Asure Software Inc

NASDAQ:ASUR

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good afternoon, and welcome to Asure's Second Quarter 2024 Earnings Conference Call. Joining us today -- on today's call are Chairman and CEO, Pat Goepel; Chief Financial Officer, John Pence; and Vice President of Investor Relations, Patrick McKillop. [Operator Instructions]

I would now like to turn the call over to your host, Patrick McKillop, for introductory remarks. Please go ahead.

[Patrick McKillop, executive]

Thank you, operator. Good afternoon, everyone, and thank you for joining us for Asure's second quarter 2024 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.asuresoftware.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. A description and timing of these items along with the 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 our upcoming Investor Relations activities. On September 12, we will be hosting one-on-one meetings at the Barrington Fall Conference, which is being held virtually. Also, the team will have a member attending the Lake Street Conference in New York that same day. We are planning on some non-deal roadshows for September and October. Also in November, we are hosting one-on-one meetings at the Needham SaaS Conference, which is being held virtually. We anticipate more conference participation during the fall months based on last year's schedule and look forward to connecting with all of you soon. Investor outreach is very important to Asure, 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, and it will be made available for replay via a link available on the Investor Relations section of our website.

With that, I would now like to turn the call over to Pat Goepel, Chairman and CEO. Pat?

[Patrick Goepel, executive]

Thank you, Patrick, and welcome, everyone, to Asure Software's second quarter 2024 earnings results call. I am joined on this call by our CFO, John Pence, and we will provide a business update for our second quarter 2024 results as well as our outlook for the rest of 2024. Following our remarks, we will be available to answer your questions.

Our second quarter revenues were very solid, coming in at $28 million, and our reoccurring revenues were up 18% during the quarter, which is a nice improvement. Our revenues were driven by strong contributions from our Asure Marketplace offering, Payroll Tax Management and interest earned from funds held for clients, which we refer to as float. During Q2, we are pleased to see our organic growth rates increased to 7% from 3.5% during Q1, and we believe that we will deliver double-digit growth in the back half of 2024.

In 2023, you may recall, we raised money to make acquisitions, improve our technology, roll over ERTC revenues and deliver double-digit growth. We have executed this plan very well in the first half of 2024. We remain excited about the opportunities that lie ahead for our business and are very pleased with the continued momentum of our Payroll Tax Management business, as evidenced by the recent deal we announced with Vensure. Our deal with Vensure, the largest privately held organization in the HR technology and service sector, for our Payroll Tax Management solution will deliver comprehensive payroll tax management for PrismHR clients and Vensure's internal operation.

This is a significant win for our payroll tax solution. And coupled with the wins in the enterprise space with providers of Workday and SAP clients, we expect that over time, as this business grows, it will contribute to growing our float balances as well. Our pipeline for this solution remains robust, and we look forward to potentially announcing more deals in the future.

We have also recently formed a partnership with MyHRScreens, a premier provider of background screening services. This collaboration aims to expand access to a comprehensive background screening solutions for small and midsized businesses, facilitating a safer and more efficient hiring process.

Additionally, in July, we acquired an applicant tracking system technology company, which enhances Asure's product suite for small and medium-sized businesses. This highly rated applicant tracking system features an automated, simple, all-in-one hiring tool, which includes services such as job ad writing powered by AI, automated interview scheduling and auto submission to major job posting sites. The technology has good growth and creates a very good cross-sell opportunity for us, plus it is complementary to our existing HR Compliance solution.

Our portfolio of products and partnerships continues to grow in addition to others previously announced like HRlogics for tax credit and proactive health management program for health management tools and services. These partnerships are great additions that really enable Asure to offer more solutions in addition to our payroll processing for small and medium-sized businesses. Our sales teams now have a broader product offering in their arsenal to help win new business as well as upsell existing clients.

Strategic sales initiatives such as bundling our payroll services with our 401(k) offering allow us to continue to win new clients, and they continue to see positive results. The need for small businesses to offer 401(k) plans is driven by many states mandating such plans as there is funding available to small businesses to set up these plans through tax credits from the SECURE 2.0 Act from the U.S. government. Asure has the expertise to help small businesses navigate this process successfully.

