Asure Software, Inc. (NASDAQ:ASUR) Q4 2025 Earnings Call Transcript

Asure Software, Inc. (NASDAQ:ASUR) Q4 2025 Earnings Call Transcript February 26, 2026

Asure Software, Inc. beats earnings expectations. Reported EPS is $0.32, expectations were $0.23.

Operator: Good afternoon. And welcome to Asure Software, Inc.’s fourth quarter and full year 2025 earnings conference call. Joining us for today’s call are Chairman and CEO, Patrick Goepel; Chief Financial Officer, John Pence; and VP of Investor Relations, Patrick McKillop. Following their prepared remarks, there will be a question and answer session for the analysts and investors. I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.

Patrick McKillop: Thank you, operator. Good afternoon, everyone, and thank you for joining us for Asure Software, Inc.’s fourth quarter and full year 2025 earnings results call. Following the close of the markets, we released our financial results. The earnings release is available on the SEC’s website and our Investor Relations website at investors.asuresoftware.com. You can also find the investor presentation. During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors and exclude the impact of certain items. A description and timing of these items along with a reconciliation of non-GAAP measures to their most comparable GAAP measures can be found in our earnings release.

Today’s call will also contain forward-looking statements that refer to future events and as such involve some risks. We use words such as “expects,” “believes,” and “may” to indicate forward-looking statements. We encourage you to review our filings with the SEC for additional information on factors that could cause actual results to differ materially from our current expectations. I will hand the call over to Pat in a moment. I just wanted to take a moment to remind people of our upcoming Investor Relations activities. In March, we will attend the ROTH Conference in Dana Point, California on March 23–24. We are also planning for some non-deal road shows during March and April. On May 13, we are attending the 21st Annual Needham TMT Conference in New York.

And on May 14, the Houlihan Lokey One Conference also in New York. On May 28, we will attend the Craig-Hallum Conference in Minneapolis. Investor outreach is very important to Asure Software, Inc., and I would like to thank all of those that assist us in our efforts to connect with investors. Finally, I would like to remind everyone that this call is being recorded and will be made available for replay via a link available on the Investor Relations section of our website. With that, I would now like to turn the call over to Patrick Goepel, Chairman and CEO. Pat?

Patrick Goepel: Thank you, Patrick, and welcome everyone to Asure Software, Inc.’s fourth quarter and full year 2025 earnings results call. I am joined on this call by our CFO, John Pence, and we will provide a business update for our fourth quarter and full year 2025 results as well as our outlook for the remainder of 2026. Following our remarks, we will be available to answer your questions. We are excited to report that our full year revenues were very strong, coming in at $140.5 million, an increase of 17% versus the prior year. Contributors to our success in 2025 were broad-based with many product lines showing growth such as payroll, benefits, recruiting, time and attendance, as well as our payroll tax management businesses.

Organic growth in the fourth quarter was 10%, which improved sequentially from the 4%, and for the full year of 2025 it was 5%. We believe that we are at an inflection point in the business following the launch of Asure Central last October with more than two-thirds of our clients upgrading to the new portal. Asure Central offers clients a new experience with a brand new look and feel, improves their workflow, as well as enabling us to amplify items such as event-driven marketing efforts. Our cross selling or attach rates with more than 100,000 clients have improved throughout last year. The number of clients buying multiple products from us in our payroll business has grown by 10% in the fourth quarter over the prior year. We believe that the Asure Central portal will continue to help drive further improvements in attach rates and continued acceleration of organic growth.

Now let me take a moment to address one of the most important topics shaping today’s business landscape: AI. First off, we have new slides in our investor presentation which highlight our approach to AI and I encourage you to review them. Also, we are hosting an AI fireside chat with myself and our Chief Technology Officer, Yasmin Rodriguez, on March 11 at 3:30 p.m. Central Time, 4:30 p.m. Eastern Time, and we look forward to your participation in this exciting event where we will discuss Asure Software, Inc.’s current perspective on artificial intelligence. Much of the public conversation focuses on fears of large-scale labor disruptions, but our exposure to that risk is far lower than many might assume. It is worthwhile to mention that our revenue model is not a typical SaaS seat-based model and is instead a function of total employee count and payroll runs, benefit and retirement plan uptake, and reoccurring services.

