Good afternoon, and welcome to Asure's third quarter 2026 earnings conference call. Joining us for today's call are Chairman and CEO Pat Goepel, 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 McKillop for introductory remarks. Please go ahead, sir. Thank you.
Thank you, operator. Good afternoon, everyone, and thank you for joining us for Asure's third 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.asuresoftware.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 in understanding our business, and exclude the impact of certain items. A description and timing of these items, along with a reconciliation of non-GAAP measures to the 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 wanted to take a moment to remind people of some upcoming investor relations activities. On November 17th, we will participate in the Craig-Hallum Alpha Select Conference in New York. On November 18th, we will attend the Stephens Annual Investment Conference in Nashville, Tennessee, as well as the Roth Conference in New York. On November 19th, we will participate in the seventh annual Needham Virtual Tech Conference. Finally, on December 16th, we will attend the Northland Capital Markets Virtual Growth Conference.
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?
Thank you, Patrick, and welcome everyone to Asure's third-quarter 2026 earnings result call. I am joined on this call by our CFO, John Pence, and we will provide a business update for third quarter 2026 results, as well as our updated outlook for the remainder of the year. Our third quarter revenues came in at $40 million, representing a growth of 10% compared to the third quarter of 2025. Growth was strong and broad-based with payroll benefits and HR compliance among the key contributors. We are reaping the benefits of the investments we have made in the business over the last few years. Our organic growth rate for third quarter 2026 was 9%, compared with 4% in the third quarter of 2025, an increase of 500 basis points, and up 5% in the second quarter of 2026.
Organic recurring revenue growth for the third quarter was 14%, which is a continued acceleration driven by the launch of AsureCentral a year ago and continued Payroll Tax Management momentum. The positive feedback for our products continues to grow, and this is supported by our recent G2 awards announced this fall, where we were rated a high performer in several categories, as well as a momentum leader and a leader in the small business segment. Building on the 9% organic growth and the 14% recurring organic growth we delivered this quarter, we continue to intensely focus on driving double-digit organic growth in the future and increase cross-sell activities while continuing to grow the embedded tax business. During the third quarter, we meaningfully expanded the distribution of our Payroll Tax Management solution, which already represents nearly 20% of Asure's revenue.
In August, we announced a co-selling arrangement for our Payroll Tax Management solution on the AWS Marketplace, and we began to actively co-sell into its 330,000 customers in September. AWS customers can procure Asure through the existing purchasing processes, including unused AWS spend, and our sales team co-sells alongside AWS sales teams against our ideal customer profile. Streamlining contracting and private offers can shorten the typically long enterprise sales cycle. In September, we also made Payroll Tax Management available on Oracle Marketplace, integrated with Oracle Fusion Cloud's Human Capital Management. Organizations running Oracle can add multi-jurisdiction payroll tax filing, funding, and money movement without migrating their payroll system of record. They can then use the payroll system of record as we file across federal, state, and local jurisdictions on their behalf. Together, the AWS and Oracle marketplaces open up new opportunities for Payroll Tax Management.
Indeed, in the Payroll Tax Management business, we have already won approximately 30 major enterprise accounts for Payroll Tax Management, and these partnerships will continue to help grow that segment of the business. In September, at our annual reselling training event, we launched AsureCentral to our reseller network and took our first resellers live on the platform, which we believe will unlock significant cross-sell for our Human Capital Management suite, as we have done in the direct business. AsureCentral brings single sign-on, user provisioning, role-based access together with payroll, tax, HR, recruiting, time and attendance, 401(k), benefits, and Luna, all in one environment, and resellers can white label the experience with their own logo. The number of clients purchasing multiple products has increased by 7% versus the third quarter 2025.
With the increase in attach rates, we are also experiencing an uptick in our retention rates versus the second quarter, and we will share updated retention metrics in our one year-end 2026 release. We remain focused on moving clients from an average of a little more than two products per client relationship towards four or more products per client over time. A brief update on AsureWorks, our administrative services outsourcing offering, which lets clients delegate key payroll and HR compliance processes to Asure. The momentum we saw at launch continued into the third quarter. Our pipeline and new clients continue to grow and set new records. The reception across the target buyers includes small hotel chains, restaurants, HVAC companies, as an example, and remains very, very strong. These are main street businesses that need payroll and HR compliance support but lack the internal resources to manage it themselves.
