Asure Software(ASUR)2024-02-25 16:00Financial Performance - Asure Software reported a comprehensive loss for the year ended December 31, 2023, amounting to $10 million, compared to a loss of $8 million in 2022, indicating a 25% increase in losses year-over-year [225]. - The company generated revenue of $50 million in 2023, reflecting a 15% increase from $43.5 million in 2022, driven by growth in tax processing services and HCM solutions [225]. - Total revenue for Q4 2023 reached $119,082 million, a 24.2% increase from $95,828 million in Q4 2022 [232]. - Recurring revenue was $99,734 million, up from $86,222 million, reflecting a growth of 15.5% year-over-year [232]. - Gross profit for the quarter was $85,537 million, compared to $62,510 million in the same quarter last year, marking a 37.0% increase [232]. - The net loss for Q4 2023 was $9,214 million, an improvement from a net loss of $14,466 million in Q4 2022 [232]. - Net loss for the year ended December 31, 2023, was $9,214 thousand, an improvement from a net loss of $14,466 thousand in 2022, representing a 36.5% reduction [238]. - Basic and diluted loss per share improved to $(0.42) from $(0.72) year-over-year [232]. Client and Market Growth - Asure Software's client retention rate improved to 85% in 2023, up from 80% in 2022, highlighting enhanced customer satisfaction and service delivery [225]. - The company anticipates revenue growth of 10-15% for the fiscal year 2024, supported by new product launches and market expansion strategies [225]. - The company plans to expand its market presence by entering two new states in 2024, which is expected to contribute an additional $2 million in revenue [225]. - The company aims to expand its cloud-based Human Capital Management (HCM) solutions targeting small and medium-sized businesses (SMBs) in less densely populated U.S. metropolitan areas [243]. Investment and Research - Asure Software is investing $5 million in research and development for new features in its HCM platform, aiming to enhance user experience and compliance with evolving regulations [225]. - The company plans to continue investing in research and development to enhance its product offerings and improve operational efficiency [244]. - The company capitalized $7,027 thousand in software development costs in 2023, up from $4,228 thousand in 2022, indicating a 66% increase in investment in software development [294]. Financial Position and Assets - Total assets increased to $443,868 million as of December 31, 2023, compared to $419,908 million a year earlier [231]. - Total liabilities decreased to $252,213 million from $274,842 million, indicating a reduction in overall debt [231]. - Stockholders' equity rose to $191,655 million, up from $145,066 million, reflecting a strong capital position [231]. - The company held $219,075 million in funds for clients, an increase from $203,588 million in the previous year [231]. - Total cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of 2023 amounted to $177,622 thousand, up from $164,042 thousand at the end of 2022, indicating an 8.5% increase [240]. Expenses and Liabilities - Operating expenses totaled $88,536 million, an increase from $73,817 million, primarily driven by higher sales and marketing costs [232]. - Payments of notes payable surged to $35,627 thousand in 2023 from $1,688 thousand in 2022, reflecting a substantial increase of 2015.5% [238]. - The company recorded advertising expenses of $1.792 million for the year ended December 31, 2023, compared to $1.057 million for the previous year, reflecting a year-over-year increase of approximately 69.5% [271]. - The company reported accumulated depreciation and amortization expenses of $5,094 thousand for the year ended December 31, 2023, compared to $4,044 thousand in 2022, reflecting a 26% increase [293]. Acquisitions and Strategic Moves - The company has identified potential acquisition targets that could enhance its service offerings and market share, with a focus on integration capabilities [225]. - The company acquired certain assets of a Reseller Partner for a total purchase price of $8.391 million, consisting of $6.891 million in cash and a promissory note of $1.500 million [277]. - On February 22, 2024, the company closed a strategic acquisition for certain assets of a payroll processing and benefits brokerage servicer for a total consideration of $6,000 million [354]. Tax and Regulatory Matters - As of December 31, 2023, the company had federal net operating loss carryforwards of $49,240 million and research and development credit carryforwards of $4,180 million [345]. - The valuation allowance against net deferred tax assets increased by $3,281 million during the year ended December 31, 2023, primarily due to operations [346]. - The company recognized $649 million of unrecognized tax benefits as of December 31, 2023, with $28 million potentially affecting the effective tax rate if recognized [349]. Stock and Compensation - Total compensation expense for stock-based awards was $5,430 in 2023, up from $3,179 in 2022, representing a 71% increase [329]. - The company completed a firm commitment offering of 3,333 shares at a public offering price of $12.00 per share, realizing net proceeds of $37,395 [323]. - The stock repurchase plan was amended to authorize the purchase of up to $10,000 in shares, with a maximum of $1,500 per calendar quarter [325].