Asure Software Inc (ASUR) 2024 Q1 法說會逐字稿

Good afternoon, and welcome to Asure's first-quarter 2024 earnings conference call. Joining us today 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 the analysts and investors. I would now like to turn the call over to Patrick McKillop for introductory remarks. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for Asure's First Quarter 2024 earnings results call following the close of the markets 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 those 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 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 May 15, we will attend the 19th annual Needham tech media Consumer Conference in New York. On May 16, we will attend the Jefferies HCM Summit in New York.

On May 29, we will attend the 21st Annual Craig-Hallum conference in Minneapolis. On May 30, we will attend the 52nd Annual TD Cowen Tech Media Telecom Conference in New York. on June 4, we will attend the Stifel Cross Sector Insight Conference in Boston. And finally, we will participate in the Northland Capital Markets Virtual Growth Conference on June 25.

Investor outreach is very important to Asure 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 now like to turn the call over to Pat Goepel, Chairman and CEO.

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

Our first quarter revenues were strong, coming in at $31.7 million. Our revenues were driven by our contributions from our core business, strategic initiatives and acquisitions, including our assure marketplace offering payroll tax management and interest earned from funds held for clients, which we refer to as float.

We believe in 2024, our momentum will grow throughout the year and we're off to a great start advancing our business through artificial intelligence, new technology enhancements, leading partnerships and strategic sales initiatives, such as bundling of our oral one care products with payroll to drive new client additions continues to be part of our strategy.

Small businesses in the US have traditionally not been our not had the resources to offer for one k. retirement solutions. The Security Act 2.0 from the U.S. government is legislation that aims to increase employee participation in retirement plans by offering tax credits to support the setup of employer-based retirement plan currently there are around 20 or more states in the United States that have mandated these plants.

Also many more have introduced legislation mandating 41 K plans for our small businesses assure as the solutions they need. We've set up the plants, our announcements with Workday and that certification joining the SAP partner edge open ecosystem, our really strong validation of advancing our technology, and these partnerships will help us with more enterprise level clients.

In today's press release, we highlighted that after receiving the Workday certification, we went live with our first client, which is a major league baseball team. This client is an example of the complexity of multi-state payroll as the staff and team members incur payroll tax liabilities in multiple states each week we're excited to win this business and look forward to achieving more opportunities with Workday.

We also remain excited about our partnership with SAP, which allows us to enhance our payroll tax engine by integrating with the SAP system and streamline streamlining payroll tax processes for our existing SAP client.

We have also recently formed a partnership with a tax credit firm, HR logics which will provide our small business clients with access to capital. The partnership will help small business owners with identifying employer tax credits and many are unaware of such as work opportunity tax credits, research and development and overall tax credit programs.

Our sales bookings helped drive growth and repetitive revenue for the quarter. Our pipeline is strong as we grow our product portfolio and enhance our technology. We are supporting our sales efforts with digital marketing, and we believe we'll drive higher level of sales leads and productivity in 2024.

Based on our current business trends, we're reiterating our 2024 revenue guide have $125 million to $129 million with adjusted EBITDA margins of 20% and 21% as a reminder, this 2024 guidance excludes any potential contributions from ERTC. filing, but it does include our plans to continue to make acquisitions and grow organically. Our guidance for 2024 implies a 25% growth rate if we exclude ERDC. from 2023 revenues for comparison.

Now I would like to hand it off to John to discuss our financial results in more detail as well as our Q2 guidance. John?

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.

Reconciliations themselves are also included in our most recent investor presentation posted in the Investor Relations section of our website at investor.asuresoftware.com. Now on to the first quarter results. First quarter revenues were $31.7 million, decreasing by 4% relative to prior year. However, excluding ERTC, total revenues were up 10% from prior year.

Recurring revenues in the first quarter grew 8% versus prior year to 30.3 million. And excluding ERTC, recurring revenues were up 9% from the prior year first quarter. Recurring revenues grew on the strength of our HR compliance solutions, our tax solutions, a share marketplace and increased interest revenues with the average client balances of approximately $2.4 million throughout the quarter.

Net loss for the first quarter was $300,000 versus net income of $300,000 during the prior year. Gross margins for the first quarter decreased to 71% from 74% in prior year. Non-gaap gross margins for the first quarter decreased to 75% from 78% in the prior year.