Our sales efforts during the second quarter resulted in a 131% increase in new bookings versus the prior year. We continue to work on expanding our sales force headcount, which we are projecting to go to about 130 reps by year-end 2024. Also, we continue to make use of digital marketing efforts to support the sales team with sales leads and help increase productivity.

Based on our current business trends, we're updating our full year 2024 revenue guide to a range of $123 million to $129 million, and we still expect adjusted EBITDA margins of between 20% and 21%. The forward guidance range of 2024 is a result of variability of timing of closing and implementing both large enterprise arrangements and anticipated acquisition. Our guidance in 2024 implies a very healthy double-digit growth rate if we exclude ERTC from 2023 revenues for comparison.

Now I'd like to hand it off to John to discuss our financial results in more detail as well as our quarter 3 guidance. John?

[John Pence, executive]

Thanks, Pat. As Patrick mentioned at the beginning of this call, several of the financial figures discussed today are given on a non-GAAP or adjusted basis. You will find a description of these GAAP to non-GAAP reconciliations in the earnings release that was made available earlier today. The reconciliations themselves are included in our most recent investor presentation posted in the Investor Relations section of our website at investor.asuresoftware.com.

Now on to the second quarter results. Second quarter revenues were $28 million, down $2.4 million or 8% year-over-year, owing to a $6.5 million reduction in ERTC revenue. However, excluding ERTC, total revenues were up 18% from prior year. Recurring revenues for the second quarter grew 18% versus the prior year to $27.1 million. Recurring revenues accounted for 96% of our total revenues in the quarter. Second quarter recurring revenues grew on the strength of increased revenue from our Payroll Tax Management solutions and increased float revenues with an average client balance of approximately $220 million throughout the quarter, combined with revenues from new customers obtained through acquisitions.

Net loss for the second quarter was $4.4 million versus a net loss of $3.8 million during the prior year. Gross margins for the second quarter decreased to 67% from 72% in the prior year. Non-GAAP gross margins in the second quarter decreased to 73% from 77% in the prior year. The decrease in gross margins for the second quarter is primarily attributable to the decrease in total revenue. We continue to believe there is substantial margin upside over the longer term as the business scales.

EBITDA for the second quarter was $1.3 million, down from $3.3 million in the prior year. Adjusted EBITDA for the second quarter decreased to $4.1 million from $6.1 million in the prior year, consistent with the decrease in revenues. And our adjusted EBITDA margin was 15% in the quarter compared with 20% in the prior year. We ended the second quarter with cash and cash equivalents of $21 million, and we have debt of $6 million.

Now in terms of guidance for the third quarter of 2024, we are guiding third quarter revenues to be in the range of $30 million to $33 million. And adjusted EBITDA for the third quarter is anticipated to be between $6 million and $7 million. We are updating our 2024 guidance to be in the range of $123 million to $129 million with full year adjusted EBITDA margins of between 20% to 21%. As Pat mentioned in his comments earlier, the expanded guidance range figures for 2024 is the result of variability in the timing of closing, recognition of revenue from and implementing both large enterprise arrangements and anticipated acquisitions into our organization.

Organic growth improved nicely from 3.5% in Q1 to 7% in Q2, and we expect to deliver double digits in the back half of this year. We feel good about how we have executed our acquisition strategy with $15 million in annual recurring revenue being acquired so far over the last 10 months. And the average prices being paid has been consistent with our model, coming in at between 2x and 3x revenues. We continue to assume a combination of organic and inorganic growth in our current year guidance.

The outlook for the core products, we believe, remains robust, as evidenced by the strong increases in recurring revenue in the last 2 quarters. Our recurring revenue as a percentage of revenue this quarter was 96% versus 75% in last year's second quarter, which is very impressive improvement as we are replacing onetime ERTC revenue with high-value recurring revenue.

In conclusion, we are optimistic about the remainder of 2024. We believe we have executed well against our plans as we move past ERTC. The ERTC headwinds will die down as we go through the back half of 2024 and enter 2025. Our focus remains on growing the business and delivering compelling solutions to our customers.

With that, I will turn the call back to Pat for closing remarks.

