ASURE SOFTWARE INC
For the period ended Sep 30, 2025. Filed Oct 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 30, 2025
ASUR$9.65+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000884144-25-000088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001628280-25-047524
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 78 current paragraphs.
38 unchanged; 32 reworded; 8 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
During the three months ended September 30, 2025, we completed two customer relationship asset acquisitions as part of our ongoing acquisition strategy. The total purchase price of these acquisitions was $11,227, which consisted of $8,252 of cash paid during the three months ended September 30, 2025, $173 of cash to be paid over the next 12 months, the delivery of promissory notes in the amount of $1,896, net of discounts, and the delivery of 124 shares of Asure common stock, which had an aggregate fair value of $956 at the acquisition dates. The purchase price for one acquisition is subject to an adjustment for contingent events which are generally expected to occur over the next one to two years, including revenue generated from the acquired assets.
Current report
Subsequent to September 30, 2025, but before the filing of the financial statements, we completed a customer relationship asset acquisition. The total purchase price of this acquisition was $1,146, which consisted of $700 of cash paid at close and the delivery of a promissory note in the amount of $446, net of discount.
Current report
Recurring revenue for the three months ended September 30, 2025, was $31,841, an increase of $3,215, or 11%, from $28,626 for the three months ended September 30, 2024. The increase is primarily due to an increase in time and attendance solutions.
Current report
Professional services, hardware and other revenue for the three months ended September 30, 2025, was $4,411, an increase of $3,733, or 551%, from $678 for the three months ended September 30, 2024. This increase is primarily due to an increase in hardware related to our time and attendance solutions.
Current report
Professional services, hardware, and other revenue for the nine months ended September 30, 2025, was $7,606, an increase of $4,556, or 149%, from $3,050 for the nine months ended September 30, 2024. The increase is primarily due to an increase in professional services and our time and attendance solutions.
Current report
Sales and marketing expenses for the nine months ended September 30, 2025, were $25,578, an increase of $4,207, or 20%, from $21,371 for the nine months ended September 30, 2024. The increase is primarily due to an increase in bad debt and headcount resulting in an increase in salaries and wages. Sales and marketing expenses as a percentage of revenue increased to 25% for the nine months ended September 30, 2025, from 24% for the same period in 2024.
Current report
Other Income, Net
Current report
After September 30, 2025, but before the filing of the financial statements, we repaid two subordinated promissory notes having maturity dates during such period, as well as a partial prepayment of one subordinated promissory note, having an original maturity date of July 1, 2029, reducing the principal balance of such note to $1,000. As of October 30, 2025, the combined outstanding principal balance of our subordinated promissory notes is $10,275.
Removed paragraphs (6)
Previous report
Recurring revenue for the six months ended June 30, 2025 was $61,783, an increase of $4,459, or 8%, from $57,324 for the six months ended June 30, 2024. The increase is primarily due to an increase in tax management solutions.
Previous report
Professional services, hardware and other revenue increased $535, or 54%, for the three months ended June 30, 2025 from the similar period in 2024, primarily due to an increase in professional services, offset with a decrease in non-recurring ERTC revenue. Refer to “Risk Factors” previously disclosed in our Annual Report on Form 10-K, filed with the SEC on March 6, 2025, for more information about risks related to our ERTC business.
Previous report
Professional services, hardware, and other revenue increased $823, or 35%, for the six months ended June 30, 2025 from the similar period in 2024, primarily due to a an increase in professional services.
Previous report
Sales and marketing expenses for the six months ended June 30, 2025 were $16,535, an increase of $1,844, or 13%, from $14,691 for the six months ended June 30, 2024. The increase is primarily due to an increase in referral fees associated with non-recurring ERTC revenue arrangements. Sales and marketing expenses as a percentage of revenue remained flat at 25% for the six months ended June 30, 2025 and 2024.
Previous report
Other (Expense) Income, Net
Previous report
During July 2025, we entered a Limited Consent, Amendment No. 1, and Joinder to the Loan Agreement and Amendment No. 2 of the Loan Agreement (the “Amendments”). The Amendments, collectively, resulted in an increase in our minimum liquidity threshold from $6,000 (10.00% of the outstanding balance under the Loan Agreement) to $10,000. In addition, we agreed with the Lenders to increase the final payment fee paid to the Lenders at the time of final payment under the loan from 1.00% to 2.00% of the amount advanced thereunder except in the case of a refinance of the loan with MidCap and the Lenders, in which case, the unaccrued portion of that fee would be waived. Furthermore, Lathem joined the Loan Agreement as Guarantor and the Lenders consented to the Lathem transaction.