The decrease in gross margins for the first quarter is primarily attributable to decrease in nonrecurring VRTC revenue. We continue to believe there's substantial margin upside over the longer term as the business scales.

EBITDA for the first quarter was $4.4 million, down from $6.8 million in the prior year. Adjusted EBITDA for the first quarter decreased to $6.8 million from $8.2 million in the prior year. And our adjusted EBITDA margin was 22% in the quarter compared with 25% in the prior year. We ended the first quarter with cash and cash equivalents of $23.2 million and we have debt of 5.3.

Now in terms of guidance for the second quarter of 2024, we are guiding second quarter revenues to be in the range of 28 million to $29 million. Adjusted EBITDA for the second quarter is anticipated to be between 4,000,005. We are reiterating our 2024 revenue guidance to be in the range of $125 million to $129 million with adjusted EBITDA margins of between 20% to 21%.

As Pat mentioned in his comments earlier, these guidance figures exclude any contribution from BRTC. revenues, but assume a combination of organic and inorganic growth.

Our pipeline of potential acquisitions remains strong and we feel confident about reaching our objectives. We also remain excited about the outlook for core products such as our payroll tax offering, which brings additional client fund balances and the resulting flow revenues as well as potential for numerous new initiatives we have recently launched, such as the portal when caseload.

In conclusion, we are excited about the remainder of 2024 and look forward to 2024 as being a great year for sure and driving profitable growth and leveraging the initiatives we've implemented across the business to drive sustainable growth and create shareholder value.

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

Thanks, John. We're pleased to have delivered strong solid results in the first quarter of 2024. We remain committed to creating products and technologies that make a difference for our clients. The continuous improvement of our solutions over the last few years is being reflected by the growth of our business, and we're happy to see positive impressions from our client base.

The improvement of our solutions is ongoing, and a few recent examples include launching a best-in-class employee self-service and role-based identity access software, embedding a new AI. agent into our enterprise payroll tax management platform, which will assist in complex multi-state tax compliance inquiries is another example of our efforts.

Our business has multiple growth drivers in our core payroll business, Assure market play, payroll, tax management and our foreign one k. offering. In addition, at tuck-in acquisitions, small business owners in the US are tasked with an enormous challenge trying to navigate all the regulations that have been put in place over the years.

And we're offering multiple solutions to these business owners in the demands of their time and resources. We anticipate demand for our HR compliance solutions will continue to be healthy as businesses increasingly seek to supplement their internal capabilities with external experts who can help them navigate increasing complexity of doing business day-to-day.

We've added benefit in insurance capabilities in the insured marketplace, and we expect to grow going forward our payroll tax management solution has also great potential as evidenced by the recent news of our first Workday client, a major league baseball team go online, and we remain excited about what lies ahead for this business.

Our sales initiative and bundling for one k. with payroll has gotten positive. Reception in the secure 2.0 act will allow as simple that many more for O. and K. plan, which states are mandating now, and we expect more to pass mandates in the future.

Our guidance for 2024, we'll flex our expectation for continued growth, and we expect to be delivered with a combination of organic and inorganic growth when we view the business, excluding ERTC., core revenues continue to grow at a very strong rate, and our guidance for 2024 implies 25% plus potential growth.

We hope that our discussion today helps illustrates our plan as we move on from BRTC. We now feel the business is right-sized for future success as we enter the remainder of 2024.

In summary, we're pleased to have delivered another solid performance in Q1 against the backdrop have some unfavorable year-over-year comparisons, which we will be up against for the next few quarters. The unfavorable year-over-year comparisons will start to lift away in Q4, especially.

And assuming we achieve our goals, the growth rates will be much healthier as we exit Q4 and enter into 2025. We'll continue to provide innovative human capital management solutions that help small businesses, thrive, human capital management providers to grow their base and large enterprise streamline tax compliance.

Thank you for listening to our prepared remarks. So with that, I'll turn the call back to the operator for the Q&A session. Operator?

(Operator Instructions)

Joshua Reilly, Needham & Company.

All right. Thanks for taking my questions and nice job on the quarter here. Can we get an update on how many acquisitions you've made now year to date, how valuations are trending? And where are you relative to the inorganic revenue assumptions that you laid out in the guide initially for the year?

So Josh, thank you on it. And just by the way, and we're fortunate enough to have Joe Goldstein, our President and Chief Revenue Officer with us as well to help answer questions.