We are continuing to train more reps for AsureWorks every day and build out that effort. Clients who adopt AsureWorks typically represent up to five times the revenue of payroll-only clients. Because it is not a PEO model, there is no co-employment risk, which makes it a compelling and flexible alternative for clients constrained by the cost and rigidity of a traditional PEO. On the sales front, we made significant progress in hiring reps. We are confident in hitting our target of 150 by year-end. The efforts of our recruiters and our sales managers really have paid off, and we are excited to have these new reps on board. These are full solution sellers who can sit down with a business owner and present our entire product suite, and that consultative needs-based approach is central to driving both new logo acquisition and multi-product cross-sell within our existing base.
The new type of rep we hire typically ramps faster than when we have experience with prior reps. Our existing-to-new customer logo split in the third quarter was approximately 47% to 53%, an improvement versus a year ago of 36% to 64%, but similar to the second quarter of this year, where we continue to drive towards our 35% new logo, 65% base expansion mix over time. Our contracted backlog is now $86.6 million, and we expect to convert approximately 46% of that backlog over the next 12 months. We continue to operate in a positive selling environment as small and mid-size businesses need the products and solutions. Asure offers to help them navigate the complex world of payroll and compliance. In our forecast, we conservatively model flat headcount growth for our clients. We have not seen any dramatic shifts in the sales cycle process.
On the M&A front, after quarter end in October, we acquired a human capital management payroll processing company based in the Southeastern United States for an aggregate purchase price of $26.5 million. The company serves mid-market organizations with cloud-based HR, payroll, and talent tools, expanding our exposure to the small and mid-market segment and adding a developed technology that will be used to update some of our product offerings. We have an active pipeline of potential reseller acquisitions, and we will continue to pursue those opportunities. Also, in October, we closed a new credit facility, which gives us some more flexibility to pursue our strategy, and John will share more details in a moment. On AI, our view has not changed. Payroll and HR compliance is not software a generic AI can replace.
We hold money transmitter licenses, interface directly with the IRS, state, and local agencies, and manage compliance where the margin of error is effectively zero. That makes Asure a system of record and our expertise a real moat. At the same time, AI is a meaningful accelerator for us. Luna conversations grew about 25% in the quarter to more than 26,000, and in her first year, Luna has completed more than 15,000 AI actions for our customers. At the start of fourth quarter, we released the time import agents, bringing Luna directly into the payroll run with humans in control at every decision point. I also want to take a moment to recognize and congratulate our Chief Technology Officer, Yasmine Rodriguez Wakim, a pioneer in payroll tax technology and the compliance infrastructure behind it, who has been named to Women We Admire Top Women Chief Technology Officers of 2026.
Yasmine, congratulations, and thank you for everything you do for Asure and our clients. With that, I'd like to turn the call over to John to discuss our third quarter financial results in more detail and provide an update on our 2026 guidance, along with our outlook for 2027. John?
Thanks, Pat. As Patrick noted, several figures discussed today are on a non-GAAP or adjusted basis. Reconciliations are available in our earnings release and our investor presentation at investor.asuresoftware.com. Third quarter total revenues were $40 million, compared to $36.3 million in Q3 of 2025, representing growth of 10% year-over-year. Recurring revenue for Q3 2026 was $36.9 million, compared to $31.8 million in Q3 of 2025, an increase of 16% year-over-year. Recurring revenue represented approximately 92% of total revenue in the quarter versus 88% a year ago. Professional services, hardware, and other revenue was $3.1 million in Q3 of 2026, compared to $4.4 million in Q3 of 2025. The decline versus prior year was primarily due to reduced professional services provided as part of large tax deals in the prior year. Gross profit for Q3 2026 was $27.8 million, compared to $23.5 million in Q3 2025.