Reworded paragraphs (32)
Previous wording
This Quarterly Report on Form 10-Q contains certain statements made by management that may constitute “forward-looking” statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements about our financial results may include expected or projected U.S GAAP and other operating and non-operating results. The words “believe,” “may,” “will,” “estimate,” “projects,” “anticipate,” “intend,” “expect,” “should,” “plan,” and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include statements we make regarding our operating performance, future results of operations and financial position, revenue growth, earnings or other projections. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions, over many of which we have no control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include—but are not limited to—risks associated with breaches of our security measures; risks related to material weaknesses; possible fluctuations in our financial and operating results; privacy concerns and laws and other regulations may limit the effectiveness of our applications; the financial and other impact of any previous and future acquisitions; domestic and international regulatory developments, including changes to or applicability to our 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 our software and solutions not functioning adequately; interruptions, delays or changes in our services or our 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 our services and technological developments; customer’s nonrenewal of thei…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q contains certain statements made by management that may constitute “forward-looking” statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements about our financial results may include expected or projected U.S GAAP and other operating and non-operating results. The words “believe,” “may,” “will,” “estimate,” “projects,” “anticipate,” “intend,” “expect,” “should,” “plan,” and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include statements we make regarding our operating performance, future results of operations and financial position, revenue growth, earnings or other projections. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions, over many of which we have no control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include—but are not limited to—risks associated with breaches of our security measures; risks related to material weaknesses; possible fluctuations in our financial and operating results; privacy concerns and laws and other regulations that may limit the effectiveness of our applications; the financial and other impact of any previous and future acquisitions; domestic and international regulatory developments, including tarriffs, changes to or applicability to our business of privacy and data securities laws, money transmitter laws, laws related to earned wage access 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 our software and solutions not functioning adequately; interruptions, delays or changes in our services or our 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 recent regulatory and other measures by governmental authorities 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 our…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The following review of Asure’s financial position as of June 30, 2025 and December 31, 2024, and results of operations for the three and six months ended June 30, 2025 and 2024 should be read in conjunction with our 2024 Annual Report on Form 10-K filed with the SEC on March 6, 2025. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available through the investor relations page of our internet website free of charge as soon as reasonably practicable after they are electronically filed, or furnished to, the SEC. Asure’s internet website and the information contained in our website or connected to our website are not incorporated into this Quarterly Report on Form 10-Q. However, we do post information on the investor relations page of our website that we believe may be of interest to our investors. Asure’s internet website address is www.asuresoftware.com.
Current wording
The following review of Asure’s financial position as of September 30, 2025, and December 31, 2024, and results of operations for the three and nine months ended September 30, 2025 and 2024, should be read in conjunction with our 2024 Annual Report on Form 10-K filed with the SEC on March 6, 2025 and our quarterly reports filed with the SEC on May 1, 2025, and July 31, 2025. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available through the investor relations page of our internet website free of charge as soon as reasonably practicable after they are electronically filed, or furnished to, the SEC. Asure’s internet website and the information contained in our website or connected to our website are not incorporated into this Quarterly Report on Form 10-Q. However, we do post information on the investor relations page of our website that we believe may be of interest to our investors. Asure’s internet website address is www.asuresoftware.com.
Previous wording
We are a provider of cloud-based Human Capital Management (“HCM”) software solutions delivered as Software-as-a-Service (“SaaS”) to businesses of all sizes. We offer human resources (“HR”) tools necessary to build a thriving workforce, provide the resources to stay compliant with dynamic federal, state, and local tax jurisdictions and their respective labor laws, freeing cash flows so these businesses can spend their financial capital on growing their businesses rather than administrative overhead that can impede growth. Our solutions also provide new ways for employers to connect with their employees and strengthen relationships with their talent. At the core of our offering is the Asure HCM platform—a SaaS-based system that includes Payroll & Tax filing, Recruiting, Time & Attendance software, HR management tools, and Benefits Administration. This platform serves as the foundation for delivering both our core software and a range of complementary, technology-enabled services. These include AsureMarketplace™, which automates data exchange between our HCM system and third-party providers to increase efficiency, accuracy, and breadth of services. Our HR Compliance services combine expert guidance with scalable digital delivery. AsurePay™, our payroll card, provides employees with fast, secure access to earned wages. Additionally, through our licensed brokerage, we offer Insurance Services that help employers manage benefits and reduce administrative costs. We deliver our solutions directly and through a national network of Reseller Partners.
