On Thursday, Asure Software (NASDAQ:ASUR) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Asure Software reported a strong Q1 2026 with revenues of $42.8 million, a 23% increase year-over-year, driven by momentum in core business lines and investments in platform, salesforce, and AI capabilities.
The company highlighted the successful adoption of Assure Central, with plans to have the majority of their 30,000 direct clients on the platform by the end of Q2 2026, enhancing cross-sell opportunities.
Asure Software introduced AssureWorks, an administrative services outsourcing model, expected to generate significant revenue over time, with early positive reception and a growing pipeline.
AI integration, particularly the Luna AI agent, is enhancing operational efficiency, with over 100,000 cases analyzed monthly, contributing to improved client service and internal processes.
The company updated its full-year 2026 guidance to $159 million to $163 million in revenue and an adjusted EBITDA margin of 23% to 25%, reflecting confidence in achieving double-digit organic growth.
Management emphasized the durability of their business model amidst global uncertainties, with a focus on expanding sales capabilities and maintaining growth in both new logos and base expansion.
Full Transcript
OPERATOR
Good afternoon and welcome to Assure Software's first quarter 2026 earnings conference call. Joining us today's call are Chairman and CEO Pat Geppel, Chief Financial Officer John Pence, and Vice President of Investor Relations Patrick McKillop. Following their prepared remarks, there will be a question and answer session for analysts and investors. I would now like to turn the call over to Patrick McKillip for introductory remarks. Please go ahead.
Patrick McKillop (Vice President of Investor Relations)
Thank you operator. Good afternoon everyone and thank you for joining us for Asure Software's First Quarter 2026 Earnings Results Call following the close of the market, 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 our 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'll hand the call over to Pat in a moment, but I just wanted to take a moment to remind people of our upcoming investor relations activities. On May 13th we are attending the 21st Annual Nedum TMT Conference in New York and on May 14th the Houlihan Lokey One Conference also in New York. On May 28th we will attend the Craig Hallam Conference in Minneapolis. On June 23rd we will participate in the Northland Capital Markets Conference which is being held virtually. We also are in the process of scheduling some non deal roadshows. Investor outreach is very important to Assure and I would like to thank all of those that assist us in our efforts to connect with investors. Finally, I would like to remind everyone that this call is being recorded and it will be made available for replay via a link available on the Investor Relations section of our website. With that, I would like to now turn the call over to Pat Geppel, Chairman and CEO.
Pat Geppel (Chairman and CEO)
Pat thank you Patrick and welcome everyone to Assure Software's first quarter 2026 earnings results call. I'm joined on this call by our CFO John Pence and we will provide a business Update for Quarter 12026 results as well as our updated outlook for the remainder of the year. We are very pleased to report a strong start in 2026. First quarter revenues came in at $42.8 million, representing growth at 23% compared to Q1 of 2025. This performance reflects continued momentum across our core business lines and validates the investments we've made in our platform, salesforce and AI capabilities over the past year. Our organic growth rate for quarter one 2026 was 7% compared with 3% in quarter one 2025 and 3.5% in quarter one 2024. This is a significant acceleration in a quarter which historically has shown some seasonality. We're encouraged by the drivers behind it increasing attach rates with our existing client space as well as continued new logo wins. Given global uncertainty, we're taking a conservative stance on operating the business. However, we remain very bullish on the customer response to our platform improvements and we believe we can deliver double digit organic growth as we move through the remainder of 2026. Since the launch of Assure Central in October 2025, adoption has continued at a rapid pace and we believe that by the end of the second quarter 2026, the majority of our approximately 30,000 direct clients will be on the platform. With the majority of our direct client base now on a single unified platform, we believe we are increasingly well positioned to accelerate cross sell and attach rates throughout the remainder of 2026. Our multi product attach rates continue to improve. The number of clients per purchasing multiple products in our payroll Business grew by 15% in quarter one compared to quarter one of 2025. We continue to work toward our internal goal of moving clients from an average of two products to four or more or more products per relationship. Earlier this year at our sales kickoff we introduced Assure Works, which is our administrative services outsourcing or ASO model, which allows clients to delegate key payroll and HR compliance processes to Assure. We are scaling Assure Works thoughtfully, building sales implementation and support capacity based on early results. It's still early days, however, the reception has been very positive. Our pipeline is growing and we've started to win new clients. We're seeing interest across multiple types of buyers. Small hotel chains, restaurants, H Vac companies are among the early adopters, which is consistent with our broader client base of Main street businesses that need payroll and HR compliance support but lack the internal resources to manage it themselves. We currently have six sales reps dedicated to AssureWorks in the pilot effort and plan to add a few more in the near term. This offering is strategically important. Clients who adopt managed