[Patrick Goepel, executive]

Thanks, John. We are pleased to have delivered solid results in the second quarter of 2024. Our second quarter was very active with our recurring revenues growing 18% year-over-year plus the combination of completing acquisitions and launching more products as we build Asure to be in a strong position for future success. Our focus on growing the business, improving our technology and offering more products will be a continuous effort, and we feel that we have made excellent progress in the first half of 2024.

Over the last few quarters, we've announced multiple partnerships to be able to offer more valuable services to our clients in addition to our payroll services. Small and medium-sized business owners need assistance with more than just payroll. Our ability to offer products to help them uncover tax credits that they may be eligible for, proactive health management programs, which again aid in lowering health care premiums.

MyHRScreens, for example, which can aid them in performing preemployment background check, and an applicant tracking technology to aid them in their hiring practices are all very important tools that these business owners need to succeed. Our HR Compliance offering is another example where we can help small business owners navigate all the complex laws regarding employment such as minimum wage laws, which have grown exponentially over the years. Harassment training and family leave act are also difficult for small business owners to manage.

The growth of Asure Marketplace is expected to continue, and our recent momentum with Payroll Tax Management has also a great potential, as evidenced by our recent deal with Vensure. The pipeline for Payroll Tax Management is robust, and we believe we will potentially announce more deals in the future.

In summary, we're very pleased to have delivered another solid performance in Q2 against the backdrop of some unfavorable year-over-year comparisons due to ERTC. We believe we're executing extremely well on the plan we have laid out previously, which have included raising capital to make acquisitions, improve our technology and grow double digits, and we've done exactly that.

Over the last 10 months, we've made 9 acquisitions, which bring in approximately $15 million in annual reoccurring revenue, improved our technology with the recent launch of best-in-class employee self-service, role-based identity access and more. Our recurring revenues grew at double-digit rate of 18% in this quarter, and we believe that there will be more double-digit growth in the future. Recurring revenue as percentage of our revenues has increased from 75% in last year's second quarter to 96% in this quarter, which is a very impressive stat as we're replacing onetime ERTC revenue with more valuable reoccurring revenue.

Our backlog balances have more than doubled versus last year as we continue to bring on new clients, both large and small. We look forward to providing more detail on our 2025 outlook when we issued guidance during our next earnings release in November. The headwinds from ERTC are now starting to dissipate, and we look forward to the remainder of 2024 and continue to deliver positive results. We will continue to provide innovative human capital management solutions that help small businesses thrive, human capital management providers grow their base and large enterprises streamline tax compliance.

Thank you for listening to our prepared remarks. So with that, I'll send the call back to the operator for the question-and-answer session. Operator?

[Operator]

[Operator Instructions] Our first question comes from Joshua Reilly with Needham & Company.

[Joshua Reilly, analyst]

Nice job on the quarter here. So maybe just starting off, if we look at the wider range of guidance for 2024 revenue, can we just review your thoughts on what's different this quarter versus the prior quarter, whether it's changed assumptions around M&A, float income or the macro? And what is this comment around timing of large enterprise deals? I assume that refers to some payroll tax opportunities.

[Patrick Goepel, executive]

Yes, Josh, thanks for the question. First of all, John Pence, myself and Eyal Goldstein, our President, are available for questions. But just on that, Josh, first of all, we feel really good about what we did in the first half of the year. As we look in the second half, and primarily, it's around the enterprise deals and tax, we won a bunch. And some of them have phased installs. Some of them have start dates that could push a month or a quarter, so lining those up sometimes are difficult. And then we've had -- even in the second quarter, we had a large successful deal that started a month later.

So when we're looking at that, we just want to give ourselves enough flexibility. It's not a question of if. It's a question of when. And we feel really good about sales, really good about the backlog. We just want to make sure we land -- we stick to landing on some of these enterprise deals that are relatively new to us.

And I'll give you some color. We won a large manufacturing company, 30,000 employees, et cetera, and it was full start in January. It's probably going to start here on August 1st. That's one example. Another one, we have a new partnership with one of the enterprise ERP systems, and it's over 250,000 employees. And it's supposed to start the back half of the year, could have slipped to January. It's not a question that's selling it. It's a question of installing it.

So for those reasons and then even acquisitions by nature, sometimes it's when you convert some of the revenue in some phases. So again, it's not a question of if. It's a question of when. We want to make sure we give ourselves some flexibility. And I would say what's different than last quarter, not much and just that we continue to execute on the plan.