Current wording
We are a provider of cloud-based Human Capital Management (“HCM”) software solutions delivered as Software-as-a-Service (“SaaS”) to businesses of all sizes. We offer human resources (“HR”) tools necessary to build a thriving workforce, provide the resources to stay compliant with dynamic federal, state, and local tax jurisdictions and their respective labor laws, freeing cash flows so these businesses can spend their financial capital on growing their businesses rather than administrative overhead that can impede growth. Our solutions also provide new ways for employers to connect with their employees and strengthen relationships with their talent. At the core of our offering is the Asure HCM platform—a SaaS-based system that includes Payroll & Tax filing, Recruiting, Time & Attendance software, HR management tools, and Benefits Administration. This platform serves as the foundation for delivering both our core software and a range of complementary, technology-enabled services. These include AsureMarketplace™, which automates data exchange between our HCM system and third-party providers to increase efficiency, accuracy, and breadth of services. Our HR Compliance services combine expert guidance with scalable digital delivery. AsurePay™, our payroll card, which we provide in association with our partners, offers employees fast, secure access to earned wages. Additionally, through our licensed brokerage, we offer Insurance Services that help employers manage benefits and reduce administrative costs. We deliver our solutions directly and through a national network of Reseller Partners.
Previous wording
Revenue is comprised of recurring revenue, professional services, hardware, and other revenue. We expect our revenue to increase as we introduce new applications, expand our client base and renew and expand relationships with existing clients. As a percentage of total revenue, we expect our mix of recurring revenue, and professional services, hardware and other revenue to remain relatively constant. While revenue mix varies by product, recurring revenue consistently represented over 95% of total revenue in the three and six months ended June 30, 2025, compared to 96% in the three and six months ended June 30, 2024.
Current wording
Revenue is comprised of recurring revenue, professional services, hardware, and other revenue. We expect our revenue to increase as we introduce new applications, expand our client base and renew and expand relationships with existing clients. As a percentage of total revenue, we expect our mix of recurring revenue, and professional services, hardware and other revenue to remain relatively constant. While revenue mix varies by product, recurring revenue represented over 88% and 92% of total revenue in the three and nine months ended September 30, 2025, respectively, compared to 98% and 97% in the three and nine months ended September 30, 2024, respectively. This decrease was due to the increase in hardware sales as a result of time and attendance business growth.
Previous wording
Recurring revenue for the three months ended June 30, 2025 was $28,596, an increase of $1,545, or 6%, from $27,051 for the three months ended June 30, 2024. The increase is primarily due to an increase in tax management solutions.
Current wording
Recurring revenue for the nine months ended September 30, 2025, was $93,624, an increase of $7,674, or 9%, from $85,950 for the nine months ended September 30, 2024. The increase is primarily due to an increase in tax management solutions and time and attendance solutions.
Previous wording
Professional Services, Hardware and Other Revenues represents implementation fees, one-time consulting projects, on-premise maintenance, hardware devices to enhance our software products as well as ERTC revenues that are transactional in nature.
Current wording
Professional Services, Hardware and Other Revenues represents implementation fees, one-time consulting projects, on-premise maintenance, hardware devices to enhance our software products.
Previous wording
Consolidated gross profit for the three months ended June 30, 2025, was $19,911, an increase of $1,043, or 6%, from $18,868 for the three months ended June 30, 2024. Gross profit as a percentage of revenue decreased to 66% for the three months ended June 30, 2025 from 67% for the same period in 2024.
Current wording
Consolidated gross profit for the three months ended September 30, 2025, was $23,142, an increase of $3,438, or 17%, from $19,704 for the three months ended September 30, 2024. Gross profit as a percentage of revenue decreased to 64% for the three months ended September 30, 2025, from 67% for the same period in 2024. The decrease is primarily attributable to the growth in our time and attendance solutions.
