HR software provider Asure Software (NASDAQ:ASUR) reported fourth-quarter 2025 results that exceeded market revenue expectations, with revenue up 27.7% year-over-year to $39.31 million. The company expects revenue next quarter to be around $42 million, close to analyst estimates. GAAP earnings of $0.03 per share were significantly above analyst consensus estimates.
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Gain: $39.31 million vs. analyst estimates of $38.78 million (27.7% YoY growth, 1.4% better)
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EPS (GAAP): $0.03 vs. analyst estimates of -$0.04 (significant gain)
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Adjusted EBITDA: $11.36 million vs. analyst estimates of $10.72 million (28.9% margin, 6% profit)
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Revenue guidance for the first quarter of 2026 is $42 million in the middle, about in line with what analysts expected
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EBITDA guidance for Q1 CY2026 is in the middle at $10.5 million, in line with analyst expectations
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Operating margin: 4.5%, compared to -8.1% in the same quarter last year
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Free cash flow was -$14.52 million, compared to $1.85 million in the previous quarter
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Invoices: $43.49 million at quarter end, up 16.6% year over year
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Market capitalization: $207.5 million
“We are pleased to report a strong fourth quarter to end 2025. Our fourth quarter revenues increased by an impressive 28% to $39.3 million compared to a year ago and for the year our revenues were $140.5 million, up 17% year-over-year. We continued to experience improved bond rates with our products and we believe the recent launch of our Asure Central™ customer portal will further accelerate this activity.”
Operating in the often overlooked smaller metropolitan markets where HR expertise can be scarce, Asure Software (NASDAQ:ASUR) provides cloud-based human capital management software and services that help small and mid-sized businesses manage payroll, taxes, time tracking and HR compliance.
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but the best performers can continue to grow for years to come. Over the past five years, Asure Software’s revenue grew 16.5% annually. While this growth is acceptable on an absolute basis, we need to see more than just revenue growth for the software sector, which can exhibit significant earnings volatility. This means that our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Furthermore, the five-year CAGR starts around Covid, when sales fell and then recovered.
At StockStory, we place the greatest emphasis on long-term growth, but within software, a half-decade historical view can ignore recent innovations or disruptive industry trends. Asure Software’s recent performance shows that demand has weakened, as annualized revenue growth of 8.6% over the past two years has been below the five-year trend. We are wary if companies in the sector see slowdowns in sales growth, as this could indicate changing consumer tastes, aided by low switching costs.
This quarter, Asure Software reported robust year-over-year revenue growth of 27.7%, and revenue of $39.31 million exceeded Wall Street estimates by 1.4%. The company’s management is currently targeting a 20.5% year-over-year revenue increase in the next quarter.
Looking further ahead, sell-side analysts expect revenue to grow by 13.5% over the next twelve months. While this projection suggests that the newer products and services will deliver better revenue performance, it is still below the industry average.
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Billings is a non-GAAP metric often called “cash revenue” because it shows how much money the company collected from customers in a given period. This differs from revenue, which must be recognized in parts over the term of a contract.
Asure Software’s fourth-quarter billings totaled $43.49 million, and over the past four quarters, growth has lagged slightly behind the industry, averaging 14.2% year-over-year growth. This alternative revenue measure grew more slowly than total revenue, meaning the company is generating revenue faster than it is raising cash — a liquidity headwind that could also indicate a slowdown in future revenue growth.
Customer acquisition cost payback period (CAC) measures the months it takes a company to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a company can break even on its sales and marketing investments.
Asure Software is extremely efficient at acquiring new customers and the CAC payback period was 4.6 months this quarter. The rapid recovery in customer acquisition costs means the company can look to boost growth by increasing its sales and marketing investments.
We were impressed by the extent to which Asure Software exceeded analyst expectations this quarter. We were also pleased to see EBITDA outperform Wall Street expectations. Overall, we think this was a decent quarter, with some key numbers exceeding expectations. The stock rose 7.6% to $8.37 immediately after the results.
Asure Software posted solid gains, but a quarter doesn’t necessarily mean the stock is a buy. Let’s see if this is a good investment. When making that decision, you need to consider the bigger picture of valuation, business qualities and most recent earnings. We cover that in our useful full research report which you can read here. It’s free.