Furthermore, our clients are primarily blue, gray, and white collar Main Street businesses—organizations rooted in essential work that is far more resilient to automation. At the same time, while AI is being deployed across many areas of the economy, we believe that highly sensitive functions like payroll and tax filing remain uniquely protected. These processes involve complex regulations, confidential data, and real-time compliance obligations—areas where the margin for error is effectively zero. Payroll is already one of the most mission-critical and heavily regulated responsibilities inside any business. When you are navigating local tax rules, shifting labor laws, and ongoing compliance requirements, accuracy and accountability are not optional, especially when you are moving approximately $20 billion annually like Asure Software, Inc.

does. That is why we see AI not as a replacement for oversight but as a powerful tool to enhance precision, efficiency, and decision-making. We have adopted AI assertively but thoughtfully in ways that strengthen our platforms, while humans remain in the lead to ensure trust and compliance. During 2024, we built a secure model-agnostic AI layer directly into our payroll and tax system of record. In early 2025, we launched Luna, the industry’s first true AI agent for payroll and HR. Unlike traditional generative chatbots, Luna understands Asure Software, Inc.’s full product suite and can act, not just provide suggestions. Luna detects issues, resolves them, logs outcomes, and supports both employees through self-service and business owners and administrators across their workflows.

Today, our Luna AI can perform over 50 actions which are live, auditable, and permission-controlled. In the first 90 days of Asure Central’s general availability, conversations with Luna resulted in 80,000+ messages and avoided thousands of support center interactions, which offset the workload of about three client service reps and clearly showed how AI is driving our operational efficiency. Internally, we have been using AI to help increase product development, drive revenue productivity, and further operational efficiencies. In terms of product, we can build faster with AI-assisted engineering and quality assurance resulting in faster release cycles. Within revenue productivity, our SDR agent collects and enriches buyer insights in three minutes versus a typical one-hour discovery, and our list-building agent crawls job boards for new HR postings, creating 1,000+ leads.

Operationally, our agent helps with sentiment analysis during phone calls with clients and analyzes support tickets to prioritize product and process improvement. We are continuing to invest in tomorrow’s AI capabilities for both our client product experience and our internal processes to enable our entire organization to work more efficiently. Now, moving from AI, recently at our sales kickoff in Austin, we introduced a new offering called AsureWorks, which we are launching internally in a limited scope. AsureWorks is our administrative services outsourcing or ASO model. Rather than simply providing payroll and HR software, we take responsibility for running key administrative processes on behalf of the client, supported by our Luna AI and our Asure Central platform.

We are seeing a clear shift in the market. Small and mid-sized businesses face increasing regulatory complexity and leaner staffing models and may no longer have the bandwidth to manage payroll and HR compliance internally. With AsureWorks, clients can rely on Asure Software, Inc.’s expertise and systems to execute that work, helping reduce compliance risk and allowing them to focus on their core business. Strategically, this expands our share of wallet and deepens client relationships. Clients who adopt managed payroll and compliance services typically represent two to three times the revenue of a payroll-only client with further upside as additional modules are managed. This is not a PEO model, and we are not taking on co-employment risk.

For businesses that feel constrained by the cost or the rigidity of a traditional PEO, AsureWorks offers a flexible alternative with operational support and greater control. We will scale AsureWorks thoughtfully as we build sales, implementation, and support capacity based on our early results. Our sales efforts for 2025 resulted in a 35% increase in new bookings. Additionally, we continue to have a very healthy contracted backlog of approximately $100 million which continues to grow and was up 18% since our 2025. We expect to convert approximately 41% of this backlog in the next 12 months. And this, combined with our historic retention rates, gives us a lot of confidence in our 2026 guidance. Now I would like to hand it off to John to discuss our financial results in more detail as well as our guidance.

John?