Previous wording
Consolidated gross profit for the six months ended June 30, 2025, was $44,519, an increase of $3,044, or 7%, from $41,475 for the six months ended June 30, 2024. Gross profit as a percentage of revenue remained flat at 69% for the six months ended June 30, 2025 and 2024.
Current wording
Consolidated gross profit for the nine months ended September 30, 2025, was $67,661, an increase of $6,482, or 11%, from $61,179 for the nine months ended September 30, 2024. Gross profit as a percentage of revenue decreased to 67% for the nine months ended September 30, 2025, from 69% for the same period in 2024. The decrease is primarily attributable to the growth in our time and attendance solutions.
Previous wording
Sales and marketing expenses for the three months ended June 30, 2025 were $8,149, an increase of $1,225, or 18%, from $6,924 for the three months ended June 30, 2024. The increase is primarily due to an increase in headcount resulting in an increase in salaries and wages. Sales and marketing expenses as a percentage of revenue increased to 27% for the three months ended June 30, 2025 from 25% for the same period in 2024.
Current wording
Sales and marketing expenses for the three months ended September 30, 2025, were $9,043, an increase of $2,363, or 35%, from $6,680 for the three months ended September 30, 2024. The increase is primarily due to an increase in bad debt and headcount resulting in an increase in salaries and wages. Sales and marketing expenses as a percentage of revenue increased to 25% for the three months ended September 30, 2025, from 23% for the same period in 2024.
Previous wording
General and administrative expenses for the six months ended June 30, 2025 were $22,868, an increase of $2,687, or 13%, from $20,181 for the six months ended June 30, 2024. The increase is primarily attributable to an increased personnel compensation expenses along with higher service costs associated with regulatory compliance and customer relationship acquisitions. General and administrative expenses as a percentage of revenue increased to 35% for the six months ended June 30, 2025 compared to 34% for the same period in 2024.
Current wording
General and administrative expenses for the three months ended September 30, 2025, were $11,655, an increase of $1,277, or 12%, from $10,378 for the three months ended September 30, 2024. The increase is primarily attributable to increased personnel compensation expenses along with higher service costs associated with regulatory compliance and our acquisitions. General and administrative expenses as a percentage of revenue decreased to 32% for the three months ended September 30, 2025, from 35% for the same period in 2024.
Previous wording
General and administrative expenses for the three months ended June 30, 2025 were $10,968, an increase of $850, or 8%, from $10,118 for the three months ended June 30, 2024. The increase is primarily attributable to increased personnel compensation expenses along with higher service costs associated with regulatory compliance and customer relationship acquisitions. General and administrative expenses as a percentage of revenue remained flat at 36% for the three months ended June 30, 2025 and 2024.
Current wording
General and administrative expenses for the nine months ended September 30, 2025, were $34,523, an increase of $3,964, or 13%, from $30,559 for the nine months ended September 30, 2024. The increase is primarily attributable to an increased personnel compensation expenses along with higher service costs associated with regulatory compliance and our acquisitions. General and administrative expenses as a percentage of revenue remained flat at 34% for the nine months ended September 30, 2025 and 2024.
Previous wording
R&D expenses for the three months ended June 30, 2025 were $1,273, a decrease of $689, or 35%, from $1,962 for the three months ended June 30, 2024. The decrease is primarily attributable to an increase in capitalization of software development expenses driven by continued investments in the development of our products, partially offset by an increase in personnel compensation expenses. R&D expenses as a percentage of revenue decreased to 4% for the three months ended June 30, 2025 from 7% for the same period in 2024.
Current wording
R&D expenses for the three months ended September 30, 2025, were $1,174, a decrease of $799, or 40%, from $1,973 for the three months ended September 30, 2024. The decrease is primarily attributable to an increase in capitalization of software development expenses driven by continued investments in the development of our products, partially offset by an increase in personnel compensation expenses. R&D expenses as a percentage of revenue decreased to 3% for the three months ended September 30, 2025, from 7% for the same period in 2024.
