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Asure (NASDAQ:ASUR) Reports Q4 In Line With Expectations, Growth To Accelerate Next Year

By: StockStory

March 06, 2025 at 16:10 PM EST

ASUR Cover Image

Online payroll and human resource software provider Asure (NASDAQ: ASUR) met Wall Street’s revenue expectations in Q4 CY2024, with sales up 17.2% year on year to $30.79 million. On the other hand, next quarter’s revenue guidance of $34 million was less impressive, coming in 4.7% below analysts’ estimates. Its GAAP loss of $0.12 per share was significantly below analysts’ consensus estimates.

Is now the time to buy Asure? Find out by accessing our full research report, it’s free.

Asure (ASUR) Q4 CY2024 Highlights:

Revenue: $30.79 million vs analyst estimates of $30.9 million (17.2% year-on-year growth, in line)
EPS (GAAP): -$0.12 vs analyst estimates of -$0.05 (significant miss)
Adjusted EBITDA: $6.23 million vs analyst estimates of $6.30 million (20.2% margin, 1.1% miss)
Management’s revenue guidance for the upcoming financial year 2025 is $136 million at the midpoint, beating analyst estimates by 1% and implying 13.5% growth (vs 1.3% in FY2024)
EBITDA guidance for Q1 CY2025 is $6.5 million at the midpoint, below analyst estimates of $8.49 million
Operating Margin: -8.1%, up from -14.3% in the same quarter last year
Free Cash Flow was $17.31 million, up from -$1.48 million in the previous quarter
Billings: $37.34 million at quarter end, up 28.4% year on year
Market Capitalization: $263.9 million

“We are pleased to report strong results for 2024, demonstrating the continued momentum of our business. Excluding the one-time impact of ERTC revenue, our fourth-quarter revenue grew 22% year-over-year, reaching $30.8 million—an impressive finish to the year. For the full year, total revenue increased modestly to $119.8 million, but when adjusted to exclude ERTC, our revenue growth was 17% year-over-year, underscoring the strength of our core business. Recurring revenue, the backbone of our model, grew 15% year-over-year and now represents 96% of total revenue, up from 84% in 2023. Additionally, our contracted revenue backlog continued to expand, providing further visibility into future growth,” said Asure Chairman and CEO Pat Goepel.

Company Overview

Created from the merger of two small workforce management companies in 2007, Asure (NASDAQ: ASUR) provides cloud based payroll and HR software for small and medium-sized businesses (SMBs).

HR Software

Modern HR software has two powerful benefits: cost savings and ease of use. For cost savings, businesses large and small much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis rather than the hassle and complexity of purchasing and managing on-premise enterprise software. On the usability side, the consumerization of business software creates seamless experiences whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.

Sales Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Asure grew its sales at a 16.3% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.

This quarter, Asure’s year-on-year revenue growth was 17.2%, and its $30.79 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 7.4% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 12.3% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is above the sector average and implies the market sees some success for its newer products and services.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.

Billings

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Asure’s billings came in at $37.34 million in Q4, and over the last four quarters, its growth was underwhelming as it averaged 7% year-on-year increases. However, this alternate topline metric grew faster than total sales, meaning the company collects cash upfront and then recognizes the revenue over the length of its contracts - a boost for its liquidity and future revenue prospects. Asure Billings

Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

Asure is extremely efficient at acquiring new customers, and its CAC payback period checked in at 9.9 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.

Key Takeaways from Asure’s Q4 Results

We were impressed by how significantly Asure blew past analysts’ billings expectations this quarter. We were also glad next year’s revenue guidance was robust. On the other hand, its revenue guidance for next quarter missed significantly and its EBITDA guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $9.60 immediately after reporting.

The latest quarter from Asure’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

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