John Pence: Thanks, Pat. As Patrick mentioned at the beginning of this call, several of the financial figures discussed today are given on a non-GAAP or adjusted basis. You will find a description of these GAAP to non-GAAP reconciliations in the earnings release that was made available earlier today. The reconciliations themselves are also included in our most recent investor presentation posted in the Investor Relations section of our website at investors.asuresoftware.com. Now on to the fourth quarter and 2025 results. Fourth quarter total revenues were $39.3 million, increasing by 28% compared to the prior-year period, while recurring revenue grew by 18% to $33.7 million. For the full year 2025, total revenue grew by 17% to $140.5 million, and recurring revenue grew by 11% to $127.3 million for the full year.

Our professional services and hardware revenue was $5.6 million for the fourth quarter compared to $2.3 million in the fourth quarter of last year. For the full year of 2025, our professional services and hardware revenue was $13.3 million compared to $5.3 million in the prior year. Our organic growth rate for the fourth quarter improved sequentially to 10% compared to 4% in the third quarter. Organic growth for the full year of 2025 was 5%. Float revenue was down slightly versus prior year due to previous rate reductions made to the federal funds rate, partially offset by an increase in client funds. Our outlook for interest rates: we have modeled two more rate cuts during 2026. We believe that as our client fund balances increase, this will help offset some of these rate cuts.

Gross profit for the fourth quarter was $27.2 million versus $21.0 million in the fourth quarter of the prior year. Gross margins for the full year were 68% compared to 69% in the prior year. Non-GAAP gross margins for the fourth quarter were 75% compared to 73% in the prior year. Non-GAAP gross margins for the full year were 73%, versus 74% in the prior year. Our overall gross margins for the year were down slightly due to the revenue mix. We experienced an increase in lower-margin non-recurring sales, primarily driven by the recent Latham acquisition. However, we are forecasting improvement in gross margins over time as we integrate the Latham acquisition and transition the Latham hardware sales into a hardware-as-a-service model over the coming years.

We believe further scale in our business will also help the margins in the future. Net income for the fourth quarter was $800,000 versus a net loss of $3.2 million during the prior year. Net loss for the full year was $13.1 million versus a net loss of $11.8 million in the prior year. EBITDA for the fourth quarter was $8.7 million, up from $3.4 million in the prior year. EBITDA for the full year was $18.2 million versus $11.4 million in the prior year. Adjusted EBITDA for the fourth quarter increased 82% to $11.4 million from $6.2 million in the prior year, and our adjusted EBITDA margin was 29%, an increase of 900 basis points compared to the 20% we realized in the prior year. Adjusted EBITDA for the full year increased 42% to $32.0 million versus $22.5 million in the prior year.

Adjusted EBITDA margin was 23%, up 400 basis points from 19% a year ago. Turning now to the balance sheet. We ended the year with cash and cash equivalents of $25.2 million, and we have debt of $67.6 million as of 12/31/2025. Now on to guidance. We have consistently emphasized on prior earnings calls that we are continuing to invest in our technology and product offerings to support sustained revenue growth and improved profitability. At the same time, we expect our cost structure, including our CapEx and capitalized R&D, to remain relatively stable on a dollar basis throughout the remainder of 2026. Our first quarter 2026 and full year 2026 guidance is based on our expectation of continued positive momentum in our business. Now, in terms of guidance for 2026, we are expecting the first quarter revenues to be in the range of $41 million to $43 million, and adjusted EBITDA for the first quarter is expected to be between $10 million and $11 million.

Today, we are also updating our 2026 revenue, which we believe will be between $159 million and $162 million, with adjusted EBITDA margins of between 23–25%. In conclusion, we are excited about 2026 and look forward to 2026 being a major inflection point for Asure Software, Inc.’s business, where we expect to deliver double-digit growth and GAAP profitability. With that, I will turn the call back to Pat for closing remarks.