Previous wording
R&D expenses for the six months ended June 30, 2025 were $3,302, a decrease of $429, or 11%, from $3,731 for the six months ended June 30, 2024. The decrease is primarily attributable to an increase in capitalization of software development expenses driven by continued investments in the development of our products, partially offset by an increase in personnel compensation expenses. R&D expenses as a percentage of revenue decreased to 5% for the six months ended June 30, 2025 from 6% for the same period in 2024.
Current wording
R&D expenses for the nine months ended September 30, 2025, were $4,476, a decrease of $1,228, or 22%, from $5,704 for the nine months ended September 30, 2024. The decrease is primarily attributable to an increase in capitalization of software development expenses driven by continued investments in the development of our products, partially offset by an increase in personnel compensation expenses. R&D expenses as a percentage of revenue decreased to 4% for the nine months ended September 30, 2025, from 6% for the same period in 2024.
Previous wording
Amortization expense for the three months ended June 30, 2025 was $4,173, an increase of $127, or 3%, from $4,046 for the three months ended June 30, 2024. The increase is primarily attributable to our continuing acquisitions strategy, with additional acquisitions occurring each quarter. Amortization expense as a percentage of revenue remained flat at 14% for the three months ended June 30, 2025 from 14% for the same period in 2024.
Current wording
Amortization expense for the three months ended September 30, 2025, was $4,769, an increase of $474, or 11%, from $4,295 for the three months ended September 30, 2024. The increase is primarily attributable to our continuing acquisitions strategy, with additional acquisitions occurring each quarter. Amortization expense as a percentage of revenue decreased to 13% for the three months ended September 30, 2025, from 15% for the same period in 2024.
Previous wording
Amortization expense for the six months ended June 30, 2025 was $8,481, an increase of $986, or 13%, from $7,495 for the six months ended June 30, 2024. The increase is primarily attributable to our continuing acquisitions strategy, with additional acquisitions occurring each quarter. Amortization expense as a percentage of revenue remained flat at 13% for the six months ended June 30, 2025 from 13% for the same period in 2024.
Current wording
Amortization expense for the nine months ended September 30, 2025, was $13,250, an increase of $1,460, or 12%, from $11,790 for the nine months ended September 30, 2024. The increase is primarily attributable to our continuing acquisitions strategy, with additional acquisitions occurring each quarter. Amortization expense as a percentage of revenue remained flat at 13% for the nine months ended September 30, 2025 and 2024.
Previous wording
Interest income for the three months ended June 30, 2025 was $277 compared to interest income of $261 for the three months ended June 30, 2024. Interest income as a percentage of revenue was 1% for the three months ended June 30, 2025 and 2024. Interest expense for the three months ended June 30, 2025 was $809 compared to interest expense of $208 for the three months ended June 30, 2024. Interest expense as a percentage of revenue was 3% for the three months ended June 30, 2025 compared to 1% for the three months ended June 30, 2024. The increase in Interest expense in the three months ended June 30, 2025 is primarily due to our new Loan Agreement (defined below) with MidCap Financial Trust (“MidCap”) during the quarter.
Current wording
Interest income for the three months ended September 30, 2025, was $250 compared to interest income of $165 for the three months ended September 30, 2024. Interest income as a percentage of revenue was 1% for the three months ended September 30, 2025 and 2024. Interest expense for the three months ended September 30, 2025 was $1,966 compared to interest expense of $274 for the three months ended September 30, 2024. Interest expense as a percentage of revenue was 5% for the three months ended September 30, 2025 compared to 1% for the same period in 2024. The increase in Interest expense in the three months ended September 30, 2025, is primarily related to interest accrued under our Loan Agreement (defined below) with MidCap Financial Trust (“MidCap”).
Previous wording
Interest income for the six months ended June 30, 2025 was $448 compared to interest income of $597 for the six months ended June 30, 2024. Interest income as a percentage of revenue was 1% for the three months ended June 30, 2025 and 2024. Interest expense for the six months ended June 30, 2025 was $1,260 compared to interest expense of $388 for the six months ended June 30, 2024. Interest expense as a percentage of revenue was 2% for the six months ended June 30, 2025 compared to 1% for the six months ended June 30, 2024. The increase in interest expense in the six months ended June 30, 2025 is primarily due to our new Loan Agreement with MidCap during the period.