GAAP gross margin for Q3 2026 was 70%, compared to 65% in Q3 2025. Non-GAAP gross margin for Q3 2026 was 75%, compared to 70% in Q3 2025. Net loss for Q3 2026 was $0.6 million, compared to net loss of $5.4 million in Q3 2025. EBITDA for Q3 2026 was $7.9 million compared to $3.9 million in Q3 2025. Adjusted EBITDA for Q3 2026 was $10.5 million compared to $8.1 million in Q3 2025, an increase of 29% year-over-year. Adjusted EBITDA margin for Q3 2026 was 26%, compared to 22% in Q3 2025, an increase of approximately 400 basis points. We ended the third quarter with cash and cash equivalents of $16.8 million and total debt of $64.7 million as of September 30th, 2026.
Subsequent to quarter end, on October 15th, we closed a new senior credit facility of up to $115 million with a syndicate of five banks led by MUFG Bank Limited. The facility has an $85 million term loan, all of which was drawn at closing, a $10 million five-year revolving credit facility, and a $20 million delayed draw term loan facility. The term loan currently carries a rate of SOFR plus 3%. This adjusts periodically based on our consolidated net leverage ratio and could be as little as SOFR plus 2.75% and will not exceed SOFR plus 3.5%. We used $62.6 million of the gross proceeds to repay in full our existing credit agreement with MidCap Financial Trust.
Turning to the Southeastern U.S.-based payroll acquisition Pat mentioned, the aggregate purchase price was $26.5 million, paid as follows: $13.5 million in cash at closing, a promissory note in the amount of $3 million to secure the indemnity obligations and other adjustments, and the issuance of shares valued at $10 million. The purchase price is subject to customary working capital adjustments. Based on the current positive momentum in our business, we are updating our Q4 2026 and full year 2027 guidance. Please note that the guidance incorporates the recent acquisition we completed in October of 2026. We anticipate revenue of $42 million-$44 million and adjusted EBITDA of $10 million-$12 million for Q4 2026. This implies full year 2026 guidance of $162 million-$164 million in revenue and adjusted EBITDA of $40 million-$42 million.
Next year, our preliminary guidance for 2027, we anticipate revenue to be in the range of $183 million-$187 million and adjusted EBITDA margin to be in the range of 26%-28%. We expect our cost structure, including capital expenditures and capitalized software development costs, to remain relatively stable on a dollar basis. With that, I will turn the call back to Pat for closing remarks.
Thanks, John. Stepping back, I think the third quarter tells a clear story. We grew revenue 10% to $40 million, and adjusted EBITDA grew 29% to $10.5 million, with adjusted EBITDA margin expanding approximately 400 basis points to 26%. Recurring revenue organic growth continues to accelerate, reaching 14%, and we forecast it to be in the double digits again in the fourth quarter. We are really starting to hit our stride, but we are not slowing down. Our sales team is larger and more productive. Our clients are buying more of our core payroll and Human Capital Management products. Our unified technology platform enables us to cross-sell, which drives improved retention, and we can scale organically. We have a very active pipeline of opportunities for Payroll Tax Management. The new distribution capabilities of Oracle and AWS will help build further opportunities.
AsureWorks is gaining traction, and our recent G2 awards reflect the positive feedback our clients have about our products. Just a few years ago, we laid out a goal of $180 million to $200 million in revenue. With today's forecast for 2027 of $183 million to $187 million, we are close to crossing the goal line. We have worked hard and executed, and all of our metrics are trending up. Margin expansion and improving profitability are two important characteristics of our model. AI is helping us lower our cost to serve while improving the client experience. We are proud of the progress this quarter and even more excited about what is ahead. Thank you for your continued support and for joining us today.
Before we open the call for questions, I want to take a moment to acknowledge the recent loss of Dick Strong, a longtime supporter of Asure and a good friend. Dick was a very smart, talented, kind person, and he will be greatly missed. On behalf of everyone at Asure, we offer our heartfelt condolences to his family and Donna. Thank you for your continued support and for joining us today. I will now turn the call back to the operator for questions and answers. Operator?
Thank you. We will now conduct 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 your line is in a question queue. You may press star two if you would like to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one at this time. One moment while we pull for the first question. The first question comes from Jeff Van Rhee with Craig-Hallum. Please proceed.