But as far as acquisitions, we've made really good progress in the first quarter and you anticipate to make a very similar process in the second quarter. We have probably done, you know, about a handful of acquisitions here.

I don't know if we want to get too much into the noise of what's closed and what's not what I would suffice to say is, you know, I think we are absolutely on track, if not maybe slightly ahead of on track around acquiring now some of whom have to implement and some implement very, very quickly and some it takes a month or so.

But we're right on track in doing now what I would say and on the purchase price, we're probably just slightly under two times. We're thrilled with that kind of purchase price amount so far. And it's been a combination of either equity where we've done some small equity deals as well as cash and loans. So suffice to say, we're really bullish about our plan, not only for the year, but the first half of the year and the integration of those have gone very, very well.

Got it. That's helpful. And then could we get some more details? What was interest income in the quarter and maybe compared to last year in the same quarter. And is the yield on the float bounces up year over year or is that consistent with what it was last year? Just some more detail there would be helpful.

Thank you addresses, John. So last year, rough numbers, about 3.5% is what we earned on the client funds balances this year, roughly 4.5, the balances have ticked up a little bit, but that gives you a rough order of magnitude as that kind of how that's progressed.

Got it. That's helpful. And then maybe just last follow-up on that. Do you expect it to be 4.5 for the rest of the year, or is there more upside potential for the yield to increase Thank you, guys.

Yes. So what we factored into our numbers, Josh, was a 0.5 point decrease midyear. Obviously, we don't know if that's going to happen or not, but when we kind of came up with our forecast for the year, we were assuming 0.5 point. So there might be little upside in that into our model, depending on what happens on the balance.

Thank you, guys.

Thanks, Josh.

Bryan Bergin, TD Cowen.

Hey, guys, good afternoon, and thank you on that. So obviously a big emphasis on your tax solutions in the prepared comments and good to hear about that first Workday client going live. Can you give us a sense of how you're thinking about the growth potential of the tax business and and the potential scale as a mix of the overall company over the medium term?

I think from our perspective. First of all, these are enterprise deals, both SAP as well as Workday come in. And you know, just we have opportunities in the reseller mix as well. But as enterprise deals. If I thought about it, John and I were talking the other day and when we acquired PTM., we our kind of payroll business was roughly 40% or so of our float. So our standalone business, if you will, is 60% yet on flow and tax, it's all part of our value proposition.

Now since then, we've spent some calories and time and tiers and then Smiles really growing tax. We're thrilled as we have some of these enterprise partners in addition, new PEO partner and Prism. And certainly we're going to grow that business.

What I would say, implicit in our guide around our repetitive revenue last year, we're about with CERTC., about 84% or so repetitive revenue this year will finish in the high 90s taxes. A big part of that is profitable.

It's sticky. And you know, the book-to-bill in some of these enterprise clients are a little bit longer than our small business. But suffice to say, over a multiyear plan, we think we can grow tax quite a bit. It will be a mixture of fees and flow, and that's all part of the value proposition.

But you know, as I was reflecting even on our guidance, we started out repetitive revenue this quarter growing 10%. If you think about our guidance, we're going to finish the year much stronger matches based on the numbers. Tax Filing is going to lead and be part of that value proposition. So we think there's huge opportunity and this will be multiyear, but it will also be growth this year as well.

And I'll just put a little bit finer point on what Pat said, just to just make sure I was clear when we think about the client fund balances, probably about 60% are specific to this tax business. So it's a key part of the strategy. So it's part of how we price it. It's part of the recurring revenue because of that, right? So that's that's a really important thing that I think's a little bit nuanced relative to some other payroll companies. They don't have that as part of their product and go-to-market strategy.

Right. That makes sense. Good detail on. But my follow-up here so I guess versus three months ago, how would you characterize the overall ATM demand environment as well as kind of the competitive and pricing environment dynamics in the market?

Yes, I'll let Gail, if you want to jump in, but just just in general, what I would say, as you know, we specifically pivoted from ERTC. We've leaned into some of the value proposition around, you know, access to capital around getting good people to work as well as to be compliant. And I think that value proposition, we pivoted a bit away from ERTC, but that was always part of our value proposition in any way, and we've leaned into some new products and services.