Current wording
Interest income for the nine months ended September 30, 2025 was $698 compared to interest income of $762 for the nine months ended September 30, 2024. Interest income as a percentage of revenue was 1% for the three months ended September 30, 2025 and 2024. Interest expense for the nine months ended September 30, 2025 was $3,226 compared to interest expense of $662 for the nine months ended September 30, 2024. Interest expense as a percentage of revenue was 3% for the nine months ended September 30, 2025 compared to 1% for the same period in 2024. The increase in interest expense in the nine months ended September 30, 2025, is primarily related to interest accrued under our Loan Agreement with MidCap.
Previous wording
Other (expense) income, net for the three months ended June 30, 2025 was $96 of expense compared to $0 for the three months ended June 30, 2024. Other (expense) income, net as a percentage of revenue was negligible for the three months ended June 30, 2025 and 2024.
Current wording
Other income, net for the three months ended September 30, 2025 was $220 compared to $0 for the three months ended September 30, 2024. Other income, net as a percentage of revenue was 1% for the three months ended September 30, 2025, compared to a negligible amount for the same period in 2024.
Previous wording
Other (expense) income, net for the six months ended June 30, 2025 was $92 of income compared to $10 of income for the six months ended June 30, 2024. Other (expense) income, net as a percentage of revenue was negligible for the six months ended June 30, 2025 and 2024.
Current wording
Other income, net for the nine months ended September 30, 2025 was $312 compared to $10 for the nine months ended September 30, 2024. Other income, net as a percentage of revenue was negligible for the nine months ended September 30, 2025 and 2024.
Previous wording
For the three months ended June 30, 2025 and 2024, we recorded income tax expense attributable to continuing operations of $843 and $231, respectively, an increase of $612.
Current wording
For the three months ended September 30, 2025 and 2024, we recorded income tax expense attributable to continuing operations of $367 and $170, respectively, an increase of $197.
Previous wording
For the six months ended June 30, 2025 and 2024, we recorded income tax expense attributable to continuing operations of $1,134 and $264, respectively, an increase of $870.
Current wording
For the nine months ended September 30, 2025 and 2024, we recorded income tax expense attributable to continuing operations of $1,501 and $434, respectively, an increase of $1,067.
Previous wording
We incurred a loss of $6,123, or $0.22 per share, during the three months ended June 30, 2025, compared to a loss of $4,360, or $0.17 per share, during the three months ended June 30, 2024. Loss as a percentage of total revenue was 20% and 16% for the three months ended June 30, 2025 and 2024, respectively.
Current wording
We incurred a loss of $5,362, or $0.19 per share, during the three months ended September 30, 2025, compared to a loss of $3,901, or $0.15 per share, during the three months ended September 30, 2024. Loss as a percentage of total revenue was 15% and 13% for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
We incurred a loss of $8,521, or $0.31 per share, during the six months ended June 30, 2025, compared to a loss of $4,668, or $0.18 per share, during the six months ended June 30, 2024. Loss as a percentage of total revenue was 13% and 8% for the six months ended June 30, 2025 and 2024, respectively.
Current wording
We incurred a loss of $13,883, or $0.51 per share, during the nine months ended September 30, 2025, compared to a loss of $8,569, or $0.33 per share, during the nine months ended September 30, 2024. Loss as a percentage of total revenue was 14% and 10% for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Working Capital. We had working capital of $64,268 at June 30, 2025, an increase of $50,627 from working capital of $13,641 at December 31, 2024. Working capital as of June 30, 2025 and December 31, 2024 includes $3,724 and $8,363 of short-term deferred revenue, respectively. Deferred revenue is an obligation to perform future services. We expect that deferred revenue will convert to future revenue as we perform our services, but this does not represent future payments. Deferred revenue can vary based on seasonality, expiration of initial multi-year contracts and deals that are billed after implementation rather than in advance of service delivery.
Current wording
Working Capital. We had working capital of $14,838 at September 30, 2025, an increase of $1,197 from working capital of $13,641 at December 31, 2024. Working capital as of September 30, 2025 and December 31, 2024 includes $7,090 and $8,363 of short-term deferred revenue, respectively. Deferred revenue is an obligation to perform future services. We expect that deferred revenue will convert to future revenue as we perform our services, but this does not represent future payments. Deferred revenue can vary based on seasonality, expiration of initial multi-year contracts and deals that are billed after implementation rather than in advance of service delivery.
