Asure Software Inc

Greetings. Welcome to Assure Software's third quarter earnings call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded. At this time, I'll now turn the conference over to Patrick McKillop, Vice President. Patrick, you may now begin your presentation.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for Assure's third quarter 2023 earnings 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 investor.assuresoftware.com, where 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. The 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. and 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, but I just wanted to take a moment to remind folks of some upcoming investor relations activities. We will be participating in the TD Cow and HCM conference tomorrow, November 14th, with virtual one-on-one meetings. On November 15th, we will be attending the Roth MKM Technology Conference in New York. And on November 16th, we will be attending the 14th Annual Craig Hallam Alpha Select Conference in New York, plus participating in the 13th Annual Needham Virtual SaaS One-on-One Conference. The management team will use a split squad to cover both events on November 16th to make sure we can accommodate all investors' meeting requests. This outreach is very important to assure, and I would like to thank all those that assist us in our efforts to connect with investors. Finally, I would like to remind everyone that this call is being recorded. It will be made available for replay via the link available on the investor relations section of our website. With that, I would now like to turn the call over to Pat Geppel, Chairman and CEO. Pat.

Thank you, Patrick, and welcome everyone to Assure Software's third quarter 2023 earnings call. I'm joined on this call by our CFO, John Pence, and we'll provide a business update for the quarter and our outlook for the remainder of 2023, plus our guidance for 2024. Following our remarks, we'll be available to answer your questions. As you can see from our reported results, our strong momentum continued in the third quarter, with strength coming from solid execution across the business. Our revenue growth in the third quarter was 34% versus the prior year period, which was almost entirely organic. Reoccurring revenues grew 19% versus the prior year period, and our non-reoccurring revenues were up by 3.6 million versus the prior year period, once again driven by ERTC revenue strength. We will discuss more detail on ERTC once we get to our updated guidance, which we gave in today's press release. Our HR compliance revenues and Assure Marketplace revenues both showed very strong growth during the quarter versus the prior year period. And we're very excited about the future for these business lines. Over time, we believe that the Assure Marketplace can become 30% plus of our total revenues. and it is a high-margin business, as is the HR compliance business. Additionally, interest revenues contributed to the growth in the quarter, and we're able to benefit from the rise in the yield curve, plus we benefited from consolidation of bank accounts, which drives higher investable balances. We continue to build on our momentum by advancing our technology through leading partnerships and launching strategic sales initiatives such as the bundling of our 401 products with payroll to drive new client additions. This particular initiative was launched a short time ago and the reception we have received thus far has been very enthusiastic. Many small businesses traditionally have not had the resources to offer 401 retirement solutions, but approximately 22 states in the United States have mandated 401 plans for small businesses, and we expect more to pass similar mandates. The U.S. Government Secures Act 2.0 aims to increase employee participation in retirement plans by funding the setup of employer-based retirement plans while providing the funding they need to do so and ensure as the solutions employers need to set up the plan. Our sales efforts in the third quarter produced a 26% increase and new sales bookings over and above the 91% increase we delivered last year. We've expanded our sales force during the year and been very pleased with the quality of the new hires we made. We're supporting our sales efforts with digital marketing, which is driving higher level of sales leads and productivity in 2023. Based on our performance and our current expectations, we're guiding for fourth quarter revenues to be in the range of 25 to 27 million, which excludes any potential revenues from ERTC filing. We are expecting our 2024 revenues to be in the range of 125 to 129 million with EBITDA margins of between 20 and 21%. Our 2024 guidance also excludes any potential contributions from ERTC filings, but does include our plans to resume acquisitions in earnest. As many of you are aware, the IRS plays a pause on the processing of ERTC claims back in September to clamp down on some bad actors that were filing claims which should not have been filed. Assure is a processor of claims only, and we refer our clients to their tax advisors to see if they qualify for the ERTC credit. We continue to await further clarification from the IRS and expect the program will likely be resumed. However, given the uncertainty, we want to be conservative in our assumptions on ERTC revenue going forward. Now, I would like to hand it off to John to discuss our financial results in more detail. John?