Asure Software Q4 Earnings Call Highlights

Key Points

• Strong 2025 financials and upbeat 2026 guide: Full‑year revenue was $140.5 million (+17%) with Q4 revenue $39.3 million (+28%) and adjusted EBITDA and margins widening (Q4 adj. EBITDA +82% to $11.4M, FY adj. EBITDA $32.0M, margin 23%); management guides 2026 revenue of $159–162M with 23–25% adj. EBITDA margin and expects double‑digit growth and GAAP profitability.
• Product and AI momentum: More than two‑thirds of clients have moved to the new Asure Central portal, cross‑sell improved (multi‑product payroll clients +10% in Q4), and the AI agent Luna (50+ actions) generated 80,000+ messages in 90 days, reducing support load and underpinning a new AsureWorks ASO service (not a PEO) that can deliver 2x–3x revenue per managed client.
• Demand and commercial scale plans: New bookings rose 35% and contracted backlog is about $100 million (up 18% since Q3) with ~41% expected to convert in 12 months, and management plans to grow the sales team from ~118 to a target of 150 reps while aiming for a medium‑term revenue goal of $180–200M.

Asure Software NASDAQ: ASUR executives told investors the company exited fiscal 2025 with accelerating organic growth, expanding profitability metrics, and early signs that its revamped client portal and artificial intelligence initiatives are improving cross-sell performance and operating efficiency.

Revenue growth and improving organic trends

Chairman and CEO Pat Goepel said full-year 2025 revenue rose 17% year over year to $140.5 million, with growth described as “broad-based” across payroll, benefits, recruiting, time and attendance, and payroll tax management. He added that fourth-quarter organic growth improved to 10%, up sequentially from 4% in the third quarter, while full-year organic growth was 5%.

CFO John Pence reported fourth-quarter total revenue of $39.3 million, up 28% from the prior-year period. Recurring revenue in the quarter increased 18% to $33.7 million. For the full year, recurring revenue grew 11% to $127.3 million.

Pence also discussed interest-rate dynamics affecting results, noting total revenue was “down slightly versus prior year due to previous rate reductions made to the federal funds rate,” partially offset by higher client funds. For 2026, the company modeled two more rate cuts and said growth in client fund balances could help offset some of that impact.

Asure Central adoption and attach-rate focus

Goepel said the company believes it is at “an inflection point” following the October launch of Asure Central, a new client portal. He said more than two-thirds of clients have upgraded to the portal, which he described as a redesigned experience intended to improve workflow and enable more event-driven marketing.

Cross-selling progress was a major theme on the call. Goepel said attach rates across more than 100,000 clients improved in 2025, and that the number of payroll clients buying multiple products grew 10% in the fourth quarter compared with the prior year.

In response to analyst questions about targets for multi-product penetration, management said it did not provide a specific external target yet. Goepel said the company has internal goals to move “from, let’s say, two products to four products with every sale,” but noted there are still “moving parts” as the company integrates acquisitions and completes the portal rollout.

AI strategy: “Luna” and internal efficiency gains

Management repeatedly framed AI as an accelerator rather than a disruption risk for the company. Goepel said Asure’s revenue model is not seat-based and is instead driven by employee counts, payroll runs, benefit and retirement plan uptake, and recurring services. He also argued the company’s client base—primarily “blue, gray, and white-collar main street businesses”—is more resilient to automation, and that payroll and tax filing functions remain “uniquely protected” due to regulatory complexity and the need for accuracy.

Goepel said the company built a “secure model, agnostic AI layer” into its payroll and tax system of record during 2024, and in early 2025 launched Luna, which he characterized as an AI agent designed to detect and resolve issues and log outcomes. He said Luna can perform over 50 actions that are “live, auditable, and permission controlled.”

Management provided a specific early utilization metric: in the first 90 days after Asure Central’s general availability, Luna conversations generated 80,000+ messages and avoided “thousands” of support center interactions, which Goepel said offset the workload of about three client service representatives.

Executives also described internal uses of AI, including AI-assisted engineering and quality assurance for faster release cycles, an SDR agent that compiles buyer insights in minutes rather than an hour, lead generation tools that scan job postings, and agents used for sentiment analysis on client calls and support-ticket analysis. Management emphasized it views AI-driven cost savings as early-stage, with further opportunity ahead.

New AsureWorks offering and backlog visibility

Goepel introduced AsureWorks, an administrative services outsourcing (ASO) model that the company is launching internally in limited scope. He said AsureWorks is designed to move beyond software by taking responsibility for executing administrative processes on behalf of clients, supported by Luna and the Asure Central platform. Goepel emphasized it is not a PEO model and does not involve co-employment risk.

He said clients adopting managed payroll and compliance services can represent 2x to 3x the revenue of a payroll-only client, with potential for additional revenue as more models are managed. The company said it plans to scale AsureWorks “thoughtfully” as it builds capacity in sales, implementation, and support.

On demand and visibility, Goepel said 2025 sales efforts produced a 35% increase in new bookings, and the company ended the period with a contracted backlog of approximately $100 million, up 18% since the third quarter of 2025. Management said it expects to convert about 41% of backlog over the next 12 months and cited retention rates as supporting confidence in 2026 guidance.

Profitability, balance sheet, and 2026 outlook

Pence reported fourth-quarter net income of $0.8 million, compared with a net loss of $3.2 million in the prior-year quarter. Full-year net loss was $13.1 million, compared with $11.8 million the prior year. EBITDA improved to $8.7 million in the fourth quarter from $3.4 million a year earlier, and to $18.2 million for the full year from $11.4 million.

On an adjusted basis, fourth-quarter adjusted EBITDA rose 82% to $11.4 million, and the adjusted EBITDA margin expanded to 29% from 20% a year earlier. Full-year adjusted EBITDA increased 42% to $32.0 million, and adjusted EBITDA margin rose to 23% from 19%.

Gross margin for the full year was 68% (down from 69%), with management attributing the slight decline to mix from increased lower-margin non-recurring sales tied to the Lathem acquisition. Pence said the company expects margins to improve over time as it integrates Lathem and transitions hardware into a hardware-as-a-service model.

As of Dec. 31, 2025, Asure ended the year with $25.2 million in cash and cash equivalents and $67.6 million in debt.

For guidance, management projected first-quarter 2026 revenue of $41 million to $43 million and adjusted EBITDA of $10 million to $11 million. For full-year 2026, the company guided to revenue of $159 million to $162 million with adjusted EBITDA margins of 23% to 25%. In the Q&A, management said the low end of the 2026 revenue range was raised by $1 million, citing a recently closed acquisition as a source of incremental upside.

Goepel said the company plans increased investment in sales and marketing in 2026, with a target of reaching 150 sales reps (management said it is currently around 118). He also reiterated a medium-term revenue goal of $180 million to $200 million and said the company expects 2026 to be an inflection year with double-digit growth and GAAP profitability.

About Asure Software NASDAQ: ASUR

Asure Software, Inc NASDAQ: ASUR is a Texas‐based technology company specializing in cloud‐based workforce and workspace management solutions. The company develops software that streamlines human capital management (HCM), payroll processing, time and attendance tracking, and workspace reservation for businesses seeking to optimize employee experience and operational efficiency.

The Asure platform includes modules for payroll administration, benefits enrollment, performance management, applicant tracking and onboarding, as well as mobile and web‐based timekeeping.

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