Financial Data and Key Metrics Changes - First quarter revenues were $34,900,000, an increase of 10% compared to the prior year [5][13] - Recurring revenues grew 10% to $33,200,000, representing 95% of total revenue [13][29] - Gross profit increased by 9% to $24,600,000, with gross margins consistent at 71% [15][16] - Net loss for the first quarter was $2,400,000 compared to a net loss of $308,000 in the prior period [16] - Adjusted EBITDA increased to $7,300,000 from $6,800,000 in the prior year, with an adjusted EBITDA margin of 21% [16] Business Line Data and Key Metrics Changes - Strong performance from payroll tax management products and contributions from payroll benefits and marketplace offerings [6][29] - HR compliance remains depressed due to the wind down of the ERTC program, but expected to improve in the second half of 2025 [15][29] - Assure Pay is witnessing positive trends, with over 70% of active card users utilizing it more than three times per month [9][29] Market Data and Key Metrics Changes - Contracted revenue backlog increased by 339% year over year to $82,000,000 [11][29] - The company has modeled conservatively for employment growth and potential interest rate cuts [27] Company Strategy and Development Direction - The company is focused on a multi-pronged growth strategy, including organic and inorganic methods [10][19] - Plans to continue expanding product offerings and cross-selling opportunities to existing clients [10][25] - A new $60,000,000 credit facility was finalized to support acquisitions and growth initiatives [18][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's resilience despite macroeconomic uncertainties [27][46] - The company anticipates accelerated revenue growth in the second half of 2025, driven by improved attach rates and backlog [20][88] - Management believes the worst is over regarding HR compliance issues related to ERTC, with expectations for recovery in the second half of the year [40][42] Other Important Information - The company has made 16 acquisitions over the past eighteen months, primarily focused on customer acquisition [19] - The introduction of new benefit solutions, including a 401(k) solution, is contributing positively to revenue growth [17] Q&A Session Summary Question: What are you seeing in terms of productivity with dedicated sales teams? - Management highlighted that attach rates have improved, and dedicated sales specialists are expected to drive further growth [34][35] Question: How is HR compliance performing with ERTC and HR compliance bundles? - Management noted that retention rates had declined but are expected to improve in the second half of 2025 as the cohort stabilizes [39][42] Question: Any impact from tariffs on pipeline and economic uncertainty? - Management indicated that while there are some crosswinds, the small business segment remains active and pipeline metrics are positive [46][48] Question: Can you elaborate on the investments and product roadmap? - Management discussed recent acquisitions and the development of new products, emphasizing a focus on cross-selling and operational efficiency [55][60] Question: What is the outlook for acquisitions with the new credit facility? - Management confirmed two acquisitions in the first quarter and expects an increase in acquisition activity in the second half of the year [70][72] Question: How should we think about tax deals ramping into revenue? - Management indicated that contracted backlog is a key indicator, with expectations for larger deals in the second half of the year [75][76] Question: Can you provide updates on the Canada tax product and competition? - Management reported a strong early pipeline for the Canadian tax product and noted that interest levels are high in the competitive environment [99][101]