Asure Software — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenue was $40.0 million, a 10% increase from $36.3 million in the prior year period.
• Recurring revenue for the quarter was $36.9 million, up 16% year-over-year from $31.8 million.
• Net loss for the quarter was $0.6 million, compared to a net loss of $5.4 million in the prior year.
• EBITDA for the quarter was $7.9 million, compared to $3.9 million in the prior year.
• Adjusted EBITDA for the quarter was $10.5 million, compared to $8.1 million in the prior year.
• Gross profit was $27.8 million, compared to $23.5 million in the prior year.
• Non-GAAP gross profit was $30.2 million with a 75% margin, compared to $25.4 million with a 70% margin in the prior year.
• For the first nine months of 2026, revenue was $119.9 million, up 18% from the prior year period.
• First nine months recurring revenue was $108.6 million, up 16% year-over-year.
• Net loss for the first nine months was $4.4 million, compared to $13.9 million in the prior year.
• EBITDA for the first nine months was $21.9 million, compared to $9.5 million in the prior year.
• Adjusted EBITDA for the first nine months was $30.6 million, compared to $20.7 million in the prior year.
• Non-GAAP gross profit for the first nine months was $89.6 million with a 75% margin, compared to $73.5 million with a 73% margin in the prior year.
• Deferred revenue decreased to $5.864 million (current) and $1.228 million (long-term) at September 30, 2026, from $11.622 million (current) and $1.909 million (long-term) at December 31, 2025.
• Total debt (notes payable) was $64.659 million ($5.301 million current + $59.358 million long-term) at September 30, 2026, compared to $67.626 million ($4.344 million current + $63.282 million long-term) at December 31, 2025.

Guidance and Future Outlook:

• Q4 2026 revenue guidance is $42.0 million to $44.0 million.
• Full year 2026 revenue guidance is $162.0 million to $164.0 million.
• Full year 2026 adjusted EBITDA guidance is $40.0 million to $42.0 million.
• Full year 2027 revenue guidance is $183.0 million to $187.0 million.
• Full year 2027 adjusted EBITDA margin guidance is 26% to 28%.
• Guidance incorporates the acquisition completed in October 2026.
• Management expects to finish 2026 on a high note and views the 2027 outlook as bright.

Business Segments and Product Lines:

• Payroll Tax Management is now available on the Oracle Marketplace for Oracle sales teams, systems integrators, and customers.
• Asure entered a relationship with Amazon Web Services (AWS) to offer solutions through AWS Marketplace, targeting over 330,000 active AWS Marketplace customers.
• Launched AsureCentral®, a unified platform, to the reseller network with the first resellers going live in September.
• The reseller network reaches approximately three times as many employers as the direct client business.
• Completed the acquisition of a payroll processing business in the southeastern United States in October 2026 for $26.5 million, serving mid-market organizations with cloud-based HR, payroll, and talent tools.
• The acquired technology will be used to update existing product offerings.

Market and Competitive Landscape:

• Asure positions itself as a leading provider of cloud-based Human Capital Management software solutions.
• The company utilizes AI technology in its HR compliance services to enhance scalability and efficiency.
• The new distribution channels (Oracle and AWS) are expected to broaden the solutions delivered and deepen client relationships.

Risks and Challenges:

• Management notes that projections are based on current beliefs and assumptions, with known and unknown risks and uncertainties associated with these projections.
• Risks include security breaches, financial result fluctuations, financing needs, market volatility, acquisition impacts, regulatory changes, software functionality issues, service interruptions, and competitive market pressures.
• Specific risks include the inability to adopt new money service business statuses, adverse effects from AI advancements, and potential litigation or regulatory claims.

Management Commentary and Tone:

• Chairman and CEO Pat Goepel described the quarter as delivering "solid growth" with a notable uplift in gross margins and improved profitability.
• Organic growth for the quarter saw total revenue up 9% and recurring revenue up 14%.
• Management remains focused on driving attach rates across the client base and sees significant potential for AsureWorks™ adoption.
• Management views the recent acquisition and new credit agreement as important steps for inorganic and organic growth strategies.
• The tone is confident, with management expressing excitement about new distribution channels and a bright outlook for 2027.

Other Key Points:

• Entered a new credit agreement with a syndicate led by MUFG Bank, Ltd., providing borrowings of up to $115.0 million.
• Received $85.0 million in gross proceeds from the new credit agreement on October 15, 2026.
• Used $62.6 million of the proceeds to repay in full the existing credit agreement with MidCap Financial Trust.
• Conference call scheduled for October 29, 2026, at 3:30 pm Central time with Chairman/CEO Pat Goepel and CFO John Pence.
• Asure Software, Inc. trades on Nasdaq under the ticker symbol ASUR.