Asure Software (ASUR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $28 million, down 8% year-over-year due to a $6.5 million reduction in ERTC revenue, while recurring revenue grew 18% to $27.1 million, now representing 96% of total revenue.

• Organic growth accelerated to 7% in Q2 from 3.5% in Q1, with expectations for double-digit growth in the second half of 2024.

• Nine acquisitions in the past 10 months contributed approximately $15 million in annual recurring revenue, with two acquisitions completed in Q2 2024.

• Major payroll tax management deal with Vensure and new partnerships with MyHR Screens and HR Logics expanded offerings for SMBs.

• Enhanced product suite with new background screening and applicant tracking technologies.

Financial highlights

• Q2 2024 revenue: $28 million; recurring revenue: $27.1 million (96% of total); revenue excluding ERTC: $27.5 million, up 18% year-over-year.

• Net loss for Q2 2024 was $4.4 million, compared to $3.8 million in Q2 2023.

• Gross margin declined to 67% from 72% year-over-year; non-GAAP gross margin was 73% versus 77%.

• Adjusted EBITDA for Q2 2024 was $4.1 million (14.5% margin), down from $6.1 million (20% margin) last year.

• Cash and cash equivalents at quarter-end were $20.7 million, with $6 million in debt.

Outlook and guidance

• Full-year 2024 revenue guidance updated to $123 million–$129 million, with adjusted EBITDA margin expected between 20% and 21%.

• Q3 2024 revenue guidance is $30 million–$33 million, with adjusted EBITDA of $6 million–$7 million.

• Guidance reflects variability in timing of large enterprise deals and acquisitions, and assumes two interest rate cuts in the second half of 2024.

• Management expects continued high demand and growth, supported by new partnerships, acquisitions, and technology investments.