Patrick Goepel: Thanks, John. We are pleased to have delivered strong results for the full year 2025. The integration of the point solutions we have acquired plus the investments we have made in AI and improving our technology are having an impact on our growth trajectory, and we expect that we will continue to deliver improved growth and profitability going forward. Our plan for 2026 includes increased investment in our sales and marketing efforts to continue to drive the improving growth we are experiencing. We have a target of reaching 150 sales reps in 2026 and believe that with our new technology such as Asure Central, we can experience improved productivity from the sales force. We believe our margins continue to expand through natural scaling benefits and the growth of higher-margin automated revenue streams such as benefits, 401(k).

These factors combined with the potential for AI to reduce the cost of support and onboarding plus our forecast of lower legacy technology spend will all support higher margins in the future. We are well on our way to our medium-term plan of $180 million to $200 million in revenues, where we believe we can achieve adjusted EBITDA margins of 30% plus, which we showed in an early preview of fourth quarter 2025. In summary, 2025 was a great year for Asure Software, Inc. with lots of accomplishments. We will continue to grow the business, roll out new technology, and seek out value-creating opportunities, all while expecting to deliver GAAP profitability on a more consistent basis in the future. We remain excited for the remainder of 2026, and we continue to work diligently on creating increased value for our shareholders and our stakeholders.

We will continue to provide innovative human capital management solutions that help businesses thrive, human capital management providers grow their base, and large enterprises streamline tax compliance. Thank you for listening to our prepared remarks. So with that, I will send the call back to the operator for the question and answer session.

Q&A Session

Operator: Thank you. And with that, we will now be conducting a question and answer session. You may press 2 to remove yourself from the queue. And our first question comes from the line of Eric Martinuzzi with Lake Street Capital. Please proceed with your question.

Eric Martinuzzi: Yes. Congrats on the terrific results for Q4 and on the 2026 outlook. I think I have got this right. You bumped up the low end of revenue in the 2026 guidance. Is that correct?

John Pence: Yeah. We took it up $1,000,000.

Eric Martinuzzi: Okay. And just curious to know, was anything in particular that caused that because the Q1 guide is relatively kind of where we and the rest of the street were, but just wondering the comps incremental comp from?

John Pence: We closed an acquisition a couple weeks ago, so we wanted to give a little bit more upside as a result of that.

Eric Martinuzzi: Gotcha. Okay. And then, for the attach rates, obviously, this is a key to the growth story. And that 10% organic number was really kind of eye opening. You talked about the an increase of about 10% in the number of customers that are buying multiple products. And I was just curious to know if you have—do you have a target you are shooting for in 2026 for that—I guess, however, you could comment on the multiproduct, the growth rate for the—yeah.

Patrick Goepel: Eric, thanks for the question. It is a big focus for us. We do not have a specific target. We just know that, you know, for example, the Asure Central was rolled out in October. You know, we have about 16,000 direct clients. You know, as you know, we acquired Latham in July. They go under the Asure umbrella here in the early second quarter or April time frame. And for us, you know, we have some internal goals of going from, let us say, two products to four products with every sale. Now how fast we get there and how long we will continue to measure ourselves and report. We think there is an opportunity to go up and to the right. But as far as, you know, kind of measuring each quarter, we have a lot of moving parts quite yet that we are not going to give specific numbers, but I assure you internally and externally, these are key metrics that we will report on.

And as we get in a rhythm right now where we have a number of different kind of moving parts, we will start to then declare, you know, more in advance specific targets. But we are probably not quite there yet. We do want to measure it and show you the progress along the way.

Patrick McKillop: Yeah. And I would say, Eric, if you get a chance—I know we just put it out there thirty minutes or so ago—but we have added a couple of slides to the deck too. So take a look at those if you get a chance. Let us talk about it.

Operator: Thank you. And our next question comes from the line of Richard Baldry with ROTH Capital Partners. Please proceed with your question.

Richard Kenneth Baldry: Thanks. So post the Latham acquisition, the nonrecurring revenue stepped up pretty meaningfully. So when we look out to next year, can you walk us through how to think about the cadence on that line, whether there is seasonality, types of embedded growth we can do there or, you know, as it moves to more of a as-a-service model, will we see that line come down maybe with the recurring side sort of accelerating in its place? And thanks.