payroll and compliance services typically represent two to three times the revenue of a payroll only client. Importantly, it sure works is not a PEO model. We're not taking on co employment risk. So for clients constrained by the costs or rigidity of a traditional PEO, we believe AssureWorks is a compelling flexible alternative. We are on track toward our full year target of 150 sales reps and continue to invest in training and enablement sales leadership upon Our President's Chief Revenue Officer Al Goldstein is driving focus on both new logo acquisition and multi product cross sell within our existing base with the goal of transitioning our mix over time towards approximately 35% new logos and 65% base expansion. Our new bookings in our core Human Capital Management payroll continued at a strong pace in quarter one up 13% versus last year and our contracted backlog remains healthy at approximately 85.6 million. We expect to convert approximately 38% of that backlog over the next 12 months. Our client base, primarily small and mid sized businesses in payroll intensive compliance driven industries, remains resilient. We have not observed meaningful changes in sales cycle dynamics or competitive behavior in quarter one. I want to take a moment to reiterate our thoughts on AI and what it means for our business. Much of the disruption narrative applies to productivity and workflow software tools where AI can replicate or replace the core function of a software that the software performs. Payroll and HR compliance is not in that category. We move approximately $20 billion annually on behalf of our clients and to do so we hold money transmitter licenses in every state and requires them a regulatory infrastructure that takes years to build. It represents a significant barrier to entry. We interface directly with the irs, state and local tax agencies and banking institutions. Our clients carry seven or more years of employment history, complex multi jurisdictional tax obligations and real time compliance requirements where the margin of error is effectively zero. These are not functions that a generic AI layer can absorb. The regulatory complexity does not go away. In fact it compounds what makes it sure a system of record rather than a workflow tool is precisely this. We are embedded in the legal and financial infrastructure of our clients businesses. Switching costs are high, our revenue model is consumption based on headcount and payroll runs rather than a seat license and our client base is concentrated in the front line essential workforce, economy, plumbers, hotel workers, tradespeople. Those work is among the most resilient to automation. At the same time, we believe AI is a meaningful accelerator for us. Luna, our AI agent has been adopted by greater than 15% of potential users. Today, without any active marketing or onboarding from assure in quarter one, Luna interactions increased by nearly 50% over the prior quarter. To date we have transcribed, categorized and scored approximately 80,000 support calls for sentiment and our ticket mining capability analyzes more than 100,000 cases monthly. These numbers reflect AI working across both the client facing and operational sides of the business. Deflecting support volume, enabling employees and administrators to self serve across payroll benefits and compliance workflows, and driving continuous product and service improvements. The result is a smarter, faster and more responsive organization without reducing the compliance expertise and accountability our clients rely on us to provide. Our last call. We told you that Luna could perform over 50 actions, live audible and permission control. Since then we've proved the model at scale. Our Canadian tax solution is the clearest example. A fully automated Luna AI powered pipeline that converted a traditionally manual compliance workflow into a proactive continuous monitored system. Our more periodic checks, continuous coverage. That architecture is now a blueprint and we're systematically replacing it across U.S. payroll and U.S. tax and HR compliance. This is not a feature rollout. It is a platform wide operating models shift from reactive to proactive. From human check to AI verified, from process dependent to infrastructure driven. That same shift that makes assure works possible. We can now take on the work itself, not just deliver to software. Because the AI layer gives us the efficiency and the auditability to do it at scale without scaling headcount literally. Through Assure Central, every payroll specialist works from a unified action surface. Discrepancies, missing data, pending filings require approvals surface in real time, not buried in reports. Luna identifies what needs attention. Central delivers it to the right person at the right moment. Detection, notification, action closed loop. These capabilities compound every compliance workflow we automate strengthens our models across the entire client base. And when you're processing approximately $20 billion in payroll annually, that compounding effect and system wide intelligence is very meaningful. Internally, the same AI foundation is accelerating product development, sharpening sales intelligence and improving support operations. All of which we expect to continue to expand the margin profile over time. The result? Higher accuracy, greater efficiency and a structural lower cost to serve with human accountability preserved for every compliance sensitive decision. In short, we are a system of record business with compounding data gravity operating in a highly regulated compliance critical environment. This is an entirely different category than the SAS segments where disruption concerns are most valid. And we remain confident in both the durability of our model and the opportunity that AI creates for us going forward. With that, I'd like to turn the call over to John to discuss our quarter one financial results in more detail. And provide an Update on our 2026 guidance.
