ASURE SOFTWARE INC
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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, 2026 · Filed Oct 29, 2026
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 2026-06-30; filed 2026-07-30.
0001628280-26-051066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001628280-26-068268
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 73 previous paragraphs and 79 current paragraphs.
37 unchanged; 29 reworded; 13 added; 7 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 (13)
Current report
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
Recurring revenue for the three months ended September 30, 2026, was $36,912, an increase of $5,071, or 16%, from $31,841 for the three months ended September 30, 2025. The increase is primarily due to an increase in payroll solutions.
Current report
Professional services, hardware, and other revenue for the nine months ended September 30, 2026, was $11,265, an increase of $3,659, or 48%, from $7,606 for the nine months ended September 30, 2025. The increase is primarily due to an increase in non-recurring hardware sales, primarily resulting from the inclusion of a full period of results from the time and attendance business acquired in July 2025.
Current report
Sales and marketing expenses for the three months ended September 30, 2026, were $8,925, a decrease of $118, or 1%, from $9,043 for the three months ended September 30, 2025. The decrease is primarily due to a decrease in bad debt. Sales and marketing expenses as a percentage of revenue decreased to 22% for the three months ended September 30, 2026, from 25% for the same period in 2025.
Current report
General and administrative expenses for the three months ended September 30, 2026, were $12,540, an increase of $885, or 8%, from $11,655 for the three months ended September 30, 2025. The increase is primarily attributable to increased personnel compensation expenses. General and administrative expenses as a percentage of revenue decreased to 31% for the three months ended September 30, 2026, from 32% for the same period in 2025.
Current report
Other Income, Net
Current report
Under the Credit Agreement, the Company may borrow up to $115 million from the Lenders (the “Senior Credit Facility”), comprising a (i) $85.0 million (the “Initial Loan Balance”) term loan facility, all of which was drawn by the Company on October 15, 2026 (the “Closing Date”), (ii) $10.0 million five-year revolving credit facility (the “Revolving Facility”), and (iii) $20.0 million delayed-draw term loan facility (the “DDTL Facility”). After the Closing Date, the Company is permitted to incur (a) additional term loans under a new term facility to be included in the Senior Credit Facility and/or (b) increases in the Revolving Credit Facility, in an aggregate principal amount not to exceed $30 million, subject to the terms and conditions set forth in the Credit Agreement.
Current report
Subject to the conditions set forth in the Credit Agreement, the Revolving Facility is available through October 15, 2031 and the DDTL Facility is available through October 15, 2028.
Current report
The Company will begin to make principal payments on the Initial Loan Balance in quarterly installments beginning on April 1, 2027, such that 2.5% of the Initial Loan Balance will be paid in the first year, 5.0% of the Initial Loan Balance will be paid in each of the second and third year, and 7.5% of the Initial Loan Balance will be paid in each of the fourth and fifth year, with the last payment being made on October 1, 2031, and the remaining Initial Loan Balance paid on the October 15, 2031 (the “Maturity Date”). The Company may, upon notice to MUFG pursuant to the Credit Agreement, voluntarily prepay amounts loaned under the Credit Agreement in whole or in part without premium or penalty, subject to certain conditions set forth in the Credit Agreement.
Current report
The interest rates that the Company will be charged under the Senior Credit Facility is generally equal to the Term SOFR (as defined in the Credit Agreement’) plus the Applicable Rate (as defined in the Credit Agreement) or, at the the Company’s option, the Base Rate (as defined in the Credit Agreement ) plus the Applicable Rate. The Applicable Rate generally adjusts quarterly based on the Company’s Consolidated Net Leverage Ratio. With respect to Term SOFR loans, the Borrower may select interest periods of one, three or six months. For the Initial Loan Balance, the Company selected a three month interest period for Term SOFR and the interest rate to be charged during the initial three month interest period is 7.04%, calculated on the basis of a year of 360 days and actual days elapsed, reflecting a rate based on Term SOFR plus three percent (3.00%), as provided in the Credit Agreement.
Current report
The Company is subject to customary events of default as described in the Credit Agreement, including insolvency of the Company, breaches of certain covenants and representations and warranties, and failures to pay. In such event, and for so long as it continues, the outstanding loan balance will bear interest at a rate per annum, subject to certain exceptions set forth in the Credit Agreement, (i) equal to two percent (2.00%) in excess of the rate otherwise applicable thereto, and (ii) with respect to any loan for which a rate is not specified or available, a rate per annum equal to the Base Rate (as defined in the Credit Agreement), plus (a) the Applicable Rate for revolving loans that are Base Rate Loans (as defined in the Credit Agreement), plus (b) two percent (2.00%), in each case, to the fullest extent permitted by applicable law.
