asur-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2025


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __ to __


Commission File Number: 1-34522

ASURE SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Delaware

74-2415696

(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)

405 Colorado Street, Suite 1800, Austin, Texas

78701

(Address of principal executive offices)

(Zip Code)


512-437-2700
(Registrant’s Telephone Number, including Area Code)
None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

ASUR

The Nasdaq Capital Market

Series A Junior Participating Preferred Share Purchase Rights

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

☒

As of April 30, 2024, 27,154,007 shares of the registrant’s Common Stock, $0.01 par value, were outstanding.


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of March 31, 202 5 and December 31, 2024	1
	Condensed Consolidated Statements of Comprehensive L oss for the Three Months Ended March 31, 202 5 and March 31, 202 4	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 202 5 and March 31, 20 24	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 202 5 and March 31, 20 24	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	29
Item 6.	Exhibits	30

	Signatures	32


	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	14,076	$	21,425
Accounts receivable, net of allowance for credit losses of $6,545 and $6,328 at March 31, 2025 and December 31, 2024, respectively	15,800		18,154
Inventory	220		195
Prepaid expenses and other current assets	5,970		4,888
Total current assets before funds held for clients	36,066		44,662
Funds held for clients	257,019		192,615
Total current assets	293,085		237,277
Property and equipment, net	20,999		19,669
Goodwill	94,724		94,724
Intangible assets, net	73,003		69,114
Operating lease assets, net	4,403		4,041
Other assets, net	12,727		11,813
Total assets	$	498,941	$	436,638
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of notes payable	$	7,948	$	7,008
Accounts payable	2,475		1,364
Accrued compensation and benefits	2,911		4,485
Operating lease liabilities, current	1,432		1,438
Other accrued liabilities	6,071		6,600
Deferred revenue	4,662		8,363
Total current liabilities before client fund obligations	25,499		29,258
Client fund obligations	258,586		194,378
Total current liabilities	284,085		223,636
Long-term liabilities:
Deferred revenue	3,321		3,430
Deferred tax liability	2,903		2,612
Notes payable, net of current portion	6,172		5,709
Operating lease liabilities, noncurrent	3,892		3,578
Other liabilities	905		358
Total long-term liabilities	17,193		15,687
Total liabilities	301,278		239,323
Commitments and contingencies - Note 8
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,500 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value; 44,000 shares authorized; 27,122 and 26,671 shares issued, 27,122 and 26,671 shares outstanding at March 31, 2025 and December 31, 2024, respectively	271		267
Treasury stock at cost, zero(1) shares at March 31, 2025 and December 31, 2024	—		—
Additional paid-in capital	507,149		504,849
Accumulated deficit	(309,624)		(307,226)
Accumulated other comprehensive loss	(133)		(575)
Total stockholders’ equity	197,663		197,315
Total liabilities and stockholders’ equity	$	498,941	$	436,638
(1) The aggregate Treasury stock of prior repurchases of our own common stock was retired and subsequently issued effective January 1, 2024. See the Condensed Consolidated Statement of Changes in Stockholders' Equity for the impact of this transaction.


	Three Months Ended March 31,
	2025		2024
Revenue:
Recurring	$	33,187	$	30,273
Professional services, hardware and other	1,667		1,379
Total revenue	34,854		31,652
Cost of Sales	10,246		9,045
Gross profit	24,608		22,607
Operating expenses:
Sales and marketing	8,386		7,767
General and administrative	11,900		10,063
Research and development	2,029		1,769
Amortization of intangible assets	4,308		3,449
Total operating expenses	26,623		23,048
Loss from operations	(2,015)		(441)
Interest income	171		336
Interest expense	(451)		(180)
Other income, net	188		10
Loss from operations before income taxes	(2,107)		(275)
Income tax expense	291		33
Net loss	(2,398)		(308)
Other comprehensive income (loss):
Unrealized income (loss) on marketable securities	442		(244)
Comprehensive loss	$	(1,956)	$	(552)

Basic and diluted loss per share
Basic	$	(0.09)	$	(0.01)
Diluted	$	(0.09)	$	(0.01)

Weighted average basic and diluted shares
Basic	26,961		25,334
Diluted	26,961		25,334


	Common Stock Outstanding	Common Stock Amount		Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Other Comprehensive Loss		Total Stockholders’ Equity
Balance at December 31, 2024	26,671	$	267	$	—	$	504,849	$	(307,226)	$	(575)	$	197,315
Stock issued upon option exercise and vesting of restricted and performance stock units	451	4		—		437		—		—		441
Share based compensation	—	—		—		1,863		—		—		1,863
Net loss	—	—		—		—		(2,398)		—		(2,398)
Other comprehensive loss	—	—		—		—		—		442		442
Balance at March 31, 2025	27,122	$	271	$	—	$	507,149	$	(309,624)	$	(133)	$	197,663