What we're really thrilled is this first quarter, our payroll sales were up 68% over last year is evidence that if you get the right value proposition, the right bundles you can grow. Now I mean it sound easy for rail to execute. There's a whole lot of sweat that goes into that. But maybe just your comments on the market.

Yes. Thanks, Pancho, Brian. So specifically, we're not seeing any pricing pressures or any issues around pricing for new deals and for upsells within our customer base, we are seeing great growth. Listen, we're a lot of our competitors. And they've said that they've decided to continue to go more and more upmarket. So we continue to see an underserved market under that 200 employee range.

And that's helpful. For us just in terms of deal cycle time and the ability to win more deals. But we're not we're not seeing any pressure specifically on pricing there.

Okay, good. Thank you.

Thanks, Bryan.

Richard Baldry, Roth MKM.

Thanks. Really looking deeper at that 68% increase in our payroll sales year over year, you talked about how comfortable you are with your sales capacity now hiring plans or goals throughout the year. How is the sales 10-year trending? And maybe do you feel like that was geographically or vertically pretty broad? Or is there any concentration inside of that?

Yes. I think just starting off from a from my level, I'm very pleased with the sales execution. I think the pivot is probably took, as you know, about about a quarter or so. And then I think in some areas we reference stand-alone tax or the new 401-K. The book-to-bill is probably long needed about a quarter. What I would say is the ability to hire and ability to grow the ability to sell.

You know, I think Gail's team has done very well, but it may be, as you see throughout the year. I think from a hiring, we anticipate around 130. We're probably you know, we're very judicious about who we hire and how many people were under that a little bit today. But maybe if you want to go back but that.

Yes, in drinks, the goal would be to get to about 130 quota carriers by the end of the year. And I'm really happy with the pivot with some of the numbers Pat mentioned, was 68% growth in those payroll sales. And just from a new payroll unit, it's almost 100% growth in that area. So those are great healthy ARR bookings that come with tax.

They come with marketplace add-ons and they come with some of the additional four one K, the Form 10 K offering that we have and then the ability to cross-sell more to these customers once they go live, right? So a much healthier mix and our ability to pivot that quickly and in to grow that core business year over year is great, and it's only going to accelerate.

So the reps that we have doing really, really well high productivity with are those wins with leading with ERTCDA. are basically on par this year from a productivity perspective, but doing it with our ERTC. with really good core payroll HCM, a are our sales, and that's fantastic. That's just going to grow for us as we get more people comfortable with for O. and K., get more people comfortable with some of the tax credit solutions that we announced earlier this week and where we could just continue to capitalize on it.

If I switch back to the tax side on the Workday SAP area, can you hear me look at now with early wins, obviously would build some referenceability. How big can that space be with just those two sort of end market players?

I don't know if there's a way to think about the RPU from your side to think about what a deal size would look like and what's your go-to-market ability to move the dial on those types of deals is or is it really sort of once they build some referenceable bases than their sellers will push the growth in that?

Thanks. Yes, I think it all and sometimes it has a phrase, you know, two comma deals in small business where your average sale is somewhere a little over $3,000. You don't adhere to comma deals were in some could come a pursuits which are really exciting for us.

As you know, over time, this could be $100 million business, um, and yet that doesn't mean you should spreadsheet than 25. But I will tell you we have an opportunity here, both in treasury management and as well as tax filing.

And it's not just the two enterprise partners that are world-class companies. There's the PEL. group there is in our software group. We have interest level is really, really high. And then some of the development that we're doing on, we really feel good about in our bundling of treasury management of tax filing, et cetera. So it's a $100 billion business unit by itself over time and we're just getting started, Dale, I don't know if you'd point out my lighting thing.

We the pipeline, the pipeline reaches out multiple times year over year on I would say our sales team is, you know, we're fully staffed on that on that side from my individual contributor perspective. And we've got folks that I am very confident in that have sold on this type of sale, specifically before we understand the competitive landscape extremely well.

We're very, very excited about the modernization of the platform and what our CTO has done with the solution. And frankly, we're getting pulled into a lot of opportunities rather than pushing our ways in, and that's always refreshing to see.

And then on the on the deal size like Pat mentioned on the higher end, too, as you have six figure deals and then on the lower end, probably, you know, four or five times what a normal payroll direct deal is today.

And then lastly, we brought in an operational leader as staff that work with Phil, I'm going to pass. He's run a $100 million plus business in PacSun, we really beefed up our personnel, the operational staff. So we have the right technology, people right out of the reach, the right salespeople and then the right market at the right time. So this is going to be a foundational growth item. It'll take a while because of book to bill and because there are enterprise sales and in growth.

But we're really bullish on this opportunity because we don't know the internals are base numbers sort of curious and without a lot of commitment to this, but if the payroll sales were kept up at a clip like the 68% year over year, would that imply or a longer-term sustained ability to keep up the 25% organic growth rate? Or is that number sort of faces tough comparisons and by definition have to come down a little bit over time?

I'll give you my perspective, Rich.

I don't think we've ever claim that this is going to be a 25% organic business. We know that it's going to be a combination of that roll-up strategy. And the organic is it was going to get us to scale. So I would say we've been pretty consistently since I've been here that we think we're going to be a double-digit organic grower.

I'm not sure we'll be at the 25% level.

But I think when you combine with the inorganic side of the house and do you think that's achievable?

Yes. And then the yes, the only thing I'd say implicit in the guide is acquisitions and organic growth, but it's clearly going to accelerate through the year. And then we'll be in a really nice position where we're high 90s, repetitive growth that as we launch, and that's what I thought it would come with local counsel, and that's what we're planning for, and that's our second company.

Great.

Jeff Van Rhee, Craig-Hallum Group.

Yes, great. Thanks for taking my questions. Several just want to clarify on the 68% of payroll sales increase. Are you is that the comparable number to what you would typically quote is your total bookings year over year? For the quarter?

Yes, no, you know, Jeff, we had some noise there with the RTC. and some of that rather than kind of parse everything out. We just said this year where especially the first three quarters. We have all these comparisons with DRDC. We have some bundles, whatever this was just, you know, obviously, we're a payroll business and it's a good majority of our revenue. We wanted to highlight that because you know that some that I think people will feel really good about. And it's clearly an emphasis with our bundles, whether it's for O. one k. or some of the new products that we have.

Okay. And then on the the prior acquired revenue target was $10 million to $15 million. I was unclear. It sounded like you said you're running a little bit ahead of where you thought you'd be. Are you still expecting to be in that $10 million to $15 million of annual acquired revenue?

Absolutely. I mean, I would say we've had a very strong first quarter, first half some of those just just to start if we didn't acquire anybody after that, we'd be very close to the low end of the range. So we'll continue to acquire into this. But yes, we're on pace.

Yes. I'll just say I'll make a quick comment on this and Patina can can add to it. I think we've talked about it, I think on some of these calls previously, there's a unique situation kind of going on in the industry, right? It's kind of opportunistic for us. But with the changing regulatory landscape, a lot of the states are now saying that people processing businesses need to be regulated like a bank.

And so when we were, you know, I think pretty early on I think we resisted it because we thought it was pretty a pretty aggressive move off at this stage. But I would say that three years ago we decided to embrace it. And so we've gone down a path to get a license. It is going to be hard for a lot of the smaller players, some of our resellers to afford that compliance. That's why we launched the treasury management solution.

But again, I think a lot of people are trying to decide is it something they want to continue on with. And that's where the national finance. I think I think we're going to have a lot of opportunities over the coming months and to kind of take people into our arms. So that's just another kind of backdrop as regards to acquisitions.

Yes, definitely helpful, John. I should have I was going to go down that path I know obviously for one case, the Cures Act has been an area of focus and Treasury also just on those two avenues. Any other quantification you can give to give us a sense of the ramp in deal counts, bookings pipeline? Just any any quantification in those two areas?

I'll speak to treasury and then I'll let Pat speak to formally K. We've launched this with partners with JPMorgan. We have people that want to buy from us right now. We're just kind of hold them off as we get it up and running. We want to make sure it's a bomber solid before we put them on. So I think we are holding that up a little bit just with our getting it launched, but answer I think there's good demand, almost unsolicited demand for that product. And then I'll let Pat can talk on portal.

