Summary
Asure finished fiscal 2021 with accelerating fourth-quarter growth. Revenue for the quarter ended December 31, 2021 was $21.11 million, up 28.5% from the prior-year quarter. Full-year revenue reached $76.06 million, up 16.1%. Gross profit for the quarter was $13.26 million, up 35.2%, and gross margin improved to 62.8%, up 3.1 percentage points. For the full year, gross profit was $46.56 million, up 22.2%, with gross margin of 61.2%, up 3.1 percentage points. The revenue mix remains heavily recurring, though management notes that professional services, hardware, and other revenue grew faster than the core recurring base.
Profitability improved but remained negative on a GAAP basis in the quarter. Operating loss was $3.10 million, and operating margin was -14.7%, up 17.5 percentage points from the prior-year quarter. For the full year, operating loss was $12.81 million, compared with a larger loss in 2020, and operating margin was -16.8%, up 5.9 percentage points. Net loss for the quarter was $4.30 million, narrower than the prior-year quarter. Full-year net income was $3.19 million, a swing to profit from a prior-year net loss. Diluted earnings per share for the full year was $0.16, up from a loss per share in 2020. The full-year profit included a large employee retention tax credit and a gain from Paycheck Protection Program loan forgiveness, both of which management highlights in the annual report. Those items supported net income even as operating expenses remained high.
Cash generation was uneven. Operating cash flow in the fourth quarter was $2.52 million, up from a slightly negative prior-year quarter. For the full year, operating cash flow was $1.38 million, down 38.3% from the prior year. Contract indicators softened. Deferred revenue at December 31, 2021 was $3.75 million, down 15.1% from a year earlier. Remaining performance obligations were $23.71 million, down 24.7% from the prior-year quarter. Those declines suggest slower bookings or a different billing cadence, and they are a caution for future revenue visibility. Management notes that deferred revenue varies with seasonality, multi-year contract expirations, and deals billed after implementation, so the figure can move around. Still, a drop in both deferred revenue and RPO is not a sign of accelerating backlog.
Operational highlights show Asure is still building scale. As of December 31, 2021, the company had more than 80,000 clients, split between approximately 15,000 direct clients and 65,000 indirect clients who work with Reseller Partners. During 2021, Asure acquired two payroll businesses and integrated with Employee Navigator, which keeps employee data in sync with its payroll system when employees choose a different insurance carrier. It also helped small business clients file for employee retention tax credits. Management describes the company as a human capital management provider for small and medium-sized businesses, with a focus on less densely populated U.S. metropolitan cities.
Management's outlook calls for revenue growth as it introduces new applications, expands its client base, and renews and expands relationships with existing clients. It also plans to keep investing in sales and marketing and research and development to drive that growth, which could pressure net income in the near term. Seasonality matters: first-quarter revenue and margins are generally higher because of annual payroll form filings, including W-2 and ACA reporting. Fourth-quarter revenue can also benefit from unscheduled payroll runs before year-end.
Risks center on the pandemic and client headcount. Because Asure charges on a per-employee basis for some services, lower employment levels at clients hurt recurring revenue during 2020, and management says the pandemic and its variants continue to create uncertainty. Remote sales have allowed salespeople to meet more prospects virtually, but if clients are unwilling to engage by video or phone, sales cycles could lengthen. The company also warns that it may need additional capital for operations or acquisitions, and that future business demands could lead to cash use above recent levels. Deferred revenue and RPO declines add another layer of uncertainty. For now, the fourth quarter showed solid top-line growth and better margins, but the full-year operating loss and soft backlog metrics keep the story mixed.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $21.1M | $18.0M | +17.4% | $16.4M | +28.5% |
| Gross profit | $13.3M | $10.9M | +22.0% | $9.8M | +35.0% |
| Gross margin | 62.8% | 60.4% | +2.4 pp | 59.8% | +3.0 pp |
| Research & development | $1.4M | $1.5M | -4.5% | $1.6M | -10.3% |
| Sales & marketing | $4.3M | $3.9M | +10.8% | $26.4M | -83.7% |
| General & administrative | $7.2M | $7.0M | +3.4% | — | — |
| Total operating expenses | $16.4M | $14.9M | +9.5% | $12.9M | +27.1% |
| Operating income (loss) | -$3.1M | -$4.1M | +23.9% | -$3.0M | -1.8% |
| Operating margin | -14.7% | -22.6% | +8.0 pp | -18.5% | +3.8 pp |
| Net income (loss) | -$4.3M | $5.3M | -180.7% | -$5.8M | +26.3% |
| Net margin | -20.4% | 29.6% | -50.0 pp | -35.5% | +15.2 pp |
| Diluted EPS | -$0.22 | $0.28 | -$0.50 | -$0.37 | +$0.15 |
Risks
COVID-19 and related restrictions continue to pressure client headcount and payroll spend, which reduces per-employee recurring revenue. MD&A states lower employment levels among clients continued to negatively impact recurring revenues in 2021, though at lesser levels than 2020, and expects net income to be negatively affected by the pandemic and increased sales and R&D investment.
FY2021 net income of $3.2 million included non-recurring benefits, including an $8.7 million Paycheck Protection Program loan and interest forgiveness and a $10.5 million Employee Retention Tax Credit, while accumulated deficit was $266.8 million at December 31, 2021. Sustainable profitability may depend on replacing these one-time items.
The company acquired two payroll businesses in 2021, partially funded by a new $50.0 million credit facility, and plans to continue acquiring Reseller Partners. Integration risks include unknown liabilities, loss of acquired deferred revenue, diversion of management, and potential impairment of acquired assets.
The company disclosed significant turnover in its finance and accounting team over the last year, including executive, tax, SEC reporting, treasury and audit functions, resulting in a lack of institutional knowledge. Continued turnover or failure to integrate replacements could impair financial reporting and internal controls.
The company signed a $50.0 million credit facility with Structural Capital Investments III LP and had $20.0 million available for borrowing at December 31, 2021. Restrictive covenants limit dividends, require financial maintenance and liquidity tests, and default could accelerate indebtedness.
Cash and cash equivalents were $13.4 million at December 31, 2021 and $28.6 million at December 31, 2020, and net cash used in financing activities was $90.7 million for the year ended December 31, 2021. The company may need to raise additional capital on unfavorable terms or at all.
The company relies on banks and third-party ACH processors to execute payroll, benefit and tax transfers, and on third-party data center and cloud providers including Amazon Web Services. Failure, termination, or capacity limits at these providers could disrupt client payroll processing and harm liquidity and results.
The company faces evolving money transmitter, money service business, wage and hour, tax, privacy and biometric data regulations, including CCPA, CPRA, IBIPA, GDPR, and new Virginia and Colorado privacy laws. Noncompliance could require licensing, product changes, fines, or limitations on money movement and data processing.
Asure invests funds held for clients in marketable securities, money markets and cash equivalents, which are subject to market, interest rate, credit and liquidity risk. Loss or inability to access client funds could require additional liquidity and materially affect financial condition.
Goodwill and identifiable intangible assets together accounted for approximately 38% of total assets at December 31, 2021. Future acquisitions or adverse conditions could require impairment charges that materially affect operating results.
Deferred revenue (current portion) was down 15.1% at $3.75 million and remaining performance obligations were down 24.7% at $23.71 million in FY2021 Q4 versus FY2020 Q4. These declines could indicate reduced backlog or near-term revenue visibility.
SaaS KPIs
All quarters →Direct Clients
Indirect Clients
Total Clients
Summary, forecast, risks and KPIs are extracted from ASURE SOFTWARE INC's SEC filings for Q4 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.