Great. Thanks. Thanks for taking the questions, and congrats on a nice posting here, guys. A couple from me. First, Pat, maybe on the per employee per month, where are you now? What does a full suite purchase right now tally to? Where do you think that can evolve to over time?
We publish "The Art of the Possible," which is $100 plus per employee per month. A specific number, we will start to get a little bit more color in 2027. If you add brokerage and you add all those kind of products and services, as much as 180. We are continuing to sell more products and services, and we are training for that. Then, we have Asure Software through AsureCentral, or we will do it for you with AsureWorks. So we are still in the middle of moving, and there is different sample sizes with different training. We will lay out probably a metric around that in 2027. But right now, suffice to say, it keeps going up. This past quarter, revenue per unit, in the payroll business was somewhere up 57%, which was really a nice progression of what we are trying to do.
I think in 2027, as we get more mature, I think we can establish that metric and publish that.
Okay. Got it. Then the Southeastern reseller, a bit larger than your typical reseller purchase, I heard in the script. There is maybe some incremental capabilities there as well that might stand out. Maybe just a second more on what you are getting there with that purchase.
Yeah. First of all, the technology is obviously like a reseller acquisition, so very simple in integration, et cetera. They had some kind of unique front ends that we think will help us advance the whole business on some verticals. So we are excited about that. We think that there is some growth in selling. We also think from an integration perspective, this is what we do. So we think we could add scale, add capability, add to growth, and frankly, we thought it was a pretty attractive acquisition for us to do.
Then maybe, John, just a couple quick numbers questions then. As I look at Q4 and the 2027 outlook, what organic growth is embedded in those two numbers? This reseller, can you give us a little, dial it in a bit closer in terms of what the reseller itself brings in terms of Q4 revenue and next year's revenue?
Yeah. I'd say when we bought the business, it was probably at about a $10 million run rate. So I would expect a couple million in this quarter be realized. We think obviously there's some upside to what they were doing historically when we put our sales team behind it and when we start to maximize some of the technologies they've built out. So in terms of next year, I think the guide kind of in the midpoint implies kind of 13%-14%. I would say right now that majority of that's going to be organic, just in terms of the guide for next year.
Okay. If I could sneak one last in there, just on free cash flow. Appreciate the 2027 outlook. Is there just a real quick bridge? I keep a close eye on it. Just curious what that guide implies in terms of free cash flow for 2027.
Well, again, we have a little bit of this, and we can talk about it off, but the way we think about it, Jeff, is always thinking about the adjusted EBITDA less the cost of finance. So I think, with this new loan, we're expecting probably around $8 million of interest cost for the year. Roughly $2 million a quarter, I think.
Okay.
If you factor that off, and then again, if you want to take software CapEx off the table, that is going to be really consistent. I think we will probably be in about the $14 million range next year on that. I think midpoint of what we guided towards is in the 40s, mid-40s. Back off the software CapEx, and I think we are in the low 20s when it is all said and done from our perspective.
Got it. Great. Congrats on the quarter, guys. Thanks.
Thank you.
Thank you, Jeff.
The next question comes from Richard Baldry with Roth Capital. Please proceed.
Thanks. If I look year-over-year and I add your cost of goods sold and your OpEx, the numbers are very flat while revenues were up decent. Can you talk about the pieces of that sort of cost savings? Is it integration, AI, or just scale leverage efficiencies sort of breakdown? Seeing a lot of companies across my space noting that AI can drive some material cost savings. Wondering how far along that spectrum you feel like you are.
I'll give you my perspective first, Rich, and then Pat will obviously have his. I think we're just in the early innings. We've always said really consistently, as long as I've been here, that this is a scale business, and you're now starting to see the benefits of it. That was pre-AI. I think what you're seeing right now is the pre-AI scale part of the business. We are implementing AI throughout the business. We've got it in ops with our call centers. We're using it in the finance area. Our sales guys are going into it as well with Gong, and some of the other tools that they're using. I think early stages of us getting AI benefits. I think what you're seeing right now is just the pure scale part of the business.
That's my perspective, and I think there's a lot of opportunities in the future to take more cost out.
