Asure Software’s Q2 2023 Financial Performance Surpasses Expectations As HCM Shines
Asure Software (NASDAQ: ASUR), a top-tier provider of cloud-based Human Capital Management (HCM) software solutions, reported a remarkably successful second quarter for the year 2023. The company has shown exceptional growth and has made impressive strides in its HCM offerings, leading to increased revenue and improved financial targets for 2023. The second quarter report indicated a 50% increase in revenues, amounting to $30.4 million compared to the prior-year second quarter.
Q2 2023 Financial Highlights
The recurring revenue for Q2 2023 stood at $23 million, showing an impressive 21% increase from the prior-year second quarter. Furthermore, the company reported a net loss of $3.8 million, a significant $2.1 million improvement from the same period last year. Other highlights include an EBITDA of $3.3 million, representing a $3.4 million improvement, and an adjusted EBITDA of $6.1 million, a staggering $5.5 million improvement.
The company’s gross profit for Q2 2023 was $22 million, an 80% increase from Q2 2022, while its non-GAAP gross profit was $23.4 million (reflecting a 77% margin), a substantial improvement from the $13.4 million (66% margin) reported in the prior-year second quarter.
“We delivered a historic performance for our Company in the second quarter with 50% organic growth in revenues and robust gains in operating margins, both of which are the primary result of technology enhancements and targeted sales efforts in our small business HCM and Enterprise Tax businesses,” said Asure Chairman and CEO Pat Goepel. “We are building on our strong momentum by advancing our technology through leading partnerships and integrating artificial intelligence to enhance our solutions. Technological evolution and regulatory change present tremendous opportunities for small businesses to grow and improve their operations, and Asure is committed to capturing these benefits for them.”
First Half 2023 Financial Highlights
The first half of 2023 showed a promising start with revenue amounting to $63.5 million, a 42% increase from the first half of 2022. The recurring revenue rose by 21% to $50.9 million, and the net loss was reduced by $5.5 million to $3.4 million.
The company also saw an increase in its EBITDA to $10.2 million, a $7.7 million increase, and an adjusted EBITDA of $14.3 million, a $10.3 million increase. The gross profit and non-GAAP gross profit rose to $46.4 million (67%) and $49.1 million (77%) respectively, both seeing considerable improvements from the first half of 2022.
Management Increases 2023 Guidance & Outlook
Based on the robust performance in the first half of 2023 and the current business trends, Asure Software has revised its 2023 guidance. The company is now projecting revenues between $118.0 million and $120.0 million for the full year 2023 and an adjusted EBITDA range of 19% to 20%. For the third quarter of 2023, the revenue is projected to be between $26.0 million and $27.0 million, and the adjusted EBITDA is expected to be between $3.5 million and $4.5 million.
Despite the prevailing economic uncertainty due to recent inflationary trends and the potential of a recession of unknown severity, Asure remains confident in its performance for the remainder of 2023.
Asure Software and Vestwell Forge Strategic 401k Partnership
In addition to its financial progress, Asure Software has announced a strategic partnership with Vestwell, a pioneer in digital recordkeeping for 401(k) plans. The collaboration will yield a new product – the Asure 401(k) plan. The plan aims to assist small and medium-sized businesses (SMBs) in managing their employees’ retirement savings efficiently and cost-effectively, further fortifying Asure’s commitment to providing comprehensive HCM solutions. Furthermore, Asure’s new 401(k) product provides SMBs with yet another tool to increase their competitiveness with larger firms to obtain top-tier labor talent.
Asure’s CEO, Pat Goepel, expressed enthusiasm about the partnership, “Our alliance with Vestwell perfectly aligns with our dedication to delivering solutions that work as hard as our clients. The Asure 401(k) plan will not only enable our clients to secure their future but also assist in attracting and retaining the best talent, a critical factor for growth.”
The Asure 401(k) plan will also help businesses navigate state-mandated retirement plans and utilize the tax credit opportunities provided by the Secure Act 2.0. Vestwell’s CEO, Aaron Schumm, reiterated this sentiment, adding, “Together, we’re proud to provide their clients with access to a best-in-class retirement workplace savings program.”
In conclusion, Asure Software has reported a strong Q2 2023, showing significant improvement in key financial indicators. The strategic partnership with Vestwell indicates Asure’s commitment to advancing in the HCM marketplace, providing its clients with cutting-edge solutions to secure their future and maintain their competitive edge. The updated guidance for 2023 suggests continued growth for Asure, solidifying its place as a leader in the HCM software solutions market.
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