Current report
Under the Credit Agreement, the Company covenants to maintain a (i) Consolidated Net Leverage Ratio (as defined in the Credit Agreement), as tested quarterly, no greater than 3.50 to 1.00 (subject to certain conditions set forth therein), and (ii) Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement), as tested quarterly, of not less than 1.25 to 1.00. The Senior Credit Facility is secured by substantially all of the assets of the Company.
Current report
In connection with the entry into the Credit Agreement, we terminated the Credit, Security and Guaranty Agreement (the “MC Credit Agreement”), by and among the Company and MidCap Financial Trust (“MidCap”) and the lenders thereto and the secured promissory note (the “Note”) with MidCap, evidencing its obligations under the MC Credit Agreement. In connection with the extinguishment, the Company paid to MidCap for the benefit of lenders under the MC Credit Agreement an aggregate amount of $62,646 (the “Payoff Amount”) in full payment of its outstanding obligations under the MC Credit Agreement and Note. The Payoff Amount represented approximately $60,208 outstanding of principal and interest on the unpaid principal balance and $2,438 of prepayment and termination fees and other expenses due to MidCap.
Removed paragraphs (7)
Previous report
Recurring revenue for the three months ended June 30, 2026, was $33,958, an increase of $5,362, or 19%, from $28,596 for the three months ended June 30, 2025. The increase is primarily due to an increase in our time and attendance solutions business.
Previous report
Professional services, hardware, and other revenue for the six months ended June 30, 2026, was $8,155, an increase of $4,960, or 155%, from $3,195 for the six months ended June 30, 2025. The increase is primarily due to an increase in hardware related to our time and attendance solutions.
Previous report
Sales and marketing expenses for the three months ended June 30, 2026, were $9,098, an increase of $949, or 12%, from $8,149 for the three months ended June 30, 2025. The increase is primarily due to an increase in expenditures for lead generation. Sales and marketing expenses as a percentage of revenue decreased to 25% for the three months ended June 30, 2026, from 27% for the same period in 2025.
Previous report
General and administrative expenses for the three months ended June 30, 2026, were $12,099, an increase of $1,131, or 10%, from $10,968 for the three months ended June 30, 2025. The increase is primarily attributable to an increase in compensation-related expenses and contractors due to changes in headcount associated with administrative functions. General and administrative expenses as a percentage of revenue decreased to 33% for the three months ended June 30, 2026 from 36% for the same period in 2025.
Previous report
Other Income (Expense), Net
Previous report
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%. This rate was 8.74% as of June 30, 2026. 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 report
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 June 30, 2026, we are in compliance with all covenants under the Loan Agreement.
Reworded paragraphs (29)
Previous wording
The following review of Asure’s financial position as of June 30, 2026, and December 31, 2025, and results of operations for the three and six months ended June 30, 2026 and 2025, should be read in conjunction with our 2025 Annual Report on Form 10-K filed with the SEC on February 26, 2026 and our quarterly report filed with the SEC on April 30, 2026. 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, 2026, and December 31, 2025, and results of operations for the three and nine months ended September 30, 2026 and 2025, should be read in conjunction with our 2025 Annual Report on Form 10-K filed with the SEC on February 26, 2026 and our quarterly reports filed with the SEC on April 30, 2026, and July 30, 2026. 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
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 91% and 90% of total revenue in the three and six months ended June 30, 2026, respectively, compared to 95% in the three and six months ended June 30, 2025. This decrease was due to the increase in hardware sales as a result of time and attendance business growth.
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 92% and 91% of total revenue in the three and nine months ended September 30, 2026, respectively, compared to 88% and 92% in the three and nine months ended September 30, 2025, respectively. The increase in recurring revenue as a percentage of total revenue for the three months ended September 30, 2026 was due to growth in our payroll direct business and lower non-recurring time and attendance hardware sales. The decrease for the nine months ended September 30, 2026 was due to higher non-recurring hardware sales, primarily resulting from the inclusion of a full period of results from the time and attendance business acquired in July 2025.