John Pence (Chief Financial Officer)
John thanks, Pat. As Patrick noted, several figures discussed today are on a non-GAAP or adjusted basis. Reconciliations are available in our meeting in our earnings release and our Investor [email protected] First quarter total revenues were 42.8 million compared to 34.9 million in Q1 2025, representing growth of 23% year over year. Recurring revenue for Q1 2026 was 37.8 million compared to 33.2 million in Q1 2025, an increase of over 14% year over year. Recurring Revenue represented approximately 88% of total revenue in the quarter. We believe that in 2026 recurring revenue as a percentage of total revenue will be in the low 90% range and we anticipate it will continue to Trend upwards. In 2027, professional services and hardware revenue was 5 million in Q1 2026 compared to 1.7 million in Q1 2025. The increase in non recurring revenue was primarily due to hardware sales from our Latham acquisition and professional services tied to enterprise tax float. Revenue was relatively flat in Q1 2026 compared to Q1 2025. We have modeled two additional rate cuts in 2026, which we anticipate will be partially offset by continued growth in client fund balances. Gross profit for Q1 2026 was 30.5 million compared to 24.6 million in Q1 of 2025. GAAP gross margin for Q1 2026 was 71% in line with Q1 of 2025. Non GAAP gross margin for Q 12026 was 76% compared to 75% in Q1 of 2025. Net income for Q1 2026 was 0.6 million compared to a net loss of 2.4 million in Q1 of 2025. EBITDA for Q1 2026 was $9.4 million compared to $4.1 million in Q1 of 2025. Adjusted EBITDA for Q1 2026 was $12.3 million compared to $7.3 million in Q1 of 2025, an increase of 69% year over year. Adjusted EBITDA margin for Q1 2026 was 29% compared to 21% in Q1 of 2025, an Increase of approximately 800 basis points points for the full year. We continue to expect to generate positive unlevered free cash flow in the mid to high teens range, which we calculate by taking adjusted EBITDA at the midpoint of our guidance range less software capitalization of approximately 15 to 1$6 million and approximately $6 million in cash interest cost. We ended the first quarter with cash and cash equivalents of $19.2 million and debt of $68.8 million as of March 31, 2026. Based on continued positive momentum in our business, we are updating our full year 2026 guidance and also providing Q2 guidance. It's important to keep in mind that the first quarters are seasonally strong as recurring year end W2 ACA revenue is recognized in this period. Full year 2026 guidance revenue of $159 million to $163 million and adjusted EBITDA margin of 23 to 25%, Q2 2026 guidance revenue of 3$6 million to 38 million and adjusted EBITDA of 6 to 8 million. Our cost structure including CapEx and capitalized RD is expected to remain relatively stable on a dollar basis.
Pat Geppel (Chairman and CEO)
With that, I'll turn the call back to Pat for closing remarks. Thanks John Quarter 12026 marks continued progress towards the inflection point we've been building toward with Assure Central now substantially adopted across our direct client base. Our Luna AI delivering measurable efficiency gains, AssureWorks getting early traction and our sales force growing towards 150 reps. We're executing on the plan we've been sharing with investors. We believe we are at an important inflection point in the business where growth and profitability are advancing together. This combination top line momentum, bottom line discipline at the same time is what we've been working toward and we're very pleased to be delivering on it. We remain on track toward our medium term target of 180 million to 200 million in revenues with adjusted EBITDA margins of 30% or better, a level we came within close range of during this quarter and in quarter four 2025 and our longer term vision which we have discussed with investors, reflects the potential for margins to expand well beyond 30% as we achieve scale. AI continues to reduce our costs to serve while simultaneously expanding our market and revenue opportunities. We're excited about 2026 and remain committed to delivering value to our shareholders, our clients and our stakeholders. Thank you for joining us today. And now I'll send the call back to the operator for the question and answer session. Operator thank you.
OPERATOR
We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that analysts limit themselves to one question and a follow up so that others have an opportunity to do so as well. One moment please, while we poll for questions. Our first question comes from Jeff Van Re with Craig Hallam Capital Group. Please proceed with your question.
Jeff Van Re (Analyst)
Great, thanks. Thanks for taking the questions. Pat. Just a couple quick ones for you on Assure Central. I'm curious, now that you're getting a little further into it, what are you observing with respect to the path of adoption as people get single sign on capabilities and are getting exposed to more product? Just kind of curious what the paths of adoption are looking like so far?