[Joshua Reilly, analyst]

Got it. And if you look at that $15 million in ARR now that you've acquired, I guess that's in the last 12 months versus year-to-date. Is that consistent with what you would have expected entering the year? And does that -- is the amount of revenue you're actually going to recognize from those acquisitions in the current calendar year pretty consistent with what you expected entering the year?

[John Pence, executive]

Yes, I think so. And just to be clear, that's 10 months. So it's kind of October of last year through July or through yesterday. So it gives you some sense as to the timing. And yes, it is pretty consistent with what we were expecting. And we've still got some more, I think, in the pipeline that we're hoping to close in the next few months. But yes, it's pretty consistent with what we were hoping for, if not a little bit more.

[Operator]

Our next question comes from Bryan Bergin with TD Cowen.

[Jared Levine, analyst]

This is Jared on for Bryan. I was just wondering if you could comment on the demand environment relative to prior quarters, maybe compare across your offerings or how the top-of-funnel activity is looking year-over-year.

[Patrick Goepel, executive]

Yes. No, I appreciate it. I think demand environment is very strong, both on the small business marketplace as well as some of the tax opportunities, et cetera. I might get Eyal into the conversation here. Eyal, do you want to talk a little bit about the sales demand environment?

[Eyal Goldstein, executive]

Sure. So yes, Jared, we're seeing consistent strong demand across the business. Small business, both in our direct and our reseller channel, continues to be really strong. In fact, we've seen an uptick in new payroll customers that we're bringing on. So that's really healthy. Our tax business that Pat has been mentioning and John's been mentioning is -- we're seeing much higher increased activity there. And so I would say that one has gone up significantly from a pipeline perspective. But overall, very strong and across all the different businesses.

[Operator]

Our next question comes from Eric Martinuzzi with Lake Street Capital.

[Eric Martinuzzi, analyst]

Looking for a little more color on the applicant tracking company that you acquired in July. Just what did we pay for that? So kind of what would the pro forma cash balance be for the month ending July? And then what could we expect to revenue contribution there?

[John Pence, executive]

Yes. I mean I think we're going to talk about kind of acquisitions in aggregate. I believe there is some subsequent event disclosure in the Q on that one just in terms of -- because just of the size and the materiality of it. But in general, really obviously, don't want to talk about third quarter since we're just talking about second quarter right now. But I think you can get some color with respect to the purchase price on that one. And again, we want to try to talk about the acquisitions in aggregate just because we've got some that are -- lots of different multiples, lots of different structures, but I'm trying to give some sense as the relative size of the overall portfolio of acquisitions.

[Patrick Goepel, executive]

And then just on the applicant tracking company. First of all, we were attracted to that business. It's a technology that we didn't have in-house. We feel it's an easy -- we go to market with 3 value propositions, basically access to capital, compliance and access to people. We've been looking for the right company, and the culture around that is really strong. We're not telegraphing the name of that quite yet just as we're in the process of working through all the client notifications, et cetera.

But feel really good about the business scalability of it. And then we also think there's a tremendous opportunity to cross-sell because as we look at our small business owners, what they need is access to people. We allow for kind of personalized websites around the people, job board integration, et cetera. We think this will be an area of business that will double here in a very short order. And so we feel really good about that. Any other thoughts or follow-ups, Eric?

[Eric Martinuzzi, analyst]

Yes, separate topic here. You talked about the good pipeline here and some large enterprise arrangements that may slip a little bit to the right. But what about the installed base, specifically the churn of your existing customers in Q2 versus prior quarters?

[Patrick Goepel, executive]

Yes. All in, we're about 90% or 91% on retention. That's pretty consistent with where we've been. So we don't feel good about that. As far as kind of the customer base buying, we're somewhere around a 50-50 split. In some quarters, we've been as high as 70% new logos, 30% base sales. So obviously, the cross-sell demand is pretty strong. And some of it is just we're coming out with more and more products as technology -- we improve the technology and go to market with more products. So it's -- happy customers buy more, and we feel like we're in a pretty good shape here as we enter into the second half.

[Operator]

Our next question comes from Jeff Van Rhee with Craig Hallum Capital Group.