Okay. Yes, just for one can see. First of all, we don't we pivot in launch, then I am going to get almost a week or two, Ray, we had this plan, but we've moved into sales motion and marketing motion very, very quickly I would say right now, we're probably a couple of months behind where I'd like to be on the marketing sales perspective. But we're clearly we're really starting to pick up the pace on the book to bill, I would say just based on it's a new business for us, we're probably about three, four months behind well over time. What we want to be able to do is sell in start of four O. and K., probably I'd like to bring that number in about 60 days, middle, it's somewhere around 120 right now. So we'll go through that just as we grow and learn and and you don't get the muscle memory, but that's where exactly where we are in the process.

That's helpful.

Appreciate it.

Vincent Colicchio, Barrington Research.

Yes, Pat, curious of that. Can you characterize the your employee base of a hiring currently, what does it look like our employee base or the employee base?

Obviously, our clients, I would say we're going to we're looking at that number were probably flattish in some areas, you had all their hiring in some areas and you don't basically they're holding having to access the capital.

And the small business is still the biggest issue in on some of the regional banks are lending and interest rates are a little bit high on. So but by the same token, getting quality people is still a concern. So you know, from my perspective, it's been flattish.

I'd love to say, as you know, I do think as we connect more people to small businesses, that's got a shot to go up one or 2% because there still is hiring demand. I would say they've been unable to execute or unable to get the capital they need to grow. But that's exactly where we are today. How does your bookings breakdown between new and existing clients?

Word, Bill, I'll let you answer that, but I believe we were well go ahead and order.

So yes, we're still right around 70% is new business and 30% of the bookings is cross-sell. So again, huge opportunity for us on the cross-sell side.

But the majority is still a new business and where I'd like to go if that is in, we did want to, as highlighted in our release around some of our technology initiatives, this common user interface with the identity access management is going to be really good for us as far as the assumption around that marketplace. That's from Brazil that allows us to get in event-driven marketing in a big way. So we anticipate a lot of growth from that over time.

Now we're rolling this out and there'll be some learnings here over the this quarter and next. But as we get really solid. But that what I'd like to do is take that 70, 30 or so new sales more to ultimately maybe reverse at that asset going to happen overnight. But I think that's the opportunity we have in this technology foundation that we introduced this quarter and some of the subsequent events. That's exactly where we're going. So feel good about where we are and then the new logos side has been has been very strong while we get to that point.

Thanks. Bet. On a nice quarter. Thank you.

Eric Martinuzzi, Lake Street Capital Markets.

Curious on the decline in the cash balance from Q4 quarter end to Q1 quarter and were down $7.1 million. Can you help me bridge that?

Yes. I think I had a couple of things happen. As you know, the first quarter is always seasonally impacted by W2 revenues. We collect those funds at usually in December, we defer that revenue and we recognize that revenue in Q1 and also we pay a lot. We have a lot of annual events that happened in the first quarter, whether it be bonuses or we have a sales kickoff. And so there's there's some abnormal spending that always happens in the first quarter and in the fourth quarter is a little bit inflated, usually because of that W-2 cash coming in. And then obviously, we spent some money on some acquisitions as well.

How much did you spend on the acquisitions in Q1?

I don't have I don't have it right in front of me. I think it was a couple of million bucks going from order bank from my memory and also in areas of area, you know, no, I was more net all in, but because your eyes we had the people or the people strategy deal, there was an equity component in that. So that was that piece of it.

And then the other thing is the vendors spend. We do have some annual renewals that on it all come due in the first quarter. And then this quarter specifically, we had two events where normally we have one. So um, you know that, um, we're pleased with the cash this quarter, but we do drain a little bit of cash first quarter and then typically we're better as we go through the year.

Last year, your cash was up 4 million between Q4 and Q1 this year being down $7 million. But I'm just not.

Yes, happy to take it offline or I think I think there was a receivable.

Yes, I think it was like you are your tenancy will might have come in from the government last year if I'm going from memory. So I think that might have been the dynamic is an unusual quarter last year for the first quarter.

And John, if I remember correctly, that was close to $7 million, right?

Yes.

So Eric, that's a lot of the rate there. And have we closed any acquisitions in Q2?

Yes, I think there's one disclosed in the subsequent events that we got closed yesterday.

Thanks for taking my questions.

Yes, thank you.

We have reached the end of the question-and-answer session. I would now like to turn the call back over to Pat Goepel for closing comments.

I appreciate everybody's time today on Lackawanna and Asure it's a great time to be here and we appreciate all of you. Patrick mentioned we have a lot of investor outreach here over the next quarter. We hope to see you soon. So thank you.

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