Pat Geppel (Chairman and CEO)
Yeah, really, really pleased. You know, attach rates were up about 15% year over year. People are really getting into the flow of it. And I think more important than that, it's one of the reasons why we also introduced AssureWorks. You know, the bigger story for us with small and medium sized businesses is we can go to a small business and say, you know, hey, we'll give you the tools to manage compliance end and across all products and human capital management or we can do the work for you. And because we have the proofpoint, Assure Central, where all the products are under a single pane of glass, the light bulbs are starting to go on. So I think we're early innings yet, but boy, we're really, really pleased. And then our acquisition of Latham, which we acquired in July, they're undergoing Assure Central and they'll be largely done in the second quarter here. So really, really pleased with our sales motion, our customer service motion. And you know, the other thing that's coming out which is interesting is the prompts or the trigger event. So if you get to 20 employees and you know, now by law you have to offer cobra, it's almost a no brainer to say, hey, do you want to. Sure. To manage that for you as opposed to, you know, try to introduce that somewhere else or if you're in a state that 401k is a regulatory requirement, you know, hey, we noticed you don't have any 401k deductions. Would you like us to help you with that plan? It's a real easy conversation. So we're just getting started, but those are some of the things that are popping out quickly.
Jeff Van Re (Analyst)
Yep, that's helpful. And in the deck you talk about the expanding pepm. Can you talk? I mean, I can see you're taking it from 15 and 2020 to $100 in 2026. But where, by your math are you at this point in terms of PEPM and any thoughts on, you know, 27, 28, trying to just get a sense I know what the potential is, but where are you and where do you think you can be?
Pat Geppel (Chairman and CEO)
Yeah, you know, what I would say right now is, you know, we have kind of an internal goal that we're shooting for two products to four products because we have a direct model and an indirect model, et cetera in the investor deck. We have 64% of our business in the small kind of mid business and it's a focus area for more and more products. We'll have a better kind of rpu. But you know, from an intentionality perspective, you know, we were kind of in the area, you know, 12 to $15 per employee per month. I think what you're going to see is a double here over the three years or so. And you're going to see, you know, I would say we're pretty optimistic right now, but you know, it is the first quarter. I think we'll have a better answer here when we get Latham in and probably on the second earnings call. But you know, I would be disappointed with the, that we don't do a double over the next, you know, two to three years here.
Jeff Van Re (Analyst)
Yeah, I mean you've certainly added an incredible amount of breadth to the products that over the last several years. So makes sense one, one last. Maybe for me on tax season impact, just what was the seasonal uplift in Q1 from tax season?
Pat Geppel (Chairman and CEO)
You know, are you talking W2s or are you talking float or, you know, no W2s. Sorry. You know, we were probably up in the area 300,000 or so on, you know, W2s and ACA, some of our employee count, they have a, you know, per employee per month (PEPM) environment where they. We don't bill separately for W2s but for the ones we bill separately, you know, it's about a 6% increase and I would say anecdotally float balances, you know, end of the quarter in double digit increase in float balances. Got it. Great. Okay, I'll leave it there. Thank you. Thanks, Jeff.
OPERATOR
Our next question comes from Joshua Riley with Needham and Company. Please proceed with your question.
Joshua Riley
Thank you for taking my questions here. I just wanted to start off on the last piece you were talking about there with the forms growth. The 7% organic growth is pretty impressive versus what, 3.5% the last couple years in the first quarter, how much of a headwind or a tailwind, I guess, was the forms growth in this March quarter versus the last couple years. Because I know it's been a headwind the last couple years and I know you just threw out the 6% number. What was that referencing exactly? Was that the forms growth for the quarter?
Pat Geppel (Chairman and CEO)
That was the forms growth. So really, Josh, there was no headwind in forms growth. Maybe it's 1%.
Joshua Riley
And in the prior two years there was somewhat more of a headwind. Is that the right way to think about it? The last of the headwinds in this year?
Pat Geppel (Chairman and CEO)
Yeah, if you think, you know, you had the, you know, the great resignation and then you had to have the great stay. You know, during a couple of those periods, turnover was really heavy, which would add more to W2s. And then when you stay there's a little bit less. So, you know, there was a headwind, you know, couple percentage points in that area.
Joshua Riley
Got it, thank you. And then on the lathe transition, the business model transition, how is that going? Because the hardware revenue was a little bit above my estimates here for the March quarter. And just curious, is that still on track with your expectations entering the year?
