Summary
Asure Software closed fiscal 2025 with a fourth quarter that turned profitable on a GAAP basis. Net income was $0.76 million, up from the prior-year quarter and swinging to a profit. Operating income was $1.76 million, also up from the prior-year quarter and swinging to a profit. Gross profit was $27.21 million, up 30.0% from the prior-year quarter. For the full year, the picture was mixed. Net loss was $13.13 million, down from the prior-year period with the loss widening. Operating loss was $8.41 million, up from the prior-year period as the loss narrowed. Diluted EPS for the full year was -$0.48, down from the prior-year period with the loss widening. Full-year gross profit was $94.87 million, up 15.5%.
Cash generation strengthened. Operating cash flow, not free cash flow, was $11.29 million for the quarter, up 15.5% from the prior-year quarter. Full-year operating cash flow was $22.22 million, up 136.7% from the prior-year period. Capital expenditures were $0.27 million for the quarter, up 86.3% from the prior-year quarter. Full-year capital expenditures were $0.79 million, up 13.7% from the prior-year period. The current portion of deferred revenue was $11.62 million, up 39.0% from the prior-year quarter. Remaining performance obligations were $99.65 million, up 26.0% from the prior-year quarter. These indicators point to a business with improving cash collection and a larger backlog of contracted work.
Non-GAAP measures showed similar momentum. Adjusted EBITDA rose 82% to $11.4 million for the quarter from $6.2 million. Full-year adjusted EBITDA was $32.0 million versus $22.5 million. EBITDA was $8.7 million for the quarter versus $3.4 million. Non-GAAP gross profit was $29.4 million for the quarter with a 75% margin versus $22.5 million with a 73% margin. Full-year non-GAAP gross profit was $103.0 million with a 73% margin versus $88.2 million with a 74% margin. On the operational side, Asure Central has more than two thirds of clients upgrading since its October launch. The number of customers buying multiple products in the payroll business grew 10% in the fourth quarter over the prior year. As of December 31, 2025, Asure had more than 100,000 clients, with approximately 35% being direct. The company also appointed Mike Eralie as Senior Vice President of Operations. Asure provides cloud-based HCM software, including payroll and tax filing, HR management, time and attendance, recruiting, and benefits administration. It sells directly and through Reseller Partners. The MD&A notes that first quarter revenues and margins are generally higher than in subsequent quarters due to W-2 and ACA form filings, and fourth quarter revenues often benefit from unscheduled payroll runs.
Guidance points to continued growth. For the first quarter of 2026, management guided revenue of $41.0 million to $43.0 million and adjusted EBITDA of $10.0 million to $11.0 million. For full year 2026, it guided revenue of $159.0 million to $162.0 million and an adjusted EBITDA margin of 23% to 25%. Management said organic growth should improve in 2026 as attach rates rise and sales and marketing investment increases. Risks remain. The 10-K lists cybersecurity breaches, competition in HCM, reliance on client funds held in trust, money transmitter status, interest rate and liquidity risk on client funds, acquisition integration, impairment of intangible assets, third-party service providers, AI adoption, and the expiration of Employee Retention Tax Credits and related regulatory measures. The company also faces risks related to potential financing needs, access to additional capital, volatility in bank and capital markets, privacy laws, money service and money transmitter business status, interruptions in services or web hosting, internal control weaknesses, litigation, and stockholder actions. The MidCap loan agreement allows borrowing up to $60.0 million, matures April 1, 2030, and bears interest at Term SOFR plus 5.00% with a SOFR floor of 2.00%. The rate was 9.25% as of December 31, 2025. Asure must maintain a Total Leverage Ratio no greater than 5.50 to 1.00 and minimum liquidity of $10.0 million, and it was in compliance as of December 31, 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Gross profit | $27.2M | $23.1M | +17.6% | $20.9M | +30.0% |
| Research & development | $1.1M | $1.2M | -4.3% | $2.1M | -46.6% |
| Sales & marketing | $8.0M | $9.0M | -11.6% | $6.9M | +15.1% |
| General & administrative | $11.3M | $11.7M | -3.0% | $9.9M | +13.8% |
| Total operating expenses | $25.5M | $26.6M | -4.5% | $23.4M | +8.7% |
| Operating income (loss) | $1.8M | -$3.5M | +150.2% | -$2.5M | +170.5% |
| Net income (loss) | $757.0K | -$5.4M | +114.1% | -$3.2M | +123.6% |
| Diluted EPS | $0.03 | -$0.19 | +$0.22 | -$0.12 | +$0.15 |
Risks
New risk that AI and automation may reduce customers' workforce sizes and therefore recurring revenue tied to employee, transaction, or payroll volume. Recurring revenue was over 91% of total revenue for FY2025, down from 96% for FY2024, so headcount-driven demand shifts are material.