John Pence: Yeah. I think, Rich, I would expect next year, or 2026, to be kind of in that low nineties of recurring revenue. I think it is pretty even throughout the year. The other thing that is also rolling up into that line is some professional services and implementation work with some of the large tax deals, which is a little bit more sporadic and not as predictable. But I would say, you know, a good way to model or think about it is low nineties next year in terms of recurring. And then I think we are hoping to have that kind of HaaS model in the back half of the year. And, you know, maybe as we get into 2027, we get to kind of the 95% recurring revenue again. But it is probably a little too early to call that one. But that is ultimately what we are trying to do, is move that hardware into a recurring model. But you are right. Spot on. I am just not sure we are going to get there in 2026.

Richard Kenneth Baldry: Great. And your internal adjusted EBITDA stepped up to meaningful new record highs now at the same time as valuations have come down pretty meaningfully for the sector. Sort of curious what your perception is of the private market for acquisitions, whether those valuation expectations have also come down to make that sort of more of a push in 2026? Or do you feel like it should be sort of business as usual and that that is not a major catalyst?

Patrick Goepel: Yes. I think, Rich, you know, we will be opportunistic around some of those opportunities. You know, the private companies sometimes trails the public company in kind of a reset, etcetera. And then, you know, we think and believe, and we put a lot more meat in the investor deck around AI evaluations in this business because, you know, we believe we are a system of record business. We work with the IRS, the banks, you know, we interface with time clocks and hardware. So there is a number of different areas that make this sticky. And unlike some of the large enterprise, you know, we are on a consumption-based model really anyway, and it is underserved in a marketplace, in small business. So, you know, we believe that valuations here in a public company, as people really analyze this space, we think they will go up.

We are going to tell that story and be loud about it because we see, quite frankly, a lot of opportunity. And then on the private side, we will be opportunistic if those private valuations come down. I will say I have gotten a couple of calls here over the last couple weeks, and a lot of people are trying to figure out, you know, kind of where they see. And we feel like we are a little bit of the one-eyed guy in the blind man’s world right now, where we think we have a really good path. And, you know, we telegraphed early on that $180 million to $200 million would be 30%. You will see our longer-term model has more aspiration than that 30%. And we believe we are in the market segment that really can drive it. So we think AI is an accelerator, not a deterrent.

We will be very focused on valuations continuing. We are getting at a fun part of the business where scale really matters, and we think we can make improvement here in bunches, and we are going to execute on that plan.

Richard Kenneth Baldry: And so I will ask a third, unfortunately. But we agree that for system-of-record class companies, this should be an accelerator at the top line. Also think that it can increase the long-term profitability because there are so many places that internally can cut costs for software-centric, tech-centric companies. Can you maybe talk a little bit about how much internally—you talked somewhat about the customer service side helping to take the equivalent of three reps’ worth of work off, which is great. How far, how deep do you think that can roll through the internal, you know, cost-saving side?

John Pence: I think we are in the early days from my perspective, Rich. I mean, we think there is a lot of opportunity to make, you know, a better experience for the customer and, obviously, take some cost out of the cost-to-serve side. But I think early, early days is my perspective. But Pat—

Patrick Goepel: Yeah. You know, one of the things, Rich, I agree with you, you know, we added a kind of a longer-term outlook slide on where we think this can go. And we mentioned the $180 to $200 at 30%. We ultimately think we can achieve about 50% margins. We gave the example of not only the, you know, kind of Luna with the 80,000 transactions and the three customer service reps, but also the retention opportunity with the event-driven marketing as we bring Asure Central together. When a small business goes, let us say from 20 employees, they now have COBRA eligibility of services. We can be proactive and lean in on that number. So that is a revenue generator. At 50 employees, it is worksite reporting. It is certain kind of, you know, savings accounts and 401(k)s.