Pat Geppel (Chairman and CEO)
Yeah, I think so. I'm not sure that the hardware was that much up. I think we also had some pretty healthy professional services, Josh, with regard to some of the larger tax implementations. So I think from my perspective, Latham hardware is kind of in line with last year and nothing too crazy in terms of the integration and the plan. I would say we're going to be in earnest the back half of this year and into next converting to that Haas model. So early stages and we haven't started to see that transition, which will again obviously be really good for the, for the mix of revenue. Turn it in and recurring. But it'll put some pressure on the non recurring side. Right. So on the compares, we're going to be adding a lot more recurring revenue in the out couple quarters and you're going to see a decrease in non recurring. Again, good for the health of the business, but it'll be a little bit of a transition in terms of the mix. That's what we expect to happen kind of in the next, I would say 18 months, two years. Yeah. And Josh, I would say really, really pleased with the Latham acquisition overall. It was absolutely the right acquisition for us. Our customers love it. And you know, anecdotally the insult times and the coordination around multiproduct implementations has gone really, really well.
Joshua Riley
Last point for me is on the enterprise payroll tax deals.
Pat Geppel (Chairman and CEO)
Can you just give us. We've seen some kind of mixed feedback in the market about ERP migrations. How important is a cloud ERP migration for you or just any type of ERP migration for you to win business there? And can you still win some deals even if ERP migrations are in a period that's a little bit slower? Yeah. First of all, Josh and I hope you appreciate this. In addition to analysts and investors, we have people from Team Red on the call who is our primary competitor. So I can't go too much in detail like I used to be able to because they've noticed us. But anyway, what I'd like to talk about there is, first of all, the market for tax is really compelling. We have, we think we're, you know, miles ahead of the competition. I think we have a really good offering there and we're going to continue to grow in that area. As far as ERP migrations or implementations, first of all, we do, you know, a lot of times, you know, we are the tail, not the dog in the sense that when somebody goes to an Oracle or, you know, UKG or an SAP or a workday, what happens, you know, is we are the timing of some of those deals are when they do implement with erp. So, you know, sometimes that can lengthen a install center, but install cycle. But it absolutely, you know, actually it's the market right now for compliance tax services, especially with, you know, how we go about it with AI is very strong. And then. Thank you very much here, real quick, Josh, here. We're lucky to have them today. You know, I don't know if you want to comment on that, you know, please. Yeah, Josh. So we also have a really big opportunity, not only on the greenfield new ERP deployments, but also the current install base. And we're doing quite a bit of work within the current base and we've got such a long Runway there as well, so we're not seeing any impact from what might be happening with the broader group around ERP in general.
Joshua Riley
Thank you.
OPERATOR
Our next question comes from Brian Fergan with TD Cowan. Please proceed with your question.
Jared Levine
Hi, this is actually Jared Levine for Brian Tonight. To start, can you talk about your managed service offerings, the recent announcements there, what you see in terms of the revenue opportunity, including the PEPM uplift, specifically from those managed service offerings?
Pat Geppel (Chairman and CEO)
Yeah, I mean, first of all, AssureWorks. We're really excited about it. You know, the fact that, you know, we could do it all for them or a customer doesn't necessarily have to hire a full time, you know, either payroll or HR professional. And they can help us. You know, they can use us to help them. You know, forest from the trees. You know, we see an opportunity, about $50 or so per employee per month where, you know, we're doing the work for them. Now, some of that can change based on the size and scale of the customer and the breadth of what we're doing, but that's the kind of opportunity we see with AssureWorks. We have had this in motion for quite some time. We had one of our resellers kind of pilot the program and we since acquired that reseller and then we're rolling that model out to the all across the country. You know, I would say it's more of a 27, 28 initiative, but I do think you'll see, you know, somewhere around, you know, kind of 3 to 5 million in opportunity in this year's revenue. But over time, it's going to continue to grow and that's what's exciting for us. And, you know, not only that, but when you can go to a customer, they don't need to go to a Professional Employer Organization (PEO) or employee leasing to get all their kind of compliance and all their offering done where we can do it for them or the same software that we're doing it for them, they can use internally, we think that's a real compelling message. And even if we don't get the entire business, you know, we're going to get a good majority of the business. So many times we'll pitch that, if you will. And they say, well, you know, maybe we'll start with HR compliance and we'll start with benefits or we'll start with payroll tax and time. So, you know, we think we're just getting started. We had six people offering or selling it today. But, you know, clearly we've exposed the sales organization and we have a set of learning and development training going on to roll this out. So we're pretty bullish on this.
Jared Levine
Great. And then to follow up here in terms of the guidance. So it looks like you didn't pass through all of the quarterly revenue and adjusted ebitda. Beat anything to call out there. And just also want to confirm there was no kind of incremental M and A since the last earnings here.
