidance: Revenue projected at $36 million to $38 million, with adjusted EBITDA of $6 million to $8 million.
• Long-term Goals: Targeting $180 million to $200 million in revenues with adjusted EBITDA margins of 30% or better by mid-term.

4. Bad News, Challenges, or Points of Concern

• Global Uncertainty: The company is taking a conservative approach to operations due to ongoing global uncertainties, which could impact growth.
• Seasonal Revenue Fluctuations: Q1 typically benefits from seasonal factors like year-end W2/ACA revenue, which may not be sustainable in subsequent quarters.
• Competitive Pressures: While the company remains optimistic about its market position, it acknowledged the competitive landscape, particularly in tax and compliance services.

5. Notable Q&A Insights

• Adoption Paths: CEO Pat Goepel noted that clients are increasingly engaging with the Asure Central platform, leading to improved attach rates and cross-selling opportunities.
• Forms Growth Impact: The organic growth rate of 7% in Q1 was not hindered by forms growth, which had previously been a headwind.
• Lathem Integration: The transition of Lathem customers to Asure Central is progressing well, with expectations for increased cross-selling once fully integrated.
• AI Efficiency Tools: AI is being deployed across various departments to enhance productivity and customer interactions, potentially reducing costs while maintaining service quality.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and notable insights from the Q1 2026 earnings call for Asure Software, presenting a balanced view of the company's performance and outlook.