Q2 2026 Asure Software Inc Earnings Call Transcript
Key Points
- Asure Software Inc (ASUR) reported strong Q2 2026 results with total revenue growth of 23% year-over-year to $37.1 million, driven by broad-based growth across business lines.
- Adjusted EBITDA increased 48% year-over-year to $7.7 million, with margins expanding 400 basis points to 21%, reflecting improved operational efficiency and scale.
- The company achieved a significant milestone with 2 million employees from Venture Employer Services now live on its enterprise payroll tax management platform, with a robust pipeline of future opportunities.
- AsureWorks, the administrative services outsourcing offering, is gaining strong traction with a growing pipeline and new client additions, representing up to 5 times the revenue of a payroll-only client.
- AI initiatives are showing tangible results, with a 30% increase in platform adoptions and a 38% increase in interactions with Luna, the AI agent, driving both revenue opportunities and cost efficiencies.
- The company raised its full-year 2026 adjusted EBITDA margin guidance to 24%-25%, reflecting confidence in continued profitability improvements.
- Organic growth rate slowed sequentially to 5% in Q2 2026 from 7% in Q1 2026, attributed to seasonality, though the company expects double-digit organic growth in the second half.
- The company did not complete any reseller acquisitions in Q2 2026, and while it expects a few deals in the second half, none are currently included in guidance, creating uncertainty around incremental growth.
- A forecasted headwind of approximately $600,000 to revenue during the first half of 2027 due to the transition of Latham to a hardware-as-a-service model, which will pressure nonrecurring revenue.
- The company is not forecasting any further interest rate cuts this year based on current market sentiment, which could limit potential tailwinds from interest income on client funds.
- Full-year revenue guidance implies a more muted overall growth rate in the second half due to a difficult comparison with $10 million in nonrecurring revenue from the prior year, which is expected to decline to $5-$6 million.
- The company is still about 10 sales reps short of its goal of 150 by the end of 2026, and while confident, it acknowledges the challenge of hiring full-solution sales reps with a different skill set.
Good afternoon, and welcome to Asure's second quarter 2026 earnings conference call. Joining us for today's call are Chairman and CEO, Pat Goepel, Chief Financial Officer, John Pence; and VP of Investor Relations, Patrick McKillop.
(Operator Instructions) I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.
Thank you, operator. Good afternoon, everyone, and thank you for joining us for Asure's second quarter 2026 earnings results call. Following the close of the market, we released our financial results. The earnings release is available on the SEC's website and our investor relations website at investor.asuresoftware.com, where you can also find our investor presentation.
During our call today, we will reference non-GAAP financial measures, which we believe to be useful to investors in understanding our business and exclude the impact of certain items.
A description and timing of these items, along with a
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