Pat Geppel (Chairman and CEO)
Yep. No M and A since the last earnings. And again, we, we tried to kind of get you where we think you need to be for the rest of the year.
Jared Levine
Got it. Thank you.
Pat Geppel (Chairman and CEO)
Thank you.
OPERATOR
Our next question comes from Eric Martinezzi with Lake Street. Please Proceed with your question.
Eric Martinezzi
Yeah, I wanted to ask about the. When the Latham folks come on to Assure Central, will that entire base be viewed as kind of a multi product adoption customer base? In other words, should we see a spike in the percentage of customers when we have this same conversation?
Pat Geppel (Chairman and CEO)
Eric, what I would say it depends. We're, you know, in our business, what we do is we have some standalone channels. You know, we'll do a standalone tax channel, for example, where we partner with other payroll companies. We won't cross sell without their permission into those kind of companies that we have relationships with. And then what we do with Latham is, you know, we have some other payroll companies that use Latham and are partnered with them and, you know, we'll respect that the same way. But a large majority of the Latham customers, you know, will be in Assure Central. We're still going through kind of that forward, if you will, and those will all be available to cross sell, etc. It hasn't really slowed us down because we prioritize Assure Central and the upgrades with the customers that have already been sold with the cross sell of Latham products. So those customers are already on Assure Central. We'll just continue to adopt them through the second quarter and it will by no question add velocity to our cross sell approach and our attachment of those customers.
Eric Martinezzi
And then you talked about still on target for the 150 sales reps by the end of the year.
Pat Geppel (Chairman and CEO)
You finished out at 118, I believe at the end of 2025. Are we talking about kind of a linear progression on our way to 2026 or in other words, I guess a better way to ask the question is what's the sales headcount now? Yeah, we're, we're about 10 under where I really would like to be. And Ale's with me and he can comment, but you know, for us, we've been really choosing quality. If you think about where we're going with Assure Central and where we're going with the sure works. We're looking for people that really have a consultative sell versus let's say a product sale. And you know, maybe al, you could talk a little bit about some of the candidates and the in the flow there.
Al Goldstein (President and Chief Revenue Officer)
Yeah, yeah. So we've, you know, historically we've looked at more small business transactional sales professionals and that worked well for us where we had point solutions and we're really selling more, you know, payroll tax deals than anything else now that we're selling more of the broader product, a complete product. And especially with Assure Works. It's a much more consultative sell. It's a much more solution cell, much more disciplined around the sales process and needs analysis and demoing the product and the software, which we're really proud of these days. And so that just is a different caliber and profile of a sales professional. Now the good news is is the folks we're bringing in check all those boxes and they're actually ramping a lot quicker than historically what what reps were ramping at. But we're being more disciplined about who we're bringing in and we feel confident we'll get to that 150 by the end of the year.
Eric Martinezzi
Got it. Thanks for taking my question.
Pat Geppel (Chairman and CEO)
Thanks, Eric.
OPERATOR
Our next question comes from Richard Baltri with Roth Capital Partners. Please proceed with your question. Thanks.
Richard Baltri
When you talk about accelerating to double digit organic growth, can you talk to me about the pieces that get you there? You know, presumably some of it's the headcount, but how much of it's ARPU and maybe how much visibility do you have into that acceleration, whether it's in pipeline retention, retention rate changes, win rate changes, et cetera. Thanks.
Pat Geppel (Chairman and CEO)
Yeah, yeah, Rich, thank you. Definitely the attach rate numbers are really positive and we have pretty good retention on that. Candidly in the fourth quarter and first quarter we did a lot of professional services work and I would say that one time probably is the only thing that's noise in the numbers sometimes because you know, we have been a little one time heavy. Now that ultimately will be a very strong indicator for us. But short term, sometimes you have to grow over bigger compares on the one time. But what I would tell you is the arpu, the attach rate, the number of reps, the rollout of assure central, the rollout of assure works, assure pay, you know, we're right down the, you know, we're, we're early days, but I would tell you, you know, really good pipeline development, real good underpinning of the pipeline, real good focus on attach rates. You know, I can see from our deal alerts, you know, we've had a really exciting not only first quarter but second quarter. And I can see it just based on our hiring profile and our learning and development as people get up to speed. So, you know, we have pretty good visibility but you know, we're also want to be conservative in an environment that has a lot of global uncertainty. We for that matter really haven't pressed same store sales or we haven't pressed a ton of employment growth or interest rate increases. So what we have tried to do is be conservative in a forecast and hopefully we can upside and produce an outside income or outside goals in the second half.
