8-K: Asure Software Reports Strong Q2 Revenue Growth, Raises Full-Year Guidance Following Strategic Acquisition

Asure Software, Inc. announced its second quarter 2025 financial results, reporting a 7% increase in total revenue and raising its full-year 2025 revenue guidance, driven by solid performance and the recent acquisition of Lathem Time.

Summary

• Total revenues for the second quarter ended June 30, 2025, increased 7% year-over-year to $30.1 million, or 10% excluding ERTC revenue.
• Recurring revenues grew 6% from the prior year to $28.6 million.
• Net loss for Q2 2025 was $6.1 million, compared to a net loss of $4.4 million in the prior year second quarter.
• EBITDA for Q2 2025 was $1.4 million, up from $1.3 million in the prior year second quarter.
• Adjusted EBITDA for Q2 2025 was $5.2 million, an increase from $4.1 million in the prior year second quarter.
• Gross profit for Q2 2025 was $19.9 million, up from $18.9 million in the prior year second quarter.
• Non-GAAP gross profit was $21.9 million (73% margin) for Q2 2025, consistent with the 73% margin in the prior year.
• First half 2025 revenue reached $65.0 million, up 9% from the prior year first half, or 11% excluding ERTC revenue.
• First half 2025 recurring revenue was $61.8 million, up 8% from the prior year first half.
• Net loss for the first half 2025 was $8.5 million, compared to $4.7 million in the prior year first half.
• Adjusted EBITDA for the first half 2025 was $12.6 million, up from $10.9 million in the prior year first half.
• Asure acquired Lathem Time for $39.5 million on July 1, 2025, enhancing its cloud-based time and attendance solutions.
• The company increased its full-year 2025 revenue guidance range to $138.0 million $142.0 million, up from the prior range of $134.0 million $138.0 million.
• Third quarter 2025 revenue guidance is set at $35.0 million $37.0 million.
• Full-year 2025 Adjusted EBITDA guidance is 22% 24%.

Sentiment

Score: 7

Explanation: The sentiment is generally positive due to strong revenue growth, improved adjusted EBITDA, a strategic acquisition, and an increase in full-year revenue guidance. The increased net loss is a negative, but the forward-looking indicators and operational improvements suggest a positive trajectory.

Positives

• Total revenues increased 7% year-over-year to $30.1 million in Q2 2025, demonstrating continued growth.
• Excluding ERTC revenue, Q2 2025 revenue growth was 10% year-over-year, indicating strong core business performance.
• Recurring revenues grew 6% from the prior year to $28.6 million, highlighting a stable and growing revenue base.
• Adjusted EBITDA increased significantly to $5.2 million in Q2 2025 from $4.1 million in Q2 2024, showing improved operational profitability.
• The acquisition of Lathem Time on July 1, 2025, for $39.5 million is expected to add high-margin recurring revenue and accelerate cross-selling opportunities for HCM products.
• Full-year 2025 revenue guidance was increased to $138.0 million $142.0 million, reflecting positive momentum and the impact of the Lathem Time acquisition.
• Gross profit and Non-GAAP gross profit both increased year-over-year, with Non-GAAP gross margin remaining strong at 73%.

Negatives

• Net loss increased to $6.1 million in Q2 2025 from $4.4 million in Q2 2024.
• Net loss for the first half of 2025 increased to $8.5 million from $4.7 million in the prior year first half.
• EBITDA for the first half of 2025 slightly decreased to $5.6 million from $5.7 million in the prior year first half.

