Asure Software (NASDAQ:ASUR) reported second-quarter 2026 revenue growth of 23% year over year, citing broad-based performance across its business lines, increased cross-selling and progress in its payroll tax, human capital management and artificial intelligence initiatives.
Total revenue rose to $37.1 million from $30.1 million in the prior-year quarter. Recurring revenue increased 19% to $34 million and represented approximately 91% of total revenue. The company’s organic growth rate was 5%, compared with 1% a year earlier and 7% in the first quarter, with management attributing the sequential moderation in part to seasonality.
Guidance Updated as Recurring Revenue Takes Larger Role
Chief Financial Officer John Pence said Asure expects full-year 2026 revenue of $159 million to $163 million and adjusted EBITDA margins of 24% to 25%. For the third quarter, the company expects revenue of $38 million to $40 million and adjusted EBITDA of $8 million to $10 million.
Pence said the company tightened its full-year adjusted EBITDA margin outlook based on its performance in the first two quarters, rather than a major structural change in its business or cost base. Asure also expects to generate positive levered free cash flow in the mid- to high-teens range for the full year, based on adjusted EBITDA at the midpoint of guidance, less approximately $15 million in software capitalization and approximately $6 million in cash interest expense.
Asure ended the quarter with $19.7 million in cash and cash equivalents and $68.9 million in total debt as of June 30.
Management said the back half of 2026 is expected to be driven primarily by recurring organic growth. Pence noted that the company generated roughly $10 million in non-recurring revenue in the second half of 2025, including professional-services work tied to large tax deals and revenue related to Lathem hardware. For the second half of 2026, Asure expects approximately $5 million to $6 million of non-recurring revenue under its current outlook.
Chief Executive Officer Pat Goepel said the company expects double-digit organic recurring revenue growth in the second half, supported by payroll, time and attendance, 401(k), HR compliance and cross-selling activity. He said the company’s guidance does not include contributions from potential acquisitions or a significant amount of tax-related professional services work.
Platform Adoption and Tax Management Progress
Goepel said a majority of Asure’s approximately 30,000 direct clients are now using the AsureCentral platform, in line with the company’s forecast from its prior earnings call. The number of clients purchasing multiple products rose 6% from the year-earlier period, and management said it is pursuing an objective of increasing the average client relationship from about two products toward four or more over time.
The company also reported that 2 million supported employees of Vensure Employer Solutions are now live on Asure’s enterprise payroll tax management platform. Goepel said the company’s opportunity pipeline remains robust, though he declined to provide details for competitive and confidentiality reasons.
New sales bookings for core human capital management payroll grew 14% from the second quarter of 2025, while contracted backlog was approximately $80 million. Asure expects to convert about 41% of that backlog over the next 12 months.
Management said it did not see meaningful changes in sales-cycle length or competitive intensity during the quarter. The company continues to model flat headcount growth among its clients, which are primarily small and midsized businesses in payroll-intensive and compliance-driven industries.
AsureWorks and Sales Force Expansion
Goepel said the company’s AsureWorks administrative services outsourcing offering continued to gain traction, adding clients and expanding its pipeline among small hotel chains, restaurants, HVAC companies and other businesses that require payroll and HR compliance support.
He emphasized that AsureWorks is not a professional employer organization model and does not involve co-employment risk. The company said managed payroll and compliance clients can represent up to five times the revenue of a payroll-only customer.
Asure is expanding its sales organization with a goal of reaching 150 representatives by the end of 2026. Goepel said the company remained about 10 representatives short of that objective but was confident it could meet the target. The company is seeking more consultative sales professionals capable of selling its broader platform rather than individual products.
The split between revenue from existing customers and new customer logos was approximately 53% and 47%, respectively. Management’s longer-term target is a mix of 65% base expansion and 35% new-logo business.
AI Adoption and Lathem Transition
Management said Luna, Asure’s AI agent, is being used to support customer-service, sales and compliance workflows. Platform adoptions involving Luna increased more than 30% from the first quarter, while interactions increased approximately 38%.
Asure said Luna has transcribed 147,000 voicemail calls and screened about 196,000 emails for sentiment analysis. Pence said the company is still in the early stages of using AI to reduce costs, but it is already using call transcription and trigger words to identify customers who may need proactive outreach.
Goepel said AI-driven intent and trigger data could also support cross-selling, including offers for COBRA administration, retirement savings services and managed services. He said the company is expanding the automated Luna model from its Canadian tax solution across U.S. payroll, U.S. tax and HR compliance.
Separately, Pence said the Lathem acquisition has performed at or slightly above expectations, with retention remaining consistent and most anticipated cost savings realized. Asure is transitioning Lathem toward a hardware-as-a-service model, which it expects will create an approximately $600,000 revenue headwind in the first half of 2027 as some hardware sales shift into recurring revenue. Management said the transition is expected to improve customer value over time.
Asure did not complete reseller acquisitions during the second quarter, but management said it is evaluating opportunities and expects it could complete several deals in the second half of the year. No acquisitions are included in the company’s current guidance.
About Asure Software (NASDAQ:ASUR)
Asure Software, Inc (NASDAQ: ASUR) is a Texas‐based technology company specializing in cloud‐based workforce and workspace management solutions. The company develops software that streamlines human capital management (HCM), payroll processing, time and attendance tracking, and workspace reservation for businesses seeking to optimize employee experience and operational efficiency.
The Asure platform includes modules for payroll administration, benefits enrollment, performance management, applicant tracking and onboarding, as well as mobile and web‐based timekeeping.