Richard Baltri
And for a follow up, can you talk about the internal sort of use deployment of newer AI efficiency tools? How much do you feel that that can help you either hold the line on costs in some areas, maybe cut costs to sort of bolster your EBITDA growth, maybe in excess of what organic growth might otherwise argue?
Pat Geppel (Chairman and CEO)
Yeah, Rich, we're seeing it used all throughout the organization. I mean there's really not an area that's not started to investigate and start to deploy it. We're using it in the finance organization. Just basic stuff like doing variance analysis and helping on the forecasting. The operations team is using it to again interact with customers and make things more efficient in those interactions with the processing the payrolls, sales teams doing a lot of work with the front end of analyzing customers and getting a lot more effective and a lot more throughput. So I think we're seeing it throughout the organization and I think it's really, really early days. It's pretty interesting, but you're exactly right. I think it's going to help. I don't think we're going to necessarily want to exit a bunch of people, but what we're going to do is we're going to kind of change the profile of what they're doing. Right. So if somebody was more on the data entry side interacting with the customer, that's going to go away or that's going to be much more diminished. They're going to be much more involved with making that customer happy, trying to solve their problems. And that goes back to the assure works concept. We're really going to be a lot closer and tighter with the people we've got servicing the customers and less on the data manipulation side of the business. So I think we can do that and not really change the cost structure, add to the top line and ultimately you're right, it's going to fall through to the bottom on ebitda.
Al Goldstein (President and Chief Revenue Officer)
You know, maybe if you could talk about sales and marketing with AI. Yeah, yeah, Rich. So on the front end we're using it quite a bit as well. And you know, we're doing, we're doing a lot on the marketing side around content creation and, and around being able to put out much more thought leadership much quicker. That's helped quite a bit for us. And then on the sales side we're looking at quite a bit of tools. But what we've implemented already is some AI tools around the needs analysis and discovery and again, as we do more of these larger deals in that 20 to 100 space, we're doing much more quicker research. We're able to get output much quicker around certain company and maybe who they're competing with or their peers and help drive more of the front end of the sales process and making sure our reps are well versed and knowledgeable when they engage with the prospect as well as taking all of the data that they learn from an actual discovery or needs analysis and being able to put a pretty quick deliverable and output with all of our services tied to that and then the ROI and value from it. All of that now for us is done through different AI tools. It's helped speed up quite a bit of the process for us on the front end. And frankly now we're leaning into some more technology around the actual outbound motion that we have around the demand gen and we actually think that that'll have quite a big impact on how many people were able to reach and having really good bespoke conversations with thousands more companies than we would normally have. Leveraging more human motion around the business development side.
Pat Geppel (Chairman and CEO)
And then finally, Rich, you know, just operationally we quoted, you know, last quarter about 80,000 transactions that Aluna assisted with and over 100,000 this quarter. And you know, so that obviously helps us with scale. It helps the customer experience where they're changing their W4 withholding with Luna assisting and that. So I think what you're going to see is more velocity in the model, the financial model. I know in our long term model we had 40%. We believe over time we can achieve 50 and that's all AI assisted.
Richard Baltri
Got it, thanks.
OPERATOR
Our next question comes from Greg Gibbes with Northland Securities. Please proceed with your question.
Greg Gibbes
Hey, good afternoon Pat, John Ail, thanks for taking the questions. Could you discuss the pace of organic growth implied by your guidance through the balance of the year and maybe what your updated expectations perhaps are the same of R4 Professional Services and hardware on a go forward basis.
John Pence (Chief Financial Officer)
Yeah. So real quick, at the midpoint of the guide, I think it puts us at kind of roughly around 15% full year, year over year in terms of growth. I think it's going to be kind of split evenly. It'll be half and half between the organic and inorganic based on the guide. So I think they're obviously the upside, we don't have any acquisitions planned. So the upside to the, to the numbers would be on the organic side right now as we're sitting today.
Greg Gibbes
Yeah, sorry, go ahead, go Ahead.
John Pence (Chief Financial Officer)
And what was the second part? I'm sorry? Yeah, just professional services and hardware, considering it was a little higher than expected. But I know some of that is, you know, seasonal. Yeah, I think it'll normalize back down to we're going to be in that kind of high 90% recurring for the full year. I do think this, this quarter was a little heavy. Heavier than the rest of the quarters. Got it, got it. And you maybe beat me through this
Greg Gibbes
one a little bit, but just on the outlook for reseller acquisitions and you know, you mentioned nothing since the last earnings. Could you remind us on what's been done year to date and curious to hear your stance on incremental strategic platform acquisitions. Or is the focus right now just more integration, expanding the sales force and cross sell opportunities and then even the Latham model transition?