We can highlight opportunities for that at different monetary amounts. So, we are just beginning, but we see opportunities on the revenue side, on the cost side. We see opportunity long term where AI can bring more traffic to us. Our marketing people are beyond excited where they see opportunity to continue to drive people to our platform. And then also ease of use. You know, we are seeing people use AI on voice, and then ultimately using that voice to, you know, make it easier to get in payroll hours. We also see the opportunity with AsureWorks where we will provide the software for a company to do it all, but if they want us to do it because we have the expertise, we can use AI internally to be more efficient. So I think this thing really opens up the model, and that is why we are going to have a separate call March 11, Yasmin Rodriguez and I, our CTO, because we are just getting started.

So I am really excited about the opportunities this is going to unleash, and, you know, we want to kind of educate, understand, and really make sure people understand the opportunities here because we are at an opportunity potentially that we have been planning for for a long time internally, but then this is a catalyst that is really going to help us.

Patrick McKillop: Thank you, Rich.

Operator: And our next question comes from the line of Jeff Van Rhee with Craig-Hallum Capital Group. Please proceed with your question.

Jeffrey Van Rhee: Great. Thanks for taking the questions. Nice to see that organic growth picking up there, so congrats on that. A few quick housekeeping. You mentioned the target reps. Just where are we now in terms of rep count? And is there anything going on in terms of sales incentives that is changing the focus more or less towards the existing base versus new customers?

Patrick Goepel: You know, we have had—we have been fortunate where we have had almost 65% to 70% new logos as part of our sales. Clearly, there is opportunity with the Asure Central to attach more products and services that will help on a volume perspective. But we also internally took away some sales friction. So, you know, we have opportunity for our salespeople to drive, you know, more attach rate and more products right at the point of sale. In some cases, you know, we did not want to penalize them for bringing in, let us say, in 401(k), a licensed person. So we are focusing on getting those four or more products in their bag will drive up commissions. That is important. What that also will do is over time, where I would like to be is somewhere around 35% new logos, 65% the base.

I think we have that kind of opportunity. And then with AsureWorks, I want to have the opportunity to really, you know, include all our products from a software perspective. But then if the client wants us to actually do the work and have the expertise because compliance, whether it is the IRS, the local agencies, HR, all that is pretty complex, we can provide that expertise with them. We see a huge opportunity to drive cross-sell in that area. And then as far as where we are today, I think we are somewhere around 118 reps or so, in that area. We have a plan to get to 150. And, you know, that 150 throughout the year—we are investing in enablement. We are investing in training. And, really, you know, we brought a leader under Eyal Goldstein that is really sharp.

I have had history with him. He recently came from Deel. Steve Cohen. I think he is going to do a great job with us in really getting the basics. He has seen this movie before of what we are trying to accomplish, and I think he is going to make a big difference here.

Jeffrey Van Rhee: Mhmm. Very helpful. And, John, on the guide, what is the implicit free cash flow expectation for the 2026 guide? And one other, if I could, on Latham being acquired last year. Just refresh me what the expectation was there in terms of revenues and then ultimately what it delivered?

John Pence: Yeah. It is also in the K disclosed. I think we did—and I will answer that last question first. I think in the quarter, about $4.5 million of revenue contribution from the acquisition, of which about $2.5 million was recurring and the other $2 million was hardware. So it is actually performing exactly the way we had hoped it would perform. So we are really happy with that acquisition. We are actually getting, you know, a higher cash contribution than we had actually modeled. We expected that to come in later. So it has been a pleasant surprise in terms of that acquisition. In terms of free cash flow, again, the way I think about it, Jeff, is I take the adjusted EBITDA number. So at the midpoint, I think we are at 24% times $160 million.

Right? So what is that math? I am going to do it real quick. That puts you at roughly $38 million. And then the way I think about it is I deduct software cap as a major one. We are going to be roughly—software cap again next year is going to be in the $15 million to $16 million range. That is what we have modeled. So if you take that deduction, that brings you to—right, you are at almost $22 million. And then I take away the interest. Right? So about $6 million in interest. So we are going to be in that range, kind of mid-teens, when I think of unlevered free cash flow.

Jeffrey Van Rhee: Okay. Got it. Very helpful. And then, Pat, just back to you just very briefly. Just talk for a second on Asure Central. You blew past, but what do you—I mean, from a user experience, you got some pretty rapid adoption there. What does this look like? I have not seen it side by side. What is the difference in the impression of a user, and how much easier is it to adopt and start taking additional services?