[Jeff Van Rhee, analyst]

So a couple for me. Just on the acquisition front, first of all, applicant tracking bringing in some incremental capabilities looks like a nice fit. In terms of the pipeline and what you look at acquiring the rest of the year, is it predominantly resellers? Or are you seeing other technologies? Just kind of the mix of acquisitions to come.

[Patrick Goepel, executive]

Yes, almost all will be resellers. We have one -- kind of one more product capability at some point in time here. But if I were to look at the rest of the year, I think the resellers will probably be more dominant.

[Jeff Van Rhee, analyst]

Okay. And then on the acquisitions, not to split hairs here, but the 10-month time line, I mean, the way we built the model, at least for us, you're, call it, 7 months in on a 7-month period. Where are you on the 10 to 15? Are we talking like $12 million? Or can you dial it in a little closer?

[John Pence, executive]

Yes. I think it's about right. I think there was 3 or so we did in the fourth quarter of last year. So I think that's fair. But again, I'm trying to -- it gets a little hard to parse this because when you think about -- we did give organic versus inorganic growth stats for second quarter. So I think it was 7 organic, 11 inorganic. And then again, in our guide for the third and fourth, we're pretty consistent in terms of our messaging here. I think it's going to be a similar type of complement of both organic and inorganic in the third and fourth quarter. So just trying to give directions. I mean it's hard to kind of nail these things to the percentage. But I think directionally, that's what you'll see for the balance of the year, too.

[Patrick Goepel, executive]

Yes, Jeff, maybe -- and John and I were talking about it ahead of the call. But we did 18% or so third quarter to low and the high imply a 23% year-over-year improvement to a 35%. Fourth quarter, if -- the guide implies a 32% to 44% on the low and the high. And I would say we're right on pace on acquisitions. The turn from ERTC to organic growth, as expected, it might be 1% or 2% lower coming out of the gate, but we feel really good about where we are. And then the backlog is more than doubled. So as we slot that in, the organic growth would definitely be over double digits here. So our plan is going pretty close to expected.

[Jeff Van Rhee, analyst]

Yes. Okay. Helpful. And then 2 last quick ones, if I could sneak them in. John, on the W-2 revenue, can you just remind me what that was in Q1? And then second, around the rev rec for the Vensure deal. Just as an example, what would a deal like that -- how would that play out from a rev rec standpoint? Are we talking falls in one quarter period, like ratable over time? Just refresh me on how the deals like that -- because they tend to be larger, obviously, how is that going to play in rev rec?

[John Pence, executive]

Yes. At a high level, it's a multiyear deal. There's some upfront cash component. But what will happen is, despite the upfront cash, we'll amortize some of that upfront cash payment over the life of the agreement. So it gets more blended in even though the cash flows might not exactly match up. So we get some cash upfront. That then ultimately amortizes in as we provide the service. To your question on W-2s, for the first quarter, it's about $5 million.

[Operator]

Our next question comes from Vincent Colicchio with Barrington Research.

[Vincent Colicchio, analyst]

Yes. Pat, the bookings growth number you cited, was that adjusted for ERTC bookings in the year ago period?

[John Pence, executive]

It was. The other thing, I guess, we got to be clear to -- back to that comment that Jeff just had, there is some kind of onetime money in that, that will get amortized into revenue. But we still have to pay commissions on the fact that the cash is coming in earlier. So anyway, so it's a number that has both recurring as well as some onetime revenue in it, but it does have the ERTC out to answer your question best.

[Vincent Colicchio, analyst]

And then a macro question. So if you look at your client base, are they expanding at a healthy clip, a modest clip or not at all?

[Patrick Goepel, executive]

On the client base, and I'll let Eyal answer a couple of questions here. But on the client base in general, I think the client headcount, if you will, is about flat. So we're not seeing appreciable growth. There's still more jobs in people, especially in the areas of, let's say, the trade organizations and restaurants and stuff like that. What we are seeing though is cross-sell opportunities. And some of it's our capability, and some of it's the client buying patterns that they want to buy more. Eyal, anything else on your end?

[Eyal Goldstein, executive]

Yes. I would just say another big thing we're seeing, especially with the acquisition of the recruiting piece, is customers are looking for ways to find more employees. So there definitely are open positions. They're looking to grow. It's not massive like what it was, but there is a need to find good candidates and a healthy amount of candidates across our customer base right now.

