Asure Software (ASUR) Financials

Asure Software’s second-quarter 2026 results show strong year-over-year revenue growth and positive operating cash flow, but profitability and liquidity trends remain mixed. Revenue increased to $37.1 million from $30.1 million in Q2 2025, a gain of approximately 23%. Gross profit rose 26% to $25.1 million, and the gross margin improved to roughly 67.5% from 66.1%. However, revenue declined sequentially from $42.8 million in Q1 2026, while the company returned to an operating loss.

Asure generated $4.5 million of operating cash flow in Q2 2026, up from $3.2 million in the prior-year quarter. This was enough to cover $3.8 million of capital expenditures, although substantial investment purchases and financing outflows drove a $51.0 million quarterly decline in cash and equivalents. The balance sheet still includes $178.9 million of restricted cash, but unrestricted cash was only $19.7 million at quarter-end.

Across the reported quarters from 2023 through Q2 2026, revenue has generally trended higher, but the company has continued to report recurring net losses in most periods. Total assets have expanded substantially since 2023, partly reflecting acquisitions and higher goodwill and intangible assets. Investors should focus on whether Asure can convert its revenue growth into sustainable operating profits and cash generation without relying on large financing or asset-management transactions.

• Revenue growth remains a key strength: Q2 2026 revenue of $37.1 million was approximately 23% higher than the restated $30.1 million reported in Q2 2025 and about 41% above Q2 2024 revenue of $28.0 million.
• Gross margins improved: Gross profit increased to $25.1 million in Q2 2026, with gross margin rising to approximately 67.5% from 66.1% in Q2 2025 and 67.3% in Q2 2024.
• Operating cash flow has remained positive: Asure generated positive operating cash flow in every reported quarter provided, including $4.5 million in Q2 2026. Cash flow improved from $3.2 million in Q2 2025 and $2.7 million in Q1 2026.
• Capital spending was covered by quarterly operating cash flow: Q2 2026 operating cash flow exceeded the $3.8 million spent on property and equipment, unlike several earlier quarters in which capital expenditures exceeded operating cash generation.
• Liquidity is heavily influenced by restricted cash: Total current assets were $221.8 million versus current liabilities of $208.4 million, but $178.9 million of current assets consisted of restricted cash. Unrestricted cash and equivalents totaled only $19.7 million.
• Debt has been relatively stable recently: Short- and long-term debt totaled approximately $68.9 million in Q2 2026, broadly similar to Q2 2025 and Q1 2026. Interest expense, however, remained significant at $1.8 million for the quarter.
• Acquisition-related assets have increased: Goodwill and intangible assets totaled approximately $199.3 million in Q2 2026, up from roughly $156.3 million in Q2 2024. This supports the company’s growth strategy but increases exposure to future impairment charges.
• Profitability deteriorated sequentially: Asure reported a $2.4 million operating loss and a $4.4 million net loss in Q2 2026, compared with operating income of $2.3 million and net income of $625,000 in Q1 2026.
• Net losses remain a recurring pattern: The company reported net losses in Q2 and Q3 2024, all four reported quarters of 2025 except Q4, and Q2 2026. Retained earnings declined to a deficit of $324.2 million at June 30, 2026.
• Cash declined sharply during Q2: Net cash and equivalents fell by $51.0 million during the quarter as $37.7 million of financing outflows and $17.8 million of investing outflows more than offset operating cash generation.