Patrick Goepel: Yeah. I think, you know—and one of the things we will have a demo on this March 11 as part of our EAX conversation and where we are taking the product and service. But first of all, with Luna, it is a single pane of glass where, you know, we have a common user interface across all our products. So all the data is in one place. And for us, from a usability perspective, you know, now you have, you know, whether it is payroll, benefits, your check stub, you know, you want to change, at the employee level, your direct deposit, etcetera. You have that ability to do it, and Luna will show you how to do it. So, you know, we think it is degrees of difficulty easier. It is a more modern look. And then with AI and Luna, it can, you know, help do the work for you, or it will tell you how to do it and instruct you how to do it.

So the feedback has been very positive. If you think about where we have been over the last five, six years, we bought point solutions. We started with Asure Identity where it knows it is Jeff Van Rhee that is logging into the system based on your identification and multifactor authentication. Now what we are doing is putting all the products in a single pane of glass, and then more and more, you will see a common look and feel throughout the whole product. And from that perspective, what is interesting about that is now the whole solution combined together is really AsureWorks where you have all the products and services available, and, you know, now if you have an event, then Luna will suggest, “Hey, here is an event that you want to be compliant on.

Would you want us to help you get compliant?” So we think we are just getting started in this area. Fourth quarter was a big milestone, but we will see improvements every quarter throughout the year. So really excited about that opportunity.

Jeffrey Van Rhee: Yep. Makes complete sense. And thanks on the fireside. I think it is desperately—I mean, every time a plug-in pops, a whole sector gets destroyed. I think people need help separating winners from losers. So appreciate that event. Look forward to it.

Patrick McKillop: Thank you, Jeff.

Operator: And our next question comes from the line of Greg Gibas with Northland Securities. Please proceed with your question.

Greg Gibas: Great. Good afternoon, guys. Congrats on the results. Nice to see that attach rate improve pretty meaningfully there. I wanted to ask just about your guidance and maybe what level of organic growth is implied there and maybe just your expected pace of acquisitions in 2026?

John Pence: I think—and I will let Pat go—I think we expect to be kind of the double-digit organic for the full year. I am not sure we will be 100% every quarter that way. But I do think we will have kind of a, you know, double-digit, or at least that is what we are hoping for in terms of double-digit organic. Pace of acquisitions, as Pat mentioned, I think in an earlier comment, we do not have anything right now that is imminent. We are always going to be opportunistic. But we have got a lot in our wheelhouse right for the second. But that is my perspective, Pat.

Patrick Goepel: Yeah. And great team. You know, we did not model acquisitions in. Clearly, we are going to do some with the resellers, etcetera. We do not have anything imminent. But also, the world changed a little bit here over the last three weeks, etcetera. I will tell you, you know, I have gotten calls and have been pretty active. You know, we will kind of inform you each quarter, you know, how we are doing and what we are thinking about it. Clearly, there will be some opportunities just based on our pipeline and based on the resellers, but we will let that shake out and we will report to you each quarter. But clearly, we will be opportunistic in this area. And then the other thing with the attach rates going up the way, you know, we are starting to show—and I think we are really in the early innings—some of these type of acquisitions, you know, look pretty good to us because we have the ability to cross-sell and not only drive the cost line, but we can drive the revenue line.

Greg Gibas: Makes sense. Thanks for pointing that out. And I wanted to ask just about, you know, you had really nice adoption of Asure Central. Can you remind us maybe what your plans are for the timing of continued adoption there? Like when maybe you expect to get to whatever full adoption levels look like? And it seems like it could be a continued accelerator of that attach rate.

Patrick Goepel: Yeah. I think, you know, first of all, we have a big cohort with, you know, the Latham acquisition, which is about 14,000. And, you know, that will be available here in early April. And really, if I think about it, the second quarter we want to continue to have most of our direct clients adopted into Asure Central. So I think the first huge wave has already started to happen. But by the first half of the year, the second wave really will be there. And then from our perspective, there will be some other stragglers or adoption into the second half of the year. But for the most part, the first half of the year will be fully adopted.