[Operator]

Our next question is from Greg Gibas with Northland Securities.

[Gregory Gibas, analyst]

Regarding the doubling of your backlog year-over-year, great to see that. Wanted to kind of dive in a little deeper on kind of the drivers there. Would you say it's mostly just improving demand for products? Would you say there's kind of better go-to-market approach? And is there any impact just from longer implementation or time to deploy for some of your larger enterprise-type clients?

[Patrick Goepel, executive]

Yes, Greg. I think that's a thoughtful question. And I think, first of all, on tax, we're winning more in the enterprise space, which is very positive. Some of these pursuits are longer-term deals, too. And so for example, something like 37% as a backlog is in the year kind of, if you will, revenue. And then you have multiyear deals as well. So some of it is a little bit of a demand environment based on newer products that we're offering and being very aggressive. We have integration opportunities that we previously announced with Workday and SAP. And we have another one here that we haven't announced yet that you'll recognize that name as well as an integration opportunity. So we're pretty excited about that. That's driving some of the backlog.

And then some of the things that we've talked about on other conference calls, 401(k) and the integration of payroll, that's happening right now. Some of it is because some of these products are relatively new. Book-to-bill is probably longer than I would like at this point in time. And in fact, we're on some calls today even that we're driving those book-to-bill numbers down in the second half and next year. And some of it is just we're brand new in offering some of these services. So there's a little combination of book-to-bill elongating a bit in some of the new products, but the bulk of it is really tax filing and our presence in the enterprise marketplace that's driving it.

[Gregory Gibas, analyst]

Great. That's helpful, Pat. And if I could just clarify, too, on your comments on kind of organic growth in the back half. I guess what's implied in guidance? Did you kind of say that roughly equal contributions from organic versus growth from acquisition?

[John Pence, executive]

Yes, that's what -- I mean to say that it's been kind of our consistent message. It's hard to predict exactly. It's going to be 50-50, but it will be a healthy combination of both.

[Patrick Goepel, executive]

Yes. And Greg, what I would say just in general, all along, if you think about it, we had onetime revenue last year kind of attributed to ERTC. When we built the plan, the big theme here was we're replacing repetitive revenue -- or excuse me, replacing non-repetitive revenue with repetitive revenue. The first quarter, we had about 3.5% organic growth. This quarter, now it's 7%. But if you look at what we started, let's say, in May and June and even July, we had a really good -- payroll units were at a very strong July.

So the organic engine is building momentum. I mentioned the low end guidance of 23% in third quarter, fourth quarter between 32% and 44%. We kind of did an implied guidance of half of it being organic, half of it being inorganic. We won't get it all perfect, but you could see it's an accelerating business story. And that's really, to me, the story that I want investors and yourself to take away from.

[Operator]

Our next question is from Robert Galvin with Stifel.

[Robert Galvin, analyst]

This is Rob on for Brad. I was wondering if the updated FY '24 guide factors in any assumptions on rate cuts in the back half of the year for the float interest or if this assumes rates remain consistent to that?

[John Pence, executive]

Yes. We priced in -- we have our long-term portfolio managed by Goldman Sachs. And so we had a call with them. I guess it was last week, ahead of our Board meeting. And we do that quarterly. When we kind of took their advice, what they're predicting is kind of a quarter in September and a quarter in December. So we kind of ran that through our model, and that's kind of implicit in the guide. So it's not a huge impact to us, but we did factor in 2 cuts and 1 in September and 1 in December.

[Operator]

[Operator Instructions] There are no further questions. At this time, I'd like to turn the call back over to management for closing comments.

[Patrick Goepel, executive]

Yes. And I won't speak too long here, but pack up a little here. I really feel good about the momentum of the business. I think we were thinking about last year in the third, fourth quarter, and how we've grown past ERTC and some questions around that. We've outlined a plan and we've executed to the plan. We feel really good about that. In some cases, we're even ahead of plan and ahead of the sales adoption as we get the book-to-bill, the increasing level of growth. We start to lap compares. We think that will pop out. We have 2025 guidance coming up. We'll do that as usual in the November call. But we're a company on the move. We appreciate your interest and appreciate you taking time today.

[Operator]

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.