Asure Software (NASDAQ:ASUR) delivered a quarter that was well received by the market, as its Q2 results surpassed Wall Street’s revenue and profit expectations. Management credited expanded product cross-selling and notable improvements in platform adoption for driving performance, with CEO Pat Goepel emphasizing that “our past investments in technology products and AI are showing real returns.” The company also highlighted ongoing efforts to deepen client relationships and increase product attach rates, which contributed to the improved adjusted EBITDA margin.
Is now the time to buy CRI? Find out in our full research report (it’s free for active Edge members).
Carter's (CRI) Q2 CY2026 Highlights:
- Revenue: $615.5 million vs analyst estimates of $605.7 million (5.2% year-on-year growth, 1.6% beat)
- Adjusted EPS: $0.26 vs analyst estimates of $0.06 (significant beat)
- Adjusted EBITDA: $30.8 million vs analyst estimates of $26.43 million (5% margin, 16.5% beat)
- Revenue Guidance for Q3 CY2026 is $750 million at the midpoint, below analyst estimates of $798.5 million
- Adjusted EPS guidance for Q3 CY2026 is $0.85 at the midpoint, below analyst estimates of $0.89
- Operating Margin: 22.7%, up from 0.7% in the same quarter last year
- Locations: 1,042 at quarter end, down from 1,065 in the same quarter last year
- Same-Store Sales rose 5.1% year on year (2.2% in the same quarter last year)
- Market Capitalization: $1.48 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Carter's’s Q2 Earnings Call
- Richard Baldry (Roth Capital Partners) asked about the impact of AI on cost structure and revenue opportunities. CEO Pat Goepel stressed that AI is driving both operational efficiencies and new cross-sell opportunities through intent and trigger data, and CFO John Pence highlighted that sentiment analysis is being used to proactively improve customer retention.
- Jared Levine (TD Cowen) questioned the drivers behind double-digit organic growth guidance and the expected impact of non-recurring revenue normalization. Management explained that recurring revenue growth is expected to offset year-over-year declines in professional services and hardware.
- Vijay Homan (Craig-Hallum Capital Group) inquired about progress toward the company’s 150 sales rep target and the drivers behind increased product attach rates. CEO Pat Goepel explained the focus on hiring consultative sales reps and noted strong momentum in cross-selling payroll, HR, and time and attendance solutions.
- Joshua Reilly (Needham & Company) asked about the composition of organic growth and the potential for large payroll tax platform deals. Management confirmed a robust pipeline and reiterated that guidance does not assume major one-time tax deals, with future wins to be additive.
- Eric Martinuzzi (Lake Street) asked about adjusted EBITDA margin improvement and the performance and integration of the Lathem Time acquisition. Management highlighted consistent retention, realization of cost synergies, and the shift of hardware sales to a recurring Hardware-as-a-Service model.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team is focused on (1) the trajectory of recurring SaaS revenue and cross-sell rates as Asure deepens platform adoption, (2) the company’s ability to drive sales force productivity and expand AI-powered automation to further improve margins, and (3) progress on managed service adoption and execution of large payroll tax platform opportunities. Successful integration of hardware and professional services into recurring models, and continued expansion of the product suite, will also be important markers for the company’s performance.
Carter's currently trades at $40.29, up from $37.79 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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