Asure Software Inc (ASUR) reports significant revenue growth in Q3 2023

  • Asure Software Inc (NASDAQ:ASUR) announces a 34% increase in Q3 revenue reaching $29.3 million.

  • Gross profit is up 56% compared to the prior year, with non-GAAP gross margin hitting 76%.

  • Net loss improves by $2.3 million, while EBITDA and Adjusted EBITDA see significant gains.

  • ASUR provides Q4 2023 and preliminary FY 2024 guidance that signals continued growth.

On November 13, 2023, Asure Software Inc (NASDAQ:ASUR), a leader in cloud-based Human Capital Management (HCM) solutions, released its 8-K filing detailing robust financial performance for the third quarter ended 30 .September 2023 The company reported a significant 34% increase in revenue year-over-year, totaling $29.3 million, with recurring revenue also up 19%. This growth is attributed to both organic expansion and efficient operations.

Financial performance highlights

ASUR’s third quarter results showed a marked improvement in its financial health. The net loss was reduced by $2.2 million, a significant improvement over the previous year’s figure. EBITDA increased to $3.0 million, an increase of $1.7 million, while Adjusted EBITDA saw a more pronounced increase of $4.4 million, reaching $6.2 million. Gross profit also saw a significant increase, jumping 56% to $21.3 million, with a non-GAAP gross margin of 76% compared to 68% in the prior quarter.

Strategic business development

ASUR has actively strengthened its business through various strategic initiatives. The Company completed a stock offering, which resulted in net proceeds of approximately $43 million. It also announced the payoff of debt with Structural Capital Investments III, LP, which is expected to improve cash flow and earnings. New product launches, such as a tax-deductible unified 401k offering and the introduction of Lendio on the Asure Marketplace, are designed to support small businesses and expand ASUR’s customer base.

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Management’s outlook and guidance

Pat Goepel, chairman and CEO of ASUR, expressed optimism about the company’s trajectory, citing “another strong performance” and anticipating high-margin revenue streams in the future. The company has issued guidance for Q4 2023 expecting revenue between $25M-$27M and has introduced preliminary guidance for 2024, with revenue expected to be in the range of $125M-$129M and adjusted EBITDA margins between 20% and 21%.

Summary of annual accounts

The balance sheet reflects a healthy liquidity position with cash and cash equivalents of USD 32.8 million per September 30, 2023. ASUR’s efforts to streamline operations are evident in the reduction of total current liabilities from $235.2 million to $192.8 million over the nine months. period. The company’s share offering has also strengthened its financial position, with total equity increasing from $145.1 million to $191.7 million.

Non-GAAP and Adjusted Financial Measures

ASUR’s use of non-GAAP and adjusted financial measures provides additional insight into the company’s operational performance. These measures exclude items such as stock-based compensation, amortization and non-recurring expenses, providing a clearer view of the company’s ongoing financial health. A detailed reconciliation of these non-GAAP measures to their GAAP counterparts is provided in the filing.

In conclusion, Asure Software Inc (NASDAQ:ASUR) has demonstrated strong financial growth in the third quarter of 2023 with significant increases in revenue and gross profit. The company’s strategic initiatives and product launches are expected to continue to drive growth, which is reflected in the positive guidance for the coming quarters. Investors and stakeholders can look forward to ASUR’s sustained momentum and strategic execution in the HCM market.

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Explore the complete 8-K earnings release (here) from Asure Software Inc for additional details.

This article first appeared on GuruFocus.

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