National Research (NRC) - 2025 Q2 - Quarterly Results

Q2 2025 Financial & Operational Highlights The company reported strong Q2 2025 momentum with sequential TRCV growth, stable adjusted EBITDA margins, and continued capital returns to shareholders despite a net loss due to non-recurring items CEO Statement & Business Momentum The CEO highlighted strong Q2 2025 momentum, positive customer feedback, and 2% sequential TRCV growth, the highest since Q1 2021 - The new CEO is encouraged by Q2 momentum, customer feedback, and the product portfolio's reception. The company is reinstating its quarterly earnings call[2] - Total recurring contract value (TRCