Moving Past ERTC: Asure (NASDAQ: ASUR) Reports Meaningful Growth in Q4 and FY 2023

The growth engine continues to fire on all cylinders at Asure Software (NASDAQ: ASUR). Despite the IRS’s pause of the employee retention tax credit (ERTC) program in September 2023, Asure reported total revenue of approximately $100 million during the full year 2023 when excluding ERTC figures. For the full year 2024 ahead, management estimates total revenues expanding between 25% to 29% to reach a range of $125 million to $129 million. To put the core business growth into perspective, the company’s main businesses grew 19% y/y in 2023. With an average estimated growth of 26% for the full year 2024, the driver is ARR.

Since its halt in September 2023, ERTC seems to have stolen the spotlight, but the core growth of Asure is clearly in the hands of its key HCM services and offerings. No doubt Asure saw benefits from the ERTC program when it was active, but management was smart to seize the opportunity to generate additional revenue to help pay down costly debt and build a war chest for acquisition opportunities for the year ahead.

Let’s break down Asure’s Q4 and FY 2023 results a little further.

Asure’s Financial Results

Q4 2023 Results

On February 26, 2024, Asure reported fourth quarter and full-year 2023 financial results. For Q4, the HCM services provider reported revenue of $26.3 million, which represented growth of 15% y/y (without ERTC). Recurring revenue came in at $25 million, which was also up 15% y/y without ERTC.

On the bottom line, Asure did report EBITDA of $1.1 million, compared to $5 million during Q4 2022. Adjusted EBITDA came in at $2.8 million compared to $6 million during last year’s period. On a positive note, non-GAAP gross margins held up at 72% versus 76% during the same period last year. This shows that without ERTC’s high-margin revenue, Asure’s core businesses are still able to produce meaningful gross margins of their own.

Asure management’s previously-issued guidance for the quarter was a revenue range between $25 million and $27 million. Adjusted EBITDA was forecasted to come between $2 million and $3 million. Revenue and adjusted EBITDA for the quarter were in line with management’s previously-issued guidance.

FY 2023 Results

For the full year 2023, Asure reported revenue of $119.1 million, which represented a y/y growth of 19% without ERTC. Recurring revenue was at $99.7 million, which was also a y/y growth of 19% excluding ERTC.

The company reported an overall net loss of $9.2 million, which was a meaningful improvement from last year’s $14.5 million loss. EBITDA came in at $14.3 million, which was up 63% y/y, and adjusted EBITDA was reported at $23.3 million or up 97% y/y. Non-GAAP gross profits rose to $90.3 million compared to $67.3 million in 2022.

Q4 & FY 2023 Takeaways

The recent financial results once again prove that Asure’s core businesses continue to see meaningful growth. For the fourth quarter of 2023, recurring revenue (core businesses) saw 15% y/y growth and accounted for over ~95% of total revenue during the quarter. On the full-year 2023 basis, recurring revenue jumped 19% y/y and accounted for over ~83% of total revenue.

On a forward-looking basis, management’s issued Q1 2024 and full-year 2024 top and bottom-line guidance once again call for another year of strong growth. The management team sees Q1 2024 revenue coming in between $30 million and $32 million with an adjusted EBITDA range between $6 million and $7 million. For the full year 2024, Asure estimates total revenue in a range of $125 million to $129 million and an adjusted EBITDA margin between 20% and 21%.

This proves once more that it is time to move on from ERTC and focus on Asure’s core businesses. These forecasted outlooks are operating under the assumption that ERTC will continue to be paused for the foreseeable future and thus are not a part of management’s guidance.

In our article published 1/11/2024 entitled “Asure’s (NASDAQ: ASUR) Core Business Delivers Meaningful Growth Without ERTC,” we break down how the company’s core businesses have continued to provide an overwhelming proportion of Asure’s top and bottom-line growth, even during ERTC. Between Q4 2022 and Q3 2023, Asure’s core businesses accounted for at least 75% and as high as 84% of its total revenue. The HCM provider continued to prove these points with the results of the Q4 and FY 2023 financials.

Wall Street Remains Bullish on Asure

As of the end of February 2023, Asure holds an overall “strong-buy” rating among seven Wall Street analysts. Six analysts rate the stock a “buy” with one maintaining a “hold” position. Overall, the average 12-month stock price forecast among the analysts estimates ASUR trading at $14.33, which implies a potential additional upside of just under 50% from its current price. The highest price forecast is set at $20 per share, while the lowest analyst reading estimates shares at $8.00.


In conclusion, Asure Software’s financial performance throughout 2023 and the outlook for 2024 emphatically underscore the company’s resilient growth trajectory, largely independent of the ERTC program’s impact. Despite the IRS’s pause on the ERTC, Asure’s core businesses—encompassing a broad spectrum of Human Capital Management (HCM) services—have not only sustained but also significantly contributed to its revenue and profitability. The full-year 2023 results highlight a robust 19% year-over-year growth in recurring revenue and a substantial improvement in EBITDA and adjusted EBITDA figures, showcasing the underlying strength of Asure’s business model.

The company’s forward-looking guidance, projecting continued revenue growth and an improved adjusted EBITDA margin, further cements its position as a strong contender in the HCM market space. With Wall Street maintaining a “strong-buy” rating and anticipating considerable upside potential in Asure’s stock price, it is evident that the investor community recognizes the company’s value beyond the temporary ERTC benefits. As Asure continues to navigate forward, its focus on core business offerings and strategic growth initiatives promises to deliver meaningful value to its shareholders.


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