Yeah. I would echo with John, exactly that. I think the next wave here is a lot of I always say that the end-to-end process starts with the customer, goes to our office, and then comes back to the customer. I think in the area of workflow, we still have a lot of AI opportunity to take cost out and improve all the way around. I think there is some other things around marketing where marketing and sales and customer acquisition, again, with workflow. The work that we are doing internally, I think we are just getting a productivity factor here every quarter. We will continue to work in those areas in 2027. I would say a lot of it has come with scale, but definitely AI is top of mind in how we do business and how we become a better company.
Yeah, I did not even touch on Luna, just in terms of the customer experience, right? And their ease of use of the software. So I think there is just, again, lots of opportunities still.
Okay. If I look at the fourth quarter specifically, the adjusted EBITDA guide of $10 million-$12 million, at the low end of it would be actually down a little bit sequentially. Obviously, the upper end would step up pretty good. Can you talk about the variables to do that? The acquisition and organic growth would tend to drive some sequential top-line growth. So how do we look at that range and where we would expect to end up?
I think from my perspective, Rich, we have talked about it throughout the year. We have been running behind, in terms of where we want to be in the sales headcount. I think we are finally starting to catch up. So that is one of the headwinds. Headwinds, good to bad, in terms of we are finally getting fully staffed on that team. I do think that there is going to be a little bit of integration work too with the acquisition. So I am expecting really good follow-through from that acquisition in terms of EBITDA contribution, but not necessarily on the front end. So I do think there is going to be some work rationalizing that business. So I think I feel good about the guide. I do think that there is a little bit of headwind just with some of the things I mentioned in the fourth quarter.
Oh, and I'm sorry, John.
Go ahead.
Yeah. If I look at it around fourth quarter, first of all, there's a jumping off point on continued spend, in the sales and marketing area. We feel like we've done a lot of work with technology and the operations. From a sales marketing perspective, we're close to the 150 target of salespeople. We're going to go up again next year in salespeople. Fourth quarter implicit in that is some ramp costs in sales for 2027. The other thing is, if you look at the mix in the guide, reoccurring revenue is growing over non-reoccurring revenue to the tune of a little over $2 million in the fourth quarter. So, the quality of the revenue is super high.
The integration that John spoke of operationally, we are continuing to sell more and more products per customer, and we are spending some calories on integration between departments and workflows and customer products that we think will benefit in 2027 and beyond. In the immediate quarter, we want to make sure we get those processes right, so we are spending some money.
Yeah. Just to put a finer point on it, I mean, I think midpoint of the guide is about a 10%, little under year-on-year growth for next quarter. It is going to be, I think, a similar story as to this quarter in terms of the mix of recurring and non-recurring. We are adding a lot more recurring. We had a lot of pro services last year as it relates to some of the big tax deals. So we are not expecting that same volume of non-recurring. But we are really excited about the mix in terms of the organic growth that is outpacing the non-recurring that is falling off.
Got it. Have a good quarter.
Thank you.
Thanks, Rich.
The next question comes from Jared Levine with TD Cowen. Please proceed.
Thank you. To start, I was hoping to get an update in terms of the SMB HCM demand environment more broadly here. What are you seeing? Has there been any macro impacts or changes, as you kind of look as over the course of this year in terms of demand progression, in terms of what you are seeing on pipeline volumes or even sales cycles?
Pipeline is really good. Pipeline has gone up and we anticipate a really good fourth quarter, first quarter sales. Pipeline is strong. I would say the multi-product continues to be a focus, whether it is the managed service or software. A small business wants fewer vendors, a little bit more simplicity. They want a partner that they can hang their hat on with multiple products and services. So, those trends, I think, will continue. As far as staff, clearly they want access to capital. They want access to people. They want the easy button so they can focus on growth and a vendor that can provide more and more of those services. And also, they want the vendor to have a point of view. So in the area of compliance, we are seeing that broader pipeline of HR, payroll, compliance, all the way through the stack.
Where there is more pressure with the Secure 2.0 Act around 401(k), especially in the states that have legislated that, we see that as a big demand focus as well.
Great. For my follow-up here, I wanted to touch on float revenue. Just given the recent 25 basis point increase, can you remind us a framework in terms of how to think about that? I know you do take some duration in terms of a laddering strategy, but just how to think about that benefit from that recent 25 basis point increase as we look over the next four quarters or so.
Yeah. I think from my perspective, it is worth for us roughly $0.5 million a year, every quarter point right now with our current balances. That is a simple way to think about it at a high level.
Got it. Thank you.
So again, we talk to Goldman at least once a quarter, but we had our quarterly update with them last week, and their current view is that there is another quarter point coming in December meeting, as well as another quarter point in March. Going into next year, we probably will see another half point, at least on their current view of rates. Hopefully that is $1 million of upside to this current year in terms of float.
Then, Jared-
You are only assuming-
Sorry.
Go ahead, Jared. I am sorry.
I was just going to say, in terms of your guidance for next year, you are just assuming the one hike that has been announced to date?
Yeah. We have not overestimated the float. But yeah, that is in type in the current guide is just what is in the current rates right now.
Great.
Jared Levine, in the queue is our laddering strategy as well.
Awesome. Great to hear. Thank you.
Thank you.
Thank you. The next question comes from Eric Martinuzzi with Lake Street. Please proceed.
You had a nice uptick in the gross margins in Q3. I was curious, you've given us a view to revenue and EBITDA margins for 2027, but what's implied as far as gross margin? Was that Q3 just kind of an outlier, or is there a change in the longer-term gross margin expectation?
I think on a GAAP basis, I think we're probably in the 70% range for the year. And I think we'll probably get 2 points or so next year on a GAAP basis. There's usually about 5-point spread between the GAAP and the non-GAAP. So if you think 70 this year, it's probably 75-ish non-GAAP. And I would say next year, I think we're shooting for about 72% GAAP and about 76%, 77% non-GAAP.
Yeah. What is behind that? Is that just the efficiencies in the workforce? I will let you answer the question.
Yeah. I think it is a little bit of what I was talking about with Rich. It is not anything extraordinary except that we expect our people to continue to be able to ramp with the tools we are giving them with more and more. It is just kind of implied in the model. If you think about it, we have had this slide in the IR deck for, I do not know, for years, where we kind of talked about the breakpoints of the model at different scale levels. I think it has been out there for quite a while. At $200 million, we are expecting to be at 30% adjusted EBITDA, and it scales from there. There was some modeling behind that. It was not just aspirational. The model is just kind of playing out the way we were hoping it to.
Eric, just with the average customer revenue per unit going up and the adoption of more products and the attach rate going up, that is allowing us to have a better gross margin tick up over time.
Got it. Congrats on the numbers and the outlook.
Thank you.
Thank you.
The next question comes from Brett Huff with Stephens. Please proceed with your question.
Hey, this is Colby Sanford on for Brett Huff. Appreciate you taking the question, and nice to finally be covering you all. So last quarter you described the enterprise Payroll Tax pipeline as really strong. Since then, you've been at Workday, HR Tech Conference, Oracle, and you've added Payroll Tax Management to the Oracle Marketplace and now AWS as well. So what are you hearing from your enterprise buyers and your ERP partners at these events? And how should we think about these marketplace announcements and how they will generate new leads for you all?
Yeah, I think, first of all, our team has been in Las Vegas three weeks in a row at a busy time, and I was joking with our President and Chief Revenue Officer, Eyal Goldstein, if he was taking residence up in Nevada. But, we've gotten a lot of really good feedback. Our product teams work really hard. The strategy of the foundation level for us around embedded payroll, tax filing, treasury, et cetera, is a great foundation for us to be because it allows us to play up and down the enterprise clients to the medium and small clients. But frankly, also other payroll companies, because they use some of our foundation tools. So, the feedback's been really positive.
I was on calls even this morning and this afternoon right before earnings, with a number of different clients and opportunities and partners that really like our modernization strategy in this area, and that those tools perhaps were underserved by other players in the past. And, we have that capability. So I think our time is right now, and our time is, sometimes luck is preparation meeting opportunity. We're prepared for this moment, and I think you're going to see a lot of growth here in that area. Well, you've already seen it, but in 2027, 2028, I think you're going to see strong growth in that area.
