Asure Software(ASUR) - 2024 Q4 - Annual Report

Financial Performance - Total revenue for the year ended December 31, 2024, was $119,792,000, a slight increase of 0.6$119,082,000 in 2023[230]. - Recurring revenue increased to $114,471,000 in 2024, up 14.7$99,734,000 in 2023[230]. - Net loss for 2024 was $11,773,000, compared to a net loss of$9,214,000 in 2023, representing a 27.7% increase in losses[230]. - Total current assets decreased to $237,277,000 in 2024 from$267,220,000 in 2023, a decline of 11.2%[229]. - Cash and cash equivalents at the end of 2024 were $21,425,000, down from$30,317,000 in 2023, a decrease of 29.4%[229]. - Total liabilities decreased to $239,323,000 in 2024 from$252,213,000 in 2023, a reduction of 5.1%[229]. - Total stockholders' equity increased to $197,315,000 in 2024 from$191,655,000 in 2023, an increase of 2.8%[229]. - Operating expenses rose to $92,844,000 in 2024, up from$88,536,000 in 2023, an increase of 4.1%[230]. - Cash flows from operating activities provided $9,388,000 in 2024, a decrease from$18,900,000 in 2023[234]. - Total cash, cash equivalents, restricted cash, and restricted cash equivalents decreased from $177,622 million in 2023 to$145,712 million in 2024, a decline of approximately 18%[236]. - Cash paid for income taxes significantly reduced from $432 million in 2023 to$18 million in 2024, a decrease of about 96%[236]. - Basic loss per share for the year ended December 31, 2024, was $(0.45), compared to$(0.42) in 2023[344]. Acquisitions and Investments - Asure Software plans to continue acquiring businesses from Reseller Partners, which may pose integration challenges and affect financial results[16]. - The company acquired substantially all assets of an applicant tracking technology company for a total purchase price of $15,162, which included$7,900 in cash, a $3,000 promissory note, and shares valued at$4,262[280]. - The purchase consideration allocated $2,700 to customer relationships and$3,200 to developed technology, with the remaining $8,713 allocated to goodwill[281]. - The company completed eleven customer relationship asset acquisitions in 2024 for a total purchase price of$14,049, including $5,842 in cash paid during the year[284]. - The company completed two customer relationship asset acquisitions post-December 31, 2024, for a total purchase price of$7,801,000[347]. - The company issued 1,025,000 shares for acquisitions in 2024, contributing to an increase in additional paid-in capital to $504,849,000[231]. Revenue Recognition and Deferred Revenue - Revenue from maintenance/support is recognized ratably over the non-cancellable term of the support agreement, typically one to three years[268]. - Revenue from professional services is recognized on a proportional performance basis as the service is provided[267]. - The company recognizes contract liabilities, or deferred revenue, for amounts invoiced to customers in excess of recognized revenue, primarily ranging from one to five years[273]. - Revenue recognized from deferred revenue was$6,626 for 2024, down from $7,488 in 2023[309]. - Approximately$79,095 of revenue is expected to be recognized from remaining performance obligations, with 32% expected to be recognized over the next 12 months[310]. - The company finalized various multi-year arrangements, increasing deferred revenue balances as of December 31, 2024, compared to 2023[311]. Market and Operational Risks - Asure Software reported a material weakness in internal control over financial reporting, which may lead to future misstatements in financial statements[16]. - The company has a history of losses and cannot guarantee future profitability[16]. - The expiration of Employee Retention Tax Credits regulations is expected to adversely impact revenues in 2024 and 2025[18]. - The company is exposed to various market risks, including interest rate and foreign exchange risks, and has not used derivative instruments to mitigate these risks[19]. - Significant costs are incurred due to operating as a public company, which may affect financial condition and management focus[18]. - Client funds held in trust are subject to market and liquidity risks, which could materially affect financial results[18]. - The company relies on third-party data centers and computing infrastructure, and any disruptions could adversely impact operations[16]. - Asure Software's ability to maintain competitive advantage may be impaired if proprietary rights are not adequately protected[18]. - The markets in which Asure operates are highly competitive, and failure to compete effectively could adversely affect operating results[18]. Legal and Regulatory Environment - There were no material legal proceedings against the company as of December 31, 2024, indicating a stable legal environment for operations[245]. - The company filed a universal shelf registration statement for up to $150,000 in securities, effective April 19, 2024[317]. Tax and Deferred Tax Assets - The provision for income taxes attributable to continuing operations for 2024 was$933,000, significantly higher than $109,000 in 2023[335]. - Deferred tax assets totaled$26,467,000 in 2024, up from $23,420,000 in 2023, while total deferred tax liabilities increased to$10,582,000 from $9,039,000[336]. - The valuation allowance against net deferred tax assets increased by$2,388,000 during the year ended December 31, 2024[338]. Research and Development - Asure Software, Inc. continues to invest in research and development to expand its Human Capital Management (HCM) solutions, addressing HR complexity and enhancing employee productivity[240]. - The company operates a single reportable segment primarily deriving revenue from payroll services in the United States[243]. - Asure HCM suite includes seven product lines, enhancing efficiencies and providing value-added solutions to employers and employees[240]. - The company has adopted new accounting standards for segment reporting, effective for fiscal years beginning after December 15, 2023, which will enhance reportable disclosures[247].