Summary
Asure reported second quarter 2025 revenue of $30.1 million, up 7.4% from the prior year quarter. Revenue excluding ERTC rose 10%. Gross profit was $19.9 million, up 5.5%, but gross margin slipped to 66.1%, down 1.2 percentage points. Operating loss came in at $4.65 million, a wider loss than the prior year quarter. Net loss widened to $6.1 million, and diluted loss per share widened to $0.22. The GAAP bottom line is still moving the wrong way even as the top line grows.
Non-GAAP measures painted a better picture. Adjusted EBITDA was $5.2 million versus $4.1 million in the prior year quarter, while EBITDA was $1.4 million versus $1.3 million. Non-GAAP gross profit was $21.9 million with a 73% margin. For the first half, revenue reached $64.98 million, up 8.8%, and gross profit was $44.52 million, up 7.3%. First half net loss widened to $8.52 million, and diluted loss per share widened to $0.31. Adjusted EBITDA for the first half was $12.6 million versus $10.9 million, and non-GAAP gross profit was $48.1 million with a 74% margin.
Cash generation improved. Operating cash flow was $5.15 million for the first half, up 399.7% from the prior year first half. Capital expenditures were $0.39 million, up 4.8%. Deferred revenue stood at $3.72 million, up 22.9% from the prior year quarter. Remaining performance obligations jumped to $82.39 million, up 67.6%. Those metrics suggest stronger bookings and future revenue visibility. Operating margin was -15.4%, down 0.5 percentage points from the prior year quarter.
Asure completed the acquisition of Lathem Time on July 1, 2025 for a purchase price of $39.5 million. Management expects Lathem to add scale to the time and attendance business, bring high margin recurring revenue, and create cross-selling opportunities for the broader HCM suite. The company provided revenue guidance for the third quarter of 2025 and raised its full year 2025 revenue guidance based on year-to-date results and recent business trends, including the acquisition.
Risks remain. The company still reported a GAAP net loss and a wider operating loss, and the acquisition adds integration and execution risk. Asure operates in highly competitive markets and depends on reseller partners for a large share of its clients. It faces regulatory risk around ERTC claims and IRS collection measures, money transmitter laws, privacy and data security rules, and potential material weaknesses. The new MidCap loan agreement includes a Total Leverage Ratio covenant of no greater than 5.50 to 1.00 and a minimum liquidity threshold of $10.0 million. Client funds held in trust expose the company to market, interest, credit, and liquidity risk. Management said it believes liquidity is sufficient for at least the next twelve months, but future acquisitions or cash demands could require additional capital.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $30.1M | $34.9M | -13.6% | $28.0M | +7.4% |
| Gross profit | $19.9M | $24.6M | -19.1% | $18.9M | +5.5% |
| Gross margin | 66.1% | 70.6% | -4.5 pp | 67.3% | -1.2 pp |
| Research & development | $1.3M | $2.0M | -37.3% | $2.0M | -35.1% |
| Sales & marketing | $8.1M | $8.4M | -2.8% | $6.9M | +17.7% |
| General & administrative | $11.0M | $11.9M | -7.8% | $10.1M | +8.4% |
| Total operating expenses | $24.6M | $26.6M | -7.7% | $23.1M | +6.6% |
| Operating income (loss) | -$4.7M | -$2.0M | -130.9% | -$4.2M | -11.2% |
| Operating margin | -15.4% | -5.8% | -9.7 pp | -14.9% | -0.5 pp |
| Net income (loss) | -$6.1M | -$2.4M | -155.3% | -$4.4M | -40.4% |
| Net margin | -20.3% | -6.9% | -13.4 pp | -15.6% | -4.8 pp |
| Diluted EPS | -$0.22 | -$0.09 | -$0.13 | -$0.17 | -$0.05 |
Risks
The new Credit, Security and Guaranty Agreement with MidCap Financial Trust increased interest expense to $809 thousand for the three months ended June 30, 2025 from $208 thousand in the prior-year quarter. The filing warns that future cash flow from operations may be insufficient to service debt, and a default could let creditors declare all outstanding indebtedness due and payable.
The MidCap Loan Agreement includes restrictive covenants such as limits on dividends, a quarterly Total Leverage Ratio maximum of 5.50 to 1.00, and a minimum liquidity threshold raised to $10.0 million in July 2025 amendments. These covenants limit borrowings, future financing flexibility, and the use of proceeds, which are only available for permitted acquisitions.
Volatility and weakness in bank and capital markets may impair the company's ability to refinance debt or obtain cost-effective financing. The variable-rate MidCap loan bears interest at Term SOFR plus 5.00%, so increased interest rates would raise costs on existing debt.
Recent tariff increases and new trade restrictions could significantly raise cost of goods sold for Time and Attendance products by increasing costs of imported raw materials, components, and finished goods. If Asure cannot offset these costs through pricing changes or alternative sourcing, its financial position and results of operations may be adversely affected.
On July 1, 2025, Asure acquired Lathem Time 2025, LLC, adding cloud-based time and attendance solutions and a customer base that it plans to cross-sell to. Amortization expense increased $986 thousand, or 13%, for the six months ended June 30, 2025, partly due to a continuing acquisitions strategy, which raises integration and execution risk.
SaaS KPIs
All quarters →Non-GAAP gross margin
Adjusted EBITDA margin
Adjusted EBITDA
Recurring Revenue
EBITDA
EBITDA margin
Recurring Revenue as % of Total Revenue
Total Clients
Summary, forecast, risks and KPIs are extracted from ASURE SOFTWARE INC's SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.