Previous wording
Recurring revenue for the six months ended June 30, 2026, was $71,715, an increase of $9,932, or 16%, from $61,783 for the six months ended June 30, 2025. The increase is primarily due to an increase in our time and attendance solutions business.
Current wording
Recurring revenue for the nine months ended September 30, 2026, was $108,627, an increase of $15,003, or 16%, from $93,624 for the nine months ended September 30, 2025. The increase is primarily due to an increase in HR compliance, payroll solutions, and time and attendance solutions.
Previous wording
Professional services, hardware and other revenue for the three months ended June 30, 2026, was $3,155, an increase of $1,627, or 106%, from $1,528 for the three months ended June 30, 2025. This increase is primarily due to an increase in hardware related to our time and attendance solutions.
Current wording
Professional services, hardware and other revenue for the three months ended September 30, 2026, was $3,110, a decrease of $1,301, or 29%, from $4,411 for the three months ended September 30, 2025. This decrease is primarily due to a decrease in hardware related to our time and attendance solutions, which is non-recurring in nature.
Previous wording
Consolidated gross profit for the three months ended June 30, 2026, was $25,055, an increase of $5,144, or 26%, from $19,911 for the three months ended June 30, 2025. Gross profit as a percentage of revenue increased to 68% for the three months ended June 30, 2026, from 66% for the same period in 2025. The increase is primarily attributable to the growth in our time and attendance solutions.
Current wording
Consolidated gross profit for the three months ended September 30, 2026, was $27,844, an increase of $4,306, or 18%, from $23,538 for the three months ended September 30, 2025. Gross profit as a percentage of revenue increased to 70% for the three months ended September 30, 2026, from 65% for the same period in 2025. The increase is primarily attributable to the growth in our payroll solutions, which are higher margin in comparison to our other offerings.
Previous wording
Consolidated gross profit for the six months ended June 30, 2026, was $55,525, an increase of $11,006, or 25%, from $44,519 for the six months ended June 30, 2025. Gross profit as a percentage of revenue increased to 70% for the six months ended June 30, 2026, from 69% for the same period in 2025. The increase is primarily attributable to the growth in our time and attendance solutions.
Current wording
Consolidated gross profit for the nine months ended September 30, 2026, was $83,369, an increase of $15,197, or 22%, from $68,172 for the nine months ended September 30, 2025. Gross profit as a percentage of revenue increased to 70% for the nine months ended September 30, 2026, from 67% for the same period in 2025. The increase is primarily attributable to the growth in our HR compliance, payroll solutions, and time and attendance solutions, which is higher margin in comparison to our other offerings.
Previous wording
Our cost of sales relates primarily to direct product costs, compensation for operations and related consulting expenses, web hosting, and related expenses and the amortization of our purchased software development costs. We include intangible amortization related to developed and acquired technology within cost of sales.
Current wording
Our cost of sales relates primarily to direct product costs, compensation for operations and related consulting expenses, hardware expenses, facilities, and related expenses and the amortization of our purchased software development costs. We include intangible amortization related to developed and acquired technology within cost of sales.
Previous wording
Sales and marketing expenses for the six months ended June 30, 2026, were $17,862, an increase of $1,327, or 8%, from $16,535 for the six months ended June 30, 2025. The increase is primarily due to increase in expenditures for lead generation. Sales and marketing expenses as a percentage of revenue decreased to 22% for the six months ended June 30, 2026, from 25% for the same period in 2025.
Current wording
Sales and marketing expenses for the nine months ended September 30, 2026, were $26,787, an increase of $1,209, or 5%, from $25,578 for the nine months ended September 30, 2025. The increase is primarily due to an increase in advertising. Sales and marketing expenses as a percentage of revenue decreased to 22% for the nine months ended September 30, 2026, from 25% for the same period in 2025.
Previous wording
General and administrative expenses for the six months ended June 30, 2026, were $24,847, an increase of $1,979, or 9%, from $22,868 for the six months ended June 30, 2025. The increase is primarily attributable to an increase in compensation-related expenses and contractors due to changes in headcount associated with administrative functions. General and administrative expenses as a percentage of revenue decreased to 31% for the six months ended June 30, 2026, from 35% for the same period in 2025.
Current wording
General and administrative expenses for the nine months ended September 30, 2026, were $37,387, an increase of $2,864, or 8%, from $34,523 for the nine months ended September 30, 2025. The increase is primarily attributable to an increased personnel compensation expenses. General and administrative expenses as a percentage of revenue decreased to 31% for the nine months ended September 30, 2026, from 34% for the same period in 2025.