Awesome. That's super helpful, and I appreciate it. If I could just sneak one more in there. So a larger competitor of y'all's has been leaning a little bit more into PEO, moving some of their clients out of management solutions and into that PEO business and having their sales team refer some deals into it. So just curious if you're feeling any of that new logo deals in your client base and, just any change in the competitive landscape recently with some of your competitors and just the AI natives.
Yeah, I think from our perspective, I used to run a PEO, and I was the CEO of a PEO, and that's an environment that can get complicated quickly. I personally think we have all the capabilities of the model. If we choose to do that, we would have the capability to build into that base. As far as I look, we have the capability and kind of what we're doing where you don't have to have things like group insurance and all that, where you can unbundle that, and we have kind of best-in-class tools and managed services without the PEO. I happen to like that position. As far as the competitive environment, I think all in all, it's going to be a changing environment. We're a better company with AI and software, not one or the other. And I think other competitors feel that there's opportunities too.
For us, it's an exciting time to be part of a Human Capital Management space. We think there's market share opportunity to go after, and we're pleased to report a really good quarter because of that. I think the trend towards multiple products, multiple solutions, having tools not only around breadth of products but also workflow within products is where a good solution looks like. Then agentic AI with the workflows gives more power to the user in a quicker basis and makes good decisions, and we're leaning into that strategy as well.
Awesome. Thank you.
Once again, ladies and gentlemen, to ask a question, please press star one on your telephone keypad. The next question comes from Greg Gibas with Northland Securities. Please proceed.
Hey, good afternoon, guys. Congrats on the quarter. Wanted to ask regarding those strengthened positions, one within the Oracle ecosystem, but also, Payroll Tax Management available there, but in the relationship with AWS. Could you maybe speak to the response you're seeing so far at this point, as it relates to the opportunities with those networks or potential customer bases?
Greg, it is so early days. What I would say, I was at two of the trade shows. I did not have a chance to go to Oracle just with timing of earnings, but our team was there. I will give you an idea. Last year, we were at the Workday conference. I think our lead volume was probably triple last year. It is just a progression of us having a lot of success stories and taking market share. There has been a good buzz there. The lead flow was really good. HR Tech, very similar. From the feedback I am getting at Oracle, really good opportunities, some good serious buyers, and there is an opportunity with the modernization of the work we have done. People really want to engage with us, and that is right where we want to be. The early returns are real positive.
A lot of these announcements are over the last 45 days or so, and a lot of this activity has been in the last 30 or so. We will continue to progress here, but it is probably just a little bit early, but initially a lot of excitement.
Okay. That is fair. With respect to the payroll processor you acquired, I think you mentioned some verticals or capabilities that add an incremental opportunity to where Asure sits today. I wondered if you maybe expand on those, and then should we think about the purchase price being pretty close to your 2x revenue target?
Yeah, I think purchase price was about 2.6x revenue. We disclosed that, and how I look at it is we got a nice size, nice capability. The staff is really strong. They know our products and services, we know their products and services really well. The learning curve is not a long putt. It is a real easy putt for us. When I look at some of the vertical markets they have done and some of the capability, I think some of the scheduling capability and kind of time opportunity there, in addition to some of the reporting, we think was a nice add to some of our product family and service family. So that we are going to leverage that going forward.
Got it. Thanks very much.
Thank you. At this time, I would like to turn the call back over to management for closing comments.
No, so anyway, I am just seeing if the team had anything. Hey, Q3 was an outstanding quarter for us. Good momentum, reoccurring revenue going up. We are excited about it. We think that will pay dividends as we finish the year of 2026 in a strong way. In 2027, it sets us up for really good growth. John mentioned that in the IR deck, I think it was three years ago, we kind of pointed to $180 million-$200 million. We are in that sweet spot. It has been very predictable for us, that scale wins. The AI, good fortune. We are embedding that in a lot of things we do, which is helping our software. Change is afoot in Human Capital Management. Our people are at the tip of the spear leading change.
We have got a lot of pipeline of opportunities and I think we are a story to watch here, and I have been here a long time, really, really excited. From an investor perspective, hey, we lost a good one at Dick Strong, and I want to, again, wish my sentiment to the family, but right now I think it is a real good time to look at Asure again, because we got a lot of stuff going on. I really appreciate your time, and have a good day.
Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.