Greg Gibas: Got it. Thanks very much.

Patrick McKillop: Thank you, Greg.

Operator: And our next question comes from the line of Vincent Colicchio with Barrington Research. Please proceed with your question.

Vincent Colicchio: Pat, can you discuss the sales cycles and pipeline levels for your key offerings?

Patrick Goepel: Yes. Pipeline prospects were really good. We, you know, are increasing our marketing spend this year. We think that there is huge opportunity AI-assisted, as well as, you know, we have used some tools here that, you know, we think make a difference in the pipeline creation. We will continue to build pipe. Obviously, fourth quarter, you kind of sell for January, and then you are building pipe a bit. We are right where we want to be. I would tell you, though, you know, April, May, I think you are going to see pipeline increase quite a bit. The pipeline over the last, let us say, 25 days or so has been really, really good. From a sales cycle perspective, we have not seen any big changes. I do think some of the noise on the financial community around, you know, AI and software—we see it as an accelerant.

For short term, somebody reads their headlines and they kind of say, okay, what is with that? You know, we are not typically in the space where our customer is Main Street America, frontline workers, whether it is plumbers, it is people that—hotel workers, etcetera—they interface with either time or POS solutions. They interface with bankers. They interface with the IRS, etcetera. They want help. And so from our perspective, when they see that need, and they know that we can help them both from a software perspective but also a compliance perspective, and then ultimately from a people perspective to provide the people to run the software, they view that as an opportunity. So I think pipeline will grow quite a bit. Right now, I am okay with pipeline.

It is about 120% where it was last year. But clearly, I want to keep focusing on doing that, and then I want to hire people, and then our marketing spend will drive pipeline quite a bit. And I could see already by the programs in place by second quarter, we will have a pretty decent pipeline of where I want to be, which is about 150% where we were last year.

Vincent Colicchio: Thanks, Pat. And question on the competitive landscape, anything to call out in terms of changes since last quarter?

Patrick Goepel: No, not really. I think—people are—from my perspective, I think it has been, you know, what I would say, and it ties a little bit to our industry is, you know, I think early on, people are saying, well, you know, you can embed the calculation thing, and, you know, that is good enough. For Main Street America, that is not good enough because, you know, the penalties are tough. The gravity of the data—you know, where you have seven years of history and, you know, you have compliance issues, whether it is HR, payroll, you have different government agencies, different banking agencies—those, that complexity does not go away in an embedded solution. So from our perspective, you know, what we are seeing is kind of, hey.

How do you provide the expertise and how do you provide the people, the workflow, the enablement, and the technology through AI and the system of record to really accelerate your value proposition? And I think we are in a position that we have that. And so we are going to, you know, pound our chest on that and keep getting really clear on our value proposition. I do think that is resonating with clients. And we think we are in a really good position here to have an excellent 2026.

Vincent Colicchio: Thanks, Pat.

Patrick Goepel: Thank you.

Operator: As a reminder, if you would like to—

Patrick Goepel: Well, looks like there are no more questions. And hey, first of all, thank you for coming to the conference call. March 11—love to see you. We are going to talk about AI and a demo of our product and how we are using—You know, Luna is being helpful to customers and employees as well as our solutioning. You know, when I think back, I have been in this industry a long time. And when I see technology shifts, whether it is DOS to Windows, Windows to client-server, client-server to Internet, Internet to mobile, right now, the technology shift that we are going through is really exciting. And when you think about opportunities here, we think we have a great moat available. We think we can use AI in a way that really will accelerate growth.

And it is in these technology shifts that people really can thrive. We think we are at a really good opportunity here, and we hope you agree with us. And come on March 11 because we think we have a story that is unique to us in a world that is ever changing and really excited about the opportunity. Really appreciate your time. Thank you.

Operator: Thank you. And with that, ladies and gentlemen, this does conclude today’s teleconference. We thank you for your participation, and you may disconnect your lines at this time, and have a wonderful day.