Previous wording
R&D expenses for the three months ended June 30, 2026, were $1,565, an increase of $292, or 23%, from $1,273 for the three months ended June 30, 2025. The increase is primarily attributable to an increase in compensation-related expenses and decrease in capitalization of software development expenses, offset by a decrease in contractor expenditures. R&D expenses as a percentage of revenue remained flat at 4% for the three months ended June 30, 2026, and 2025.
Current wording
R&D expenses for the three months ended September 30, 2026, were $1,677, an increase of $107, or 7%, from $1,570 for the three months ended September 30, 2025. The increase is primarily attributable to an increase in software subscriptions. R&D expenses as a percentage of revenue remained flat at 4% for the three months ended September 30, 2026 and 2025.
Previous wording
R&D expenses for the six months ended June 30, 2026, were $3,222, a decrease of $80, or 2%, from $3,302 for the six months ended June 30, 2025. The decrease is primarily attributable to a decrease in contractor expenditures and an increase in the capitalization of software development expenses, offset by an increase in compensation-related expenses. R&D expenses as a percentage of revenue decreased to 4% for the six months ended June 30, 2026, from 5% for the same period in 2025.
Current wording
R&D expenses for the nine months ended September 30, 2026, were $4,899, a decrease of $88, or 2%, from $4,987 for the nine months ended September 30, 2025. The decrease is primarily attributable to an increase in capitalized software. R&D expenses as a percentage of revenue decreased to 4% for the nine months ended September 30, 2026 from 5% for the same period in 2025.
Previous wording
Amortization expense for the six months ended June 30, 2026, was $9,661, an increase of $1,180, or 14%, from $8,481 for the six months ended June 30, 2025. The increase is primarily attributable to our continuing acquisitions strategy. Amortization expense as a percentage of revenue decreased to 12% for the six months ended June 30, 2026, from 13% for the same period in 2025.
Current wording
Amortization expense for the three months ended September 30, 2026, was $4,187, a decrease of $582, or 12%, from $4,769 for the three months ended September 30, 2025. The decrease is primarily attributable to intangible assets fully amortized in the current year. Amortization expense as a percentage of revenue decreased to 10% for the three months ended September 30, 2026, from 13% for the same period in 2025.
Previous wording
Amortization expense for the three months ended June 30, 2026, was $4,689, an increase of $516, or 12%, from $4,173 for the three months ended June 30, 2025. The increase is primarily attributable to our continuing acquisitions strategy. Amortization expense as a percentage of revenue decreased to 13% for the three months ended June 30, 2026, from 14% for the same period in 2025.
Current wording
Amortization expense for the nine months ended September 30, 2026, was $13,848, an increase of $598, or 5%, from $13,250 for the nine months ended September 30, 2025. 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 12% for the nine months ended September 30, 2026 from 13% for the same period in 2025.
Previous wording
Interest income for the three months ended June 30, 2026, was $168 compared to interest income of $277 for the three months ended June 30, 2025. Interest income as a percentage of revenue was negligible for the three months ended June 30, 2026, compared to 1% for three months ended June 30, 2025. Interest expense for the three months ended June 30, 2026 was $1,753 compared to interest expense of $809 for the three months ended June 30, 2025. Interest expense as a percentage of revenue was 5% for the three months ended June 30, 2026 compared to 3% for the same period in 2025. The increase in interest expense in the three months ended June 30, 2026, is primarily related to interest accrued under our Loan Agreement (defined below) with MidCap Financial Trust (“MidCap”).
Current wording
Interest income for the three months ended September 30, 2026, was $178 compared to interest income of $250 for the three months ended September 30, 2025. Interest income as a percentage of revenue was negligible for the three months ended September 30, 2026 compared to 1% for the same period in 2025. Interest expense for the three months ended September 30, 2026 was $1,762 compared to interest expense of $1,966 for the three months ended September 30, 2025. Interest expense as a percentage of revenue was 4% for the three months ended September 30, 2026 compared to 5% for the same period in 2025. The decrease in Interest expense in the three months ended September 30, 2026, is primarily related to the variable interest rate accrued under our Loan Agreement (defined below) with MidCap Financial Trust (“MidCap”) being lower in the three months ended September 30, 2026 compared to the same period in 2025.