Previous wording
Operating Activities. Net cash provided by operating activities of $5,151 for the six months ended June 30, 2025 was primarily driven by non-cash adjustments to our net loss of approximately $17,614, primarily due to depreciation, amortization, and share-based compensation. This was offset by changes in operating assets and liabilities, which resulted in a use of $3,942 in cash. Net cash used in operating activities of $1,719 for the six months ended June 30, 2024 was primarily driven by changes in operating assets and liabilities, which results in a use of $10,677 in cash. This was offset by non-cash adjustments to our net loss of approximately $13,626, primarily due to depreciation, amortization, and share-based compensation.
Current wording
Operating Activities. Net cash provided by operating activities of $10,924 for the nine months ended September 30, 2025 was primarily driven by non-cash adjustments to our net loss of approximately $29,526, primarily due to depreciation, amortization, and share-based compensation. This was offset by changes in operating assets and liabilities, which resulted in a use of $4,719 in cash. Net cash used in operating activities of $394 for the nine months ended September 30, 2024 was primarily driven by non-cash adjustments to our net loss of approximately $21,034, primarily due to depreciation, amortization, and share-based compensation. This was offset by changes in operating assets and liabilities, which results in a use of $12,859 in cash.
Previous wording
Investing Activities. Net cash used in investing activities of $17,814 for the six months ended June 30, 2025 is primarily due to acquisitions of intangible assets in business combinations or asset acquisitions of $6,346, purchases of available-for-sale securities and maturities of $12,304, and software capitalization costs of $6,470, partially offset by proceeds from sales and maturities of available-for-sale securities of $7,699. Net cash used in investing activities of $7,359 for the six months ended June 30, 2024 is primarily due to purchases of available-for-sale securities and maturities of $6,462 and software capitalization costs of $5,042, partially offset by proceeds from sales and maturities of available-for-sale securities of $8,617.
Current wording
Investing Activities. Net cash used in investing activities of $78,170 for the nine months ended September 30, 2025, is primarily due to cash paid in business combinations or asset acquisitions of $52,467, which primarily consists of the acquisition of Lathem, purchases of available-for-sale securities of $36,655, and software capitalization costs of $10,271, partially offset by proceeds from sales and maturities of available-for-sale securities of $21,738. Net cash used in investing activities of $18,209 for the nine months ended September 30, 2024, is primarily due to cash paid in business combinations or asset acquisitions of $12,397, purchases of available-for-sale securities of $10,914, and software capitalization costs of $7,677, partially offset by proceeds from sales and maturities of available-for-sale securities of $13,325.
Previous wording
Financing Activities. Net cash provided by financing activities was $73,097 for the six months ended June 30, 2025, which primarily consisted of net proceeds of $57,982 from the Loan Agreement (defined below) with MidCap and net increase in client fund obligations of $20,461. Net cash used in financing activities was $27,935 for the six months ended June 30, 2024, which primarily consisted of a net decrease in client fund obligations of $28,225.
Current wording
Financing Activities. Net cash provided by financing activities was $7,001 for the nine months ended September 30, 2025, which primarily consisted of net proceeds of $57,982 from the Loan Agreement (defined below) with MidCap offset by a net decrease in client fund obligations of $45,506. Net cash used in financing activities was $26,291 for the nine months ended September 30, 2024, which primarily consisted of a net decrease in client fund obligations of $26,068.
Previous wording
As of June 30, 2025, we have seven subordinated promissory notes related to acquisitions that occurred during the six months ended June 30, 2025 and prior years with a combined outstanding principal balance of $11,345 and maturity dates ranging from October 1, 2025 to July 1, 2029.
Current wording
As of September 30, 2025, we have nine subordinated promissory notes outstanding, all of which related to acquisitions that occurred during the nine months ended September 30, 2025 and and periods prior to January 1, 2025, with a combined outstanding principal balance of $14,475 and maturity dates ranging from October 1, 2025 to July 1, 2029.
