Key Highlights

  • Total Revenue rose 10% to $40.0 million in the third quarter, from $36.3 million a year earlier.
  • Recurring revenue grew 16% to $36.9 million, led by Payroll solutions.
  • Gross profit margin reached 70%, up from 65% in the prior year quarter.
  • The net loss narrowed to $604 thousand, or $0.02 per share, from $5.4 million, or $0.19 per share.
  • A new Credit agreement with up to $115 million of capacity was signed on October 15, 2026.

A payroll-led quarter lifts Recurring Revenue by 16%

Asure Software (NASDAQ:ASUR) provides cloud-based Human Capital management software delivered as a subscription service, covering payroll and tax filing, HR compliance, time and attendance, recruiting and benefits administration. The company said its solutions serve more than 100,000 clients across the United States, and about 35% of those are direct clients, with the rest reached through reseller partners. It filed its third quarter 2026 report on October 29, 2026.

Total revenue was $40.0 million, up $3.8 million, or 10%, from $36.3 million. Recurring revenue of $36.9 million increased $5.1 million, or 16%, which the company attributed mainly to payroll solutions. Recurring revenue represented over 92% of the total, compared with 88% a year earlier.

Hardware sales fall while margins widen

Professional services, hardware and other revenue was $3.1 million, down 29% from $4.4 million, mainly because of lower time and attendance hardware sales, which are non-recurring in nature.

Gross profit increased 18% to $27.8 million, and gross margin rose to 70% from 65%. The company credited the shift toward payroll solutions, which carry higher margins than its other offerings.

Operating expenses grow slowly enough to turn the operating line positive

Operating expenses were $27.3 million against $27.0 million a year ago, a rise of about 1% on a calculated basis. General and administrative costs rose 8% to $12.5 million on higher personnel compensation, while sales and Marketing slipped 1% to $8.9 million on lower bad debt. Amortization of Intangibles fell 12% to $4.2 million.

That mix produced income from operations of $515 thousand, compared with a loss of $3.5 million in the third quarter of 2025. After interest expense of $1.8 million, down from $2.0 million, and an income tax benefit of $456 thousand, the net loss was $604 thousand.

Nine-month results and cash flow

For the nine months ended September 30, 2026, revenue rose 18% to $119.9 million from $101.2 million, helped by a full period of the time and attendance Business acquired in July 2025. Recurring revenue climbed 16% to $108.6 million, and the net loss was $4.4 million, or $0.15 per share, against $13.9 million, or $0.51 per share, a year earlier.

Net cash provided by Operating Activities was $12.8 million, up from $10.9 million. Cash and cash equivalents, excluding funds held for clients, were $16.8 million at September 30, 2026, down from $25.2 million at December 31, 2025.

A new $115 million credit Facility replaces the MidCap loan

On October 15, 2026, Asure entered a credit agreement with MUFG Bank as administrative agent. It comprises an $85.0 million term loan, all drawn at closing, a $10.0 million revolving facility and a $20.0 million delayed-draw term loan. The initial rate is 7.04%, based on Term SOFR plus 3.00%, and the term Loan matures on October 15, 2031.

Proceeds were used to pay off $62.6 million owed under the previous MidCap Financial Trust agreement. Readers tracking the name will likely follow principal repayments starting April 1, 2027, the interest cost under the new facility and whether payroll keeps lifting recurring revenue.