Previous wording
Interest income for the six months ended June 30, 2026 was $354 compared to interest income of $448 for the six months ended June 30, 2025. Interest income as a percentage of revenue was negligible for the six months ended June 30, 2026, compared to 1% for the six months ended June 30, 2025. Interest expense for the six months ended June 30, 2026 was $3,499 compared to interest expense of $1,260 for the six months ended June 30, 2025. Interest expense as a percentage of revenue was 4% for the six months ended June 30, 2026 compared to 2% for the same period in 2025. The increase in interest expense in the six months ended June 30, 2026, is primarily related to interest accrued under our Loan Agreement with MidCap.
Current wording
Interest income for the nine months ended September 30, 2026 was $532 compared to interest income of $698 for the nine months ended September 30, 2025. Interest income as a percentage of revenue was negligible for the nine months ended September 30, 2026 compared to 1% for the same period in 2025. Interest expense for the nine months ended September 30, 2026 was $5,261 compared to interest expense of $3,226 for the nine months ended September 30, 2025. Interest expense as a percentage of revenue was 4% for the nine months ended September 30, 2026 compared to 3% for the same period in 2025. The increase in interest expense in the nine months ended September 30, 2026, is primarily related to interest accrued under our Loan Agreement with MidCap entered into on April 10, 2025.
Previous wording
Other income (expense), net for the six months ended June 30, 2026 was $0 compared to $92 of income for the six months ended June 30, 2025. Other income, net as a percentage of revenue was negligible for the six months ended June 30, 2026 and 2025.
Current wording
Other income, net for the three months ended September 30, 2026 was $9 compared to $220 for the three months ended September 30, 2025. Other income, net as a percentage of revenue was negligible for the three months ended September 30, 2026 compared to 1% for the same period in 2025.
Previous wording
Other income (expense), net for the three months ended June 30, 2026 was $0 compared to $96 of expense for the three months ended June 30, 2025. Other income, net as a percentage of revenue was negligible for the three months ended June 30, 2026 and 2025.
Current wording
Other income, net for the nine months ended September 30, 2026 was $9 compared to $312 for the nine months ended September 30, 2025. Other income, net as a percentage of revenue was negligible for the nine months ended September 30, 2026 and 2025.
Previous wording
For the six months ended June 30, 2026 and 2025, we recorded income tax expense attributable to continuing operations of $606 and $1,134, respectively, a decrease of $528.
Current wording
For the three months ended September 30, 2026, we recorded income tax benefit attributable to continuing operations of $456 compared to an income tax expense of $367 for the three months ended September 30, 2025, a decrease of $823.
Previous wording
For the three months ended June 30, 2026 and 2025, we recorded income tax expense attributable to continuing operations of $462 and $843, respectively, a decrease of $381.
Current wording
For the nine months ended September 30, 2026 and 2025, we recorded income tax expense attributable to continuing operations of $150 and $1,501, respectively, a decrease of $1,351.
Previous wording
We incurred a loss of $4,443, or $0.15 per share, during the three months ended June 30, 2026, compared to a loss of $6,123, or $0.22 per share, during the three months ended June 30, 2025. Loss as a percentage of total revenue was 12% and 20% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
We incurred a loss of $604, or $0.02 per share, during the three months ended September 30, 2026, compared to a loss of $5,362, or $0.19 per share, during the three months ended September 30, 2025. Loss as a percentage of total revenue was 2% and 15% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
We incurred a loss of $3,818, or $0.13 per share, during the six months ended June 30, 2026, compared to a loss of $8,521, or $0.31 per share, during the six months ended June 30, 2025. Loss as a percentage of total revenue was 5% and 13% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
We incurred a loss of $4,422, or $0.15 per share, during the nine months ended September 30, 2026, compared to a loss of $13,883, or $0.51 per share, during the nine months ended September 30, 2025. Loss as a percentage of total revenue was 4% and 14% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Working Capital. We had working capital of $13,434 at June 30, 2026, a decrease of $5,212 from working capital of $18,646 at December 31, 2025. Working capital as of June 30, 2026 and December 31, 2025 includes $6,730 and $11,622 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 $11,419 at September 30, 2026, a decrease of $7,227 from working capital of $18,646 at December 31, 2025. Working capital as of September 30, 2026 and December 31, 2025 includes $5,864 and $11,622 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 $7,180 for the six months ended June 30, 2026 was primarily driven by non-cash adjustments to our net loss of approximately $18,764, 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 $7,766 in cash. 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 $17,199, 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 $3,527 in cash.