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net loss	$	(2,398)	$	(308)
Adjustments to reconcile loss to net cash provided by (used in) operations:
Depreciation and amortization	5,972		4,860
Amortization of operating lease assets	374		335
Amortization of debt financing costs and discount	253		142
Non-cash interest expense	197		—
Net accretion of discounts on available-for-sale securities	(110)		(78)
Provision for expected losses	93		46
Provision for deferred income taxes	291		24
Net realized gains on sales of available-for-sale securities	(656)		(652)
Share-based compensation	1,863		1,902
Changes in operating assets and liabilities:
Accounts receivable	2,261		(919)
Inventory	(24)		(50)
Prepaid expenses and other assets	(1,049)		(473)
Operating lease right-of-use assets	—		30
Accounts payable	903		(960)
Accrued expenses and other long-term obligations	(1,737)		(2,665)
Operating lease liabilities	(427)		(141)
Deferred revenue	(3,810)		(5,040)
Net cash provided by (used in) operating activities	1,996		(3,947)
Cash flows from investing activities:
Acquisition of intangible asset	(6,346)		(710)
Purchases of property and equipment	(192)		(240)
Software capitalization costs	(2,769)		(2,435)
Purchases of available-for-sale securities	(6,589)		(3,516)
Proceeds from sales and maturities of available-for-sale securities	3,266		2,406
Net cash used in investing activities	(12,630)		(4,495)
Cash flows from financing activities:
Payments made on amounts due for the acquisition of intangible assets	(723)		(236)
Net proceeds from issuance of common stock	441		176
Net change in client fund obligations	64,207		21,122
Net cash provided by financing activities	63,925		21,062
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	53,291		12,620
Cash and cash equivalents, beginning of period	145,712		177,622
Cash and cash equivalents, end of period	$	199,003	$	190,242


Level 1:						Quoted prices in active markets for identical assets or liabilities;

Level 2:						Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and

Level 3:						Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.


	Total Carrying Value		Level 1		Level 2		Level 3
March 31, 2025
Assets:
Funds held for clients
Money market funds	$	4,788	$	4,788	$	—	$	—
Available-for-sale securities	72,092		—		72,092		—
Total	$	76,880	$	4,788	$	72,092	$	—

December 31, 2024
Assets:
Funds held for clients
Money market funds	$	8,105	$	8,105	$	—	$	—
Available-for-sale securities	68,328		—		68,328		—
Total	$	76,433	$	8,105	$	68,328	$	—


	Amortized Cost		Gross Unrealized Gains (1)		Gross Unrealized Losses (1)		Aggregate Estimated Fair Value
March 31, 2025
Cash equivalents	$	4,789	$	—	$	(1)	$	4,788
Available-for-sale securities:
Corporate debt securities	66,579		305		(364)		66,520
Municipal bonds	3,191		—		(76)		3,115
U.S. Government agency securities	2,454		13		(10)		2,457
Total available-for-sale securities	72,224		318		(450)		72,092

Total(2)	$	77,013	$	318	$	(451)	$	76,880

December 31, 2024
Cash equivalents	$	8,115	$	—	$	(10)	$	8,105
Available-for-sale securities:
Corporate debt securities	63,253		164		(619)		62,798
Municipal bonds	3,194		—		(104)		3,090
U.S. Government agency securities	2,449		6		(15)		2,440
Total available-for-sale securities	68,896		170		(738)		68,328

Total(2)	$	77,011	$	170	$	(748)	$	76,433


	March 31, 2025		December 31, 2024
Restricted cash and cash equivalents held to satisfy client funds obligations	$	184,927	$	124,287
Restricted short-term marketable securities held to satisfy client funds obligations	9,903		5,273
Restricted long-term marketable securities held to satisfy client funds obligations	62,189		63,055
Total funds held for clients	$	257,019	$	192,615


One year or less	$	9,903
After one year through five years	62,189
Total	$	72,092


Gross Intangible Assets	December 31, 2024		Acquisitions		March 31, 2025
Customer relationships	$	148,097	$	8,247	$	156,344
Developed technology	15,201		—		15,201
Trade names	880		—		880
Non-compete agreements	1,032		—		1,032
Total	$	165,210	$	8,247	$	173,457


	Weighted Average Amortization Period (in Years)	Gross		Accumulated Amortization		Net
March 31, 2025
Customer relationships	8.5	$	156,344	$	(87,218)	$	69,126
Developed technology	6.5	15,201		(11,411)		3,790
Trade names	4.3	880		(880)		—
Non-compete agreements	5.2	1,032		(945)		87
	8.3	$	173,457	$	(100,454)	$	73,003

December 31, 2024
Customer relationships	8.6	$	148,097	$	(83,074)	$	65,023
Developed technology	6.5	15,201		(11,201)		4,000
Trade names	4.3	880		(880)		—
Non-compete agreements	5.2	1,032		(941)		91
	8.3	$	165,210	$	(96,096)	$	69,114


2025 (Remaining)	$	13,419
2026	14,833
2027	12,638
2028	11,193
2029	9,030
2030	5,399
Thereafter	6,491
	$	73,003


	Maturity	Cash Interest Rate	March 31, 2025		December 31, 2024
Notes Payable – Acquisitions(1)	10/01/25 - 07/01/29	2.00% - 5.00%	$	11,345	$	9,943
Notes Payable – Other	11/01/25	10.00%	$	5,000	5,000
Gross Notes Payable			$	16,345	$	14,943


	Gross Notes Payable		Debt Issuance Costs and Debt Discount		Net Notes Payable
March 31, 2025
Current portion of notes payable	$	8,541	$	(593)	$	7,948
Notes payable, net of current portion	7,804		(1,632)		6,172
Total	$	16,345	$	(2,225)	$	14,120

December 31, 2024
Current portion of notes payable	$	7,578	$	(570)	$	7,008
Notes payable, net of current portion	7,365		(1,656)		5,709
Total	$	14,943	$	(2,226)	$	12,717


2025 (Remaining)	$	1,472
2026	1,571
2027	1,366
2028	1,188
2029	683
2030	207
Thereafter	27
Total minimum lease payments	6,514
Less: imputed interest	(1,190)
Total lease liabilities	$	5,324

SEC Form 10-Q filed by Asure Software Inc