Risks

• Breaches of security measures.
• Possible fluctuations in financial and operating results.
• Privacy concerns and laws and other regulations may limit the effectiveness of applications.
• The financial and other impact of any previous and future acquisitions.
• Domestic and international regulatory developments, including changes to or applicability to the business of privacy and data securities laws, money transmitter laws and anti-money laundering laws.
• Regulatory pressures on economic relief enacted as a result of the COVID-19 pandemic that change or cause different interpretations with respect to eligibility for such programs.
• Risk of software and solutions not functioning adequately.
• Interruptions, delays or changes in services or Web hosting.
• Potential debt incurred to meet future capital requirements.
• Volatility and weakness in bank and capital markets; access to additional capital.
• Significant costs as a result of operating as a public company.
• The expiration of Employee Retention Tax Credits (ERTC) and the impact of the Internal Revenue Service recent measures regarding ERTC claims and the corresponding cash collections of existing receivables.
• The inability to continue to release timely updates for changes in laws.
• The inability to develop new and improved versions of services and technological developments.
• Customers nonrenewal of their agreements and other similar changes could negatively impact revenue, operating results and financial conditions.
• The exposure of market, interest, credit and liquidity risk on client funds held in trust.
• Operations in highly competitive markets.
• Risk that clients could have insufficient funds that could result in limitations in the ability to transmit ACH transactions.
• Impairment of intangible assets.
• Litigation and any related claims, negotiations and settlements, including with respect to intellectual property matters or industry-specific regulations.
• Various financial aspects of the Software-as-a-Service model.
• Adverse effects to the business as a result of claims, lawsuits, and other proceedings.
• Issues in the use of artificial intelligence in HCM products and services.
• Adverse changes to financial accounting standards.
• Inability to maintain third-party licensed software.
• Evolving regulation of the Internet, changes in the infrastructure underlying the Internet or interruptions in Internet.
• Factors affecting deferred tax assets and ability to value and utilize them.
• The nature of the business model.
• Inability to adopt new or correctly interpret existing money service and money transmitter business status.
• Ability to hire, retain and motivate employees and manage growth.
• Interruptions to supply chains and extended shut down of businesses.
• Potential enactment of adverse tax laws, regulation, political, economic and social factors.
• Potential sales of a substantial number of shares of common stock along with its volatility.
• Risks associated with potential equity-related transactions including dividends, rights under the stockholder plan to discourage certain actions and other impacts as a result of actions of stockholders.

Future Outlook

The company provides revenue guidance for the third quarter of 2025 in the range of $35.0 million to $37.0 million. It also increased its full-year 2025 revenue guidance range to $138.0 million $142.0 million, up from the prior range of $134.0 million $138.0 million. Full-year 2025 Adjusted EBITDA guidance is maintained at 22% 24%. The company believes its continued positive momentum, technology investments, and recent acquisitions position it well for continued growth.

Management Comments

• "We are pleased to report another solid performance for the second quarter where our revenues of $30.1 million increased 7% from the prior year second quarter and excluding the impact of ERTC, revenue growth was 10%."
• "Our results were driven by continued strong performances coming from our Payroll Tax Management product line and improving attach rates of our HCM products."
• "We are excited to have completed the acquisition of Lathem Time Corporation on July 1, 2025 which we believe will be a great addition to the Asure product offering."
• "The acquisition is expected to add to the scale of our existing time and attendance business with additional high margin recurring revenue and drive the ability to accelerate further cross-selling opportunities of Asures suite of HCM products."
• "Our continued positive momentum, the investments we have made in our technology plus recently acquired products we believe position us well for the continued growth of Asure."

Industry Context

Asure Software operates in the highly competitive Human Capital Management (HCM) software solutions industry, providing cloud-based services including HR, payroll, time and attendance, and benefits administration. The acquisition of Lathem Time, a century-old time and attendance solutions provider, aligns with the industry trend of consolidation and expansion of integrated HCM platforms. This move strengthens Asure's position in the time and attendance segment and enhances its ability to cross-sell a broader suite of HCM products, catering to the growing demand for comprehensive, cloud-based solutions for businesses of all sizes.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess performance against global benchmarks.

Stakeholder Impact

• Shareholders: Potential positive impact due to revenue growth, increased guidance, and strategic acquisition, which could lead to increased share value.
• Employees: Potential for integration and expansion opportunities following the Lathem Time acquisition.
• Customers: Expanded product offerings, particularly in time and attendance, and potential for more integrated HCM solutions.
• Creditors: The company incurred additional notes payable, indicating increased debt, which could impact creditors depending on the terms and company's ability to service debt.

Next Steps

• Asure management will host a conference call on Thursday, July 31, 2025, at 3:30 pm Central (4:30 pm Eastern) to discuss the results.
• The company will continue to integrate the Lathem Time acquisition to realize expected high-margin recurring revenue and cross-selling opportunities.
• The company will focus on achieving its increased full-year 2025 revenue guidance of $138.0 million $142.0 million and Adjusted EBITDA guidance of 22% 24%.

Key Dates

Recommendation

The company demonstrated solid revenue growth, particularly excluding ERTC, and significantly improved its Adjusted EBITDA. The strategic acquisition of Lathem Time is a positive move expected to contribute to high-margin recurring revenue and cross-selling. Most notably, the company raised its full-year revenue guidance, signaling strong confidence in future performance. While net loss increased, the overall operational and strategic trajectory, coupled with positive forward-looking guidance, suggests a favorable outlook for investors.

Keywords

Human Capital Management, HCM software, Payroll, Time and Attendance, Benefits Administration, Payroll Tax Management, Talent Management, Cloud-based solutions, Software-as-a-Service, Acquisition, Lathem Time, Financial results, Revenue guidance, EBITDA, Recurring revenue, ASUR