Summary
ASURE Software reported third-quarter 2025 total revenue of $36.3 million, up 24% from the prior-year quarter. Year-to-date revenue was $101.2 million, up 14%. Gross profit was $23.1 million in the quarter, up 17%, and $67.7 million for the first nine months, up 11%. Gross margin was 63.8%, down 3.4 percentage points, and nine-month gross margin was 66.8%, down 1.9 percentage points. Management attributes the margin pressure to growth in time and attendance solutions and related hardware sales. The revenue mix shifted as hardware and professional services grew faster than recurring revenue, though recurring revenue remained the largest piece of the business.
The operating loss narrowed to $3.5 million, an increase of 3.4% in operating income from the prior-year quarter. Operating margin was negative 9.7%, up 2.7 percentage points. For the first nine months, operating loss widened to $10.2 million, and operating margin was negative 10.0%, down 0.8 percentage points. Net loss widened to $5.4 million, and diluted loss per share widened to $0.19. Nine-month net loss widened to $13.9 million, and diluted loss per share widened to $0.51. On a non-GAAP basis, adjusted EBITDA rose to $8.1 million in the quarter and $20.7 million for the nine months. EBITDA was $3.9 million. Non-GAAP gross profit was $25.4 million at a 70% margin. These non-GAAP measures exclude share-based compensation, depreciation, amortization, interest, taxes, and one-time items.
Cash generation improved. Operating cash flow was $5.77 million in the quarter, up 335.7%. Nine-month operating cash flow was $10.92 million. Capital expenditures were $0.12 million in the quarter, down 28.7%, and $0.52 million for the nine months, down 5.7%. Deferred revenue, current portion, was $7.09 million, up 134.1%. Remaining performance obligations were $84.70 million, up 25.8%.
Operationally, the company launched Asure Central, a unified client platform that consolidates payroll, HR, time and attendance, recruiting, tax management, compliance, and pay card into one secure system. Management said payroll, benefits, applicant tracking, time and attendance, and payroll tax management all contributed to growth. Asure serves more than 100,000 clients, with about 20% direct and the rest indirect through reseller partners. On July 1, 2025, the company acquired Lathem Time, adding cloud-based time and attendance solutions and a new customer base. During the third quarter, Asure also completed two customer relationship asset acquisitions for a total purchase price of $11.2 million. These deals support cross-selling and scale, but they also raise integration and amortization costs.
Management guides fourth-quarter 2025 adjusted EBITDA to $10.0 million to $12.0 million. For full-year 2025, the adjusted EBITDA margin guidance range is 22% to 23%. For full-year 2026, the adjusted EBITDA margin guidance range is 23% to 25%. Revenue guidance was also provided for the fourth quarter of 2025 and for the full year 2026. The company faces risks tied to material weaknesses, security breaches, privacy and money transmitter regulations, client funds held in trust, acquisition integration, and debt service. The MidCap Loan Agreement increased interest costs, and GAAP profitability remains negative. Management also flagged seasonality, with first-quarter revenue and margins generally higher because of annual W-2 and ACA form processing.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $36.3M | $30.1M | +20.3% | $29.3M | +23.7% |
| Gross profit | $23.1M | $19.9M | +16.2% | $19.7M | +17.4% |
| Gross margin | 63.8% | 66.1% | -2.3 pp | 67.2% | -3.4 pp |
| Research & development | $1.2M | $1.3M | -7.8% | $2.0M | -40.5% |
| Sales & marketing | $9.0M | $8.1M | +11.0% | $6.7M | +35.4% |
| General & administrative | $11.7M | $11.0M | +6.3% | $10.4M | +12.3% |
| Total operating expenses | $26.6M | $24.6M | +8.5% | $23.3M | +14.2% |
| Operating income (loss) | -$3.5M | -$4.7M | +24.8% | -$3.6M | +3.4% |
| Operating margin | -9.7% | -15.4% | +5.8 pp | -12.4% | +2.7 pp |
| Net income (loss) | -$5.4M | -$6.1M | +12.4% | -$3.9M | -37.5% |
| Net margin | -14.8% | -20.3% | +5.5 pp | -13.3% | -1.5 pp |
| Diluted EPS | -$0.19 | -$0.22 | +$0.03 | -$0.15 | -$0.04 |
Risks
The company entered a Credit, Security and Guaranty Agreement with MidCap Financial Trust, with up to $60.0 million borrowed and fully funded as of June 30, 2025. Interest expense rose to $1,966 in FY2025 Q3 from $274 in FY2024 Q3 and to $3,226 year to date from $662, while net loss widened to $5.36 million in FY2025 Q3 from $3.90 million in FY2024 Q3, raising refinancing and default risk if cash flow cannot service debt.
Gross margin decreased to 63.8% in FY2025 Q3 from 67.2% in FY2024 Q3 and to 66.8% year to date from 68.7%, primarily due to growth in time and attendance solutions and hardware sales. Recurring revenue also fell to over 88% of total revenue in the quarter from 98% in the prior-year quarter.
The MidCap Loan Agreement contains restrictive covenants that limit dividends, require compliance with leverage ratios and other financial maintenance tests, and restrict proceeds to permitted acquisitions, which could reduce financial flexibility and future financing options.
Recent increases in tariffs and new trade restrictions may significantly increase cost of sales for Time and Attendance products, and the company may not be able to mitigate these costs through pricing changes or alternative sourcing.
Sales and marketing expenses increased 35% in FY2025 Q3 and 20% year to date, driven in part by an increase in bad debt, which may signal rising customer credit risk or collection challenges.
The company completed the Lathem acquisition on July 1, 2025 and two customer relationship asset acquisitions in FY2025 Q3 for $11,227, with a subsequent acquisition for $1,146. Amortization expense rose 11% in FY2025 Q3 and 12% year to date due to the continuing acquisitions strategy, increasing integration, dilution, and impairment risk.
SaaS KPIs
All quarters →Non-GAAP gross margin
Adjusted EBITDA margin
Adjusted EBITDA
Recurring Revenue
EBITDA
EBITDA margin
Non-GAAP gross profit
Recurring Revenue as % of Total Revenue
Total customers
Summary, forecast, risks and KPIs are extracted from ASURE SOFTWARE INC's SEC filings for Q3 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 2, 2026.