Previous wording
Under the Loan Agreement, we may borrow up to $60,000 from the Lenders, all of which has been funded as of June 30, 2025. The first $20,000 was advanced on April 10, 2024, the closing date of the Loan Agreement. The remaining $40,000 was advanced on June 30, 2025, which funds may only be used for Permitted Acquisitions (as defined in the Loan Agreement). The maturity date of the loan as provided under the Loan Agreement is April 1, 2030 (the “Maturity Date”).
Current wording
Under the Loan Agreement, we may borrow up to $60,000 from the Lenders, all of which has been funded as of June 30, 2025. The maturity date of the loan as provided under the Loan Agreement is April 1, 2030 (the “Maturity Date”).
Previous wording
Interest on the outstanding loan balance is payable monthly in arrears at an annual rate of Term SOFR plus 5.00%, subject to a Secured Overnight Financing Rate (“SOFR”) floor of 2.00%. Prior to April 1, 2029 (the “Amortization Start Date”), we must make interest-only payments on the outstanding loan balance. Commencing on the Amortization Start Date and continuing on the first day of each calendar month thereafter, we will pay an amount equal to the total principal of the outstanding loan balance divided by twelve (12), for a twelve (12) month straight-line amortization of equal monthly principal payments. Also on a monthly basis, we must pay an administrative agency fee to MidCap equal to 0.25% of the average end-of-day principal balance outstanding during the immediately preceding month. At the time of the final payment of the loan, we will provide a final payment fee of 1.00% of the amount advanced thereunder except in the case of a refinance of the loan with MidCap and the Lenders.
Current wording
Interest on the outstanding loan balance is payable monthly in arrears at an annual rate of Term SOFR plus 5.00%, subject to a Secured Overnight Financing Rate (“SOFR”) floor of 2.00%. Prior to April 1, 2029 (the “Amortization Start Date”), we must make interest-only payments on the outstanding loan balance. Commencing on the Amortization Start Date and continuing on the first day of each calendar month thereafter, we will pay an amount equal to the total principal of the outstanding loan balance divided by twelve (12), for a twelve (12) month straight-line amortization of equal monthly principal payments. Also on a monthly basis, we must pay an administrative agency fee to MidCap equal to 0.25% of the average end-of-day principal balance outstanding during the immediately preceding month. At the time of the final payment of the loan, we will provide a final payment fee of 2.00% of the amount advanced thereunder except in the case of a refinance of the loan with MidCap and the Lenders.
Previous wording
We are subject to customary events of default as described in the Loan Agreement. In such event, and for so long as it continues, the outstanding loan balance will bear interest at 2.0% per annum in excess of the rate otherwise payable. Under the Loan Agreement, we covenant to maintain (1) Total Leverage Ratio (as defined in the Loan Agreement), as tested quarterly, no greater than 5.50 to 1.00, and (2) minimum liquidity threshold of 10.00% of the outstanding principal amount of the Loans. As of June 30, 2025, we are in compliance with all covenants under the Loan Agreement.
Current wording
We are subject to customary events of default as described in the Loan Agreement. In such event, and for so long as it continues, the outstanding loan balance will bear interest at 2.0% per annum in excess of the rate otherwise payable. Under the Loan Agreement, we covenant to maintain (1) Total Leverage Ratio (as defined in the Loan Agreement), as tested quarterly, no greater than 5.50 to 1.00, and (2) minimum liquidity threshold of $10,000. As of September 30, 2025, we are in compliance with all covenants under the Loan Agreement.
Previous wording
Sources of Liquidity. As of June 30, 2025, our principal sources of liquidity consisted of $66,000 of cash and cash equivalents from proceeds of the MidCap Loan Agreement and cash generated from operations of our business over the next twelve months. Additionally, we have access to an “at the market offering” program entered in October 31, 2024, under which we may offer and sell up to $25,000 of newly issued common stock. As of June 30, 2025, there are $25,000 of shares of common stock available for issuance under this program.
Current wording
Sources of Liquidity. As of September 30, 2025, our principal sources of liquidity consisted of $21,520 of cash and cash equivalents generated from operations of our business, which we expect to be our principal source of liquidity over the next twelve months. Additionally, we have access to an “at the market offering” program entered in October 31, 2024, under which we may offer and sell up to $25,000 of newly issued shares of common stock. As of September 30, 2025, there are $25,000 of shares of common stock available for issuance under this program.