Pat Geppel (Chairman and CEO)
Yeah, just really quick. I really feel pretty good about the components of our solution. We've pointed in an area where, you know, we've strengthened the products around payroll and have done a really good job there. And then with the integration of sure Central, you know, the development of sure Pay, you know, we just announced the sure Works here, but we've been working on that for a quarter. I really think we got our product kind of set, if you will. Now to me it's attachment, attachment rates, arpu, revenue per unit. You know, we're really going to try to cross sell, etc. You know, as a reminder, you know, I thought Al did a wonderful job leading the sales organization. You know, historically we're close to 70% new logo. You know, now we're closer to 5050 and you know, we're not dropping down new logos. Right. So it really speaks to kind of broadening out the revenue. Now that being said, you know, we do have a reseller kind of network, if you will. And we'll continue to add that. You know, you see, and we, we publish some of the cost takeouts in that model. But also now that we have the products and services to cross sell and attach based on the reseller network, we think it's even more compelling to go that way. So I think you'll see a series of, you know, small acquisitions. I don't think you'll see anything major, but that'll be our focus here. That's helpful. Thank you.
John Pence (Chief Financial Officer)
Oh, and to answer your question, yeah. The only acquisition we talked about on the last earnings call was done kind of in the January time frame.
Greg Gibbes
That's right.
OPERATOR
Thank you. Our next question comes from Vincent Tolicio with Barrington Research. Please Proceed with your question.
Vincent Tolicio
Yeah, Pat, could you talk to the health of your client base? Is it expanding and are clients hiring in this environment? That's a great question, Vince. I would say in general it's, I think people are cautiously optimistic. I think, you know, in some cases, depending where you sit, you know, maybe oil prices is kind of swooped them a little bit or, you know, what have you. They're definitely see a very strong opportunity in the business environment. In some cases, you know, they have a stable employment workforce, which is great. They're trying to figure out, you know, kind of and separate. What they're seeing is good cash register versus, you know, if they listen to, you know, a war or, or listen to, you know, all the kind of news. Sometimes it's, it's a cause for pause. Right. And so I don't see employment growth growing a ton here. And some of it's just demographic, you know, where you have a little bit of an aging population, you have as many people retiring as coming into the workforce. But I would certainly, you know, I see a lot of opportunities. I think ale who's on the front line here would agree to that, I think. And you know, for me it's a very stable, thriving small business workplace. Thanks for that. And how should we think about the organic growth this quarter? Would you say it was broadly distributed across your core categories? Yeah, I'd say so. I think, you know, we're trying to get to a point where we described
Pat Geppel (Chairman and CEO)
a business and it's in the IR deck, there's a pie chart. I would say in general, most of the growth this quarter was probably on the HR ACM platform side of the business as opposed to enterprise tax. So that's the way I would think about it, Vince. I mean, I really think about that's, that's the kind of the buckets that we're trying to describe the business. And so that's where the majority of the growth was this quarter. And then as far as, you know, as far as through the year, I think attachment attach rates and RPU growth in small business is going to carry today. I think you're, you know, we've had some really good milestones of, you know, getting customers live and, and you know, we see good prospects in the tax business that continue to grow. You know, I think we have some professional services and hardware that in some cases will continue professional services as we implement. But as far as hardware, I think you'll see a moving of the mix from one time to reoccurring over a period of time but we'll still have some one time and then you know we have some non strategic businesses that you know will over time not be as focused but we'll continue to be with it. But really it sure works. Central sure pay. You know we're going to lean in there and then we're going to absolutely continue to grow our money movement and compliance offerings up and down the HR stack. Thanks guys.
Vincent Tolicio
Nice quarter. Thank you.
Pat Geppel (Chairman and CEO)
Thanks Vince.
OPERATOR
We have reached the end of our question and answer session. I would now like to turn the floor back over to Pat Kessel for closing comments.
Pat Geppel (Chairman and CEO)
Yeah. Hey, I appreciate each and every one of you from an investor perspective and an analyst. We have a great analyst community and they do a good job representing, you know, Assure Software. And then as far as if you've been an investor with us here a while, we'll continue to make progress. I think we're pretty consistent. You know we have the investor deck on the company website. I would say, you know, we've done some non deal roadshows and with Patrick coming on board, you know we're going to have some conferences here throughout the year and you know, definitely I'm coming to New York here soon on some investor conferences. So we look forward to meeting you and seeing you soon and we're very thankful for you and just keep following our progress because we're pretty confident in our growth. Thank you.
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