Net loss was $13,126 for FY2025, an increase of $1,353 from the prior-year loss of $11,773, and the FY2025 year-to-date loss widened by $1.35M, or 11.5%, versus FY2024 year to date. At December 31, 2025, accumulated deficit was $320.4M, and management expects continued operating losses.
The MidCap Loan Agreement provided up to $60,000, all funded as of June 30, 2025, with interest at 9.25% as of December 31, 2025; FY2025 interest expense rose to $5,056 from $1,024 in FY2024. Covenants include a Total Leverage Ratio no greater than 5.50 to 1.00 and minimum liquidity of $10,000.
Payroll processing and money movement subject the company to federal and state money service business, money transmitter, and payroll processor laws, with FinCEN registration and state licenses. Examinations could result in fines, penalties, or loss of licenses, and insurance brokerage and TPA operations require licenses in all 50 states and the District of Columbia.
Asure's HCM platform collects and stores sensitive personal, payroll, and HIPAA-protected health data, making it a target for cyberattacks. A breach or unauthorized access could disrupt services, damage the brand, trigger regulatory actions, and cyber liability insurance may be inadequate.
The company is integrating AI across its HCM platform and internal operations, with risks of inaccurate or biased outputs, reliance on third-party models, and evolving AI regulation. Governance and human oversight may not prevent errors, misuse, or compliance issues.
2025 investing activities included $53,166 paid for business combinations or asset acquisitions, primarily Lathem, and the company expects to continue acquiring Reseller Partner businesses and complementary assets. Integration, unknown liabilities, and dilution risks are elevated.
Key Time and Attendance components come from limited or single suppliers with no guaranteed supply arrangements, exposing the company to shortages, tariffs, and trade restrictions. Professional services, hardware and other revenue increased 149% to $13,253 for FY2025, raising dependence on this hardware supply.
Significant accounts receivable remains from Employee Retention Tax Credit processing under the CARES Act, with deferred payment arrangements tied to customers' future receipt of credits. The IRS could challenge filings or calculations, creating collection uncertainty and potential penalties.
Goodwill and identifiable intangible assets were approximately 38% of total assets as of December 31, 2025, and the acquisition strategy may add more. A future impairment could materially affect earnings, though the December 31, 2025 annual assessment found no impairment.
The company identified a material weakness in internal control over financial reporting for the year ended December 31, 2024, and although remediated, it cannot assure additional material weaknesses will not occur. Future deficiencies could lead to misstatements, regulatory scrutiny, or loss of stakeholder confidence.
Client funds held in trust are invested in marketable securities and cash equivalents and are subject to market, interest rate, credit, and liquidity risks. Loss or inability to access these funds could require additional liquidity and materially affect financial condition.
SaaS KPIs
All quarters →Non-GAAP gross margin
Adjusted EBITDA margin
Adjusted EBITDA
Recurring Revenue
EBITDA
EBITDA margin
Non-GAAP gross profit
Total Clients
Summary, forecast, risks and KPIs are extracted from ASURE SOFTWARE INC's SEC filings for Q4 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.