Current wording
Operating Activities. Net cash provided by operating activities of $12,810 for the nine months ended September 30, 2026 was primarily driven by non-cash adjustments to our net loss of approximately $27,780, 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 $10,548 in cash. Net cash provided by operating activities of $10,926 for the nine months ended September 30, 2025 was primarily driven by non-cash adjustments to our net loss of approximately $27,918, 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 $3,109 in cash.
Previous wording
Investing Activities. Net cash used in investing activities of $23,205 for the six months ended June 30, 2026, is primarily due to cash paid in business combinations or asset acquisitions of $4,721, purchases of available-for-sale securities of $23,752, and software capitalization costs of $6,789, partially offset by proceeds from sales and maturities of available-for-sale securities of $12,529. Net cash used in investing activities of $17,814 for the six months ended June 30, 2025, is primarily due to cash paid in asset acquisitions of $6,346, purchases of available-for-sale securities 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.
Current wording
Investing Activities. Net cash used in investing activities of $22,680 for the nine months ended September 30, 2026, is primarily due to cash paid in asset acquisitions of $4,739, purchases of available-for-sale securities of $25,566, and software capitalization costs of $10,582, partially offset by proceeds from sales and maturities of available-for-sale securities of $18,773. Net cash used in investing activities of $78,177 for the nine months ended September 30, 2025, is primarily due to cash paid in business combinations or asset acquisitions of $52,467, 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.
Previous wording
Financing Activities. Net cash used in financing activities was $49,187 for the six months ended June 30, 2026, which primarily consisted of a net decrease in client fund obligations of $48,647. 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 a net increase in client fund obligations of $20,461.
Current wording
Financing Activities. Net cash used in financing activities was $36,311 for the nine months ended September 30, 2026, which primarily consisted of payments of notes payables of $4,554 and net decrease in client fund obligations of $31,103. Net cash provided by financing activities was $7,006 for the nine months ended September 30, 2025, which primarily consisted of net proceeds of $57,982 from the MC Credit Agreement (defined below) with MidCap offset by a net decrease in client fund obligations of $45,506.
Previous wording
As of June 30, 2026, we have nine subordinated promissory notes outstanding, all of which related to acquisitions that occurred during the six months ended June 30, 2026 and periods prior to January 1, 2025, with a combined outstanding principal balance of $11,395 and maturity dates ranging from August 1, 2026 to July 1, 2029.
Current wording
As of September 30, 2026, we have seven subordinated promissory notes outstanding, all of which related to acquisitions that occurred during the nine months ended September 30, 2026 and periods prior to January 1, 2025, with a combined outstanding principal balance of $6,811 and maturity dates ranging from November 1, 2026 to July 1, 2029.
Previous wording
On April 10, 2025, we entered into a Credit, Security and Guaranty Agreement (as amended, the “Loan Agreement”) with MidCap and the lenders from time to time party thereto (such lenders collectively with MidCap, the “Lenders”). 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”).
Current wording
On October 15, 2026, we entered into a Credit Agreement (the “Credit Agreement”) with MUFG Bank, LTD (“MUFG”), as administrative agent, and the lenders from time to time party thereto (such lenders collectively with MUFG, the “Lenders”).
Previous wording
In connection with the Loan Agreement and subsequent draw, we incurred $2,025 of origination, legal, and other fees that represent debt financing costs to be deferred and amortized over the duration of the Loan Agreement. As a result, net proceeds of all borrowings under the Loan Agreement were $57,975.
Current wording
In connection with the Credit Agreement, we incurred $1,226 of origination, legal, and other fees that represent debt financing costs to be deferred and amortized over the duration of the Loan Agreement. As a result, net proceeds of the Loan Agreement were $83,774.
Previous wording
Sources of Liquidity. As of June 30, 2026, our principal sources of liquidity consisted of $19,679 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 June 30, 2026, there are $25,000 of shares of common stock available for issuance under this program.
Current wording
Sources of Liquidity. As of September 30, 2026, our principal sources of liquidity consisted of $16,780 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. As of October 29, 2026, we have access to the $10.0 million Revolving Facility, and the $20.0 million DDTL Facility. 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, 2026, there are $25,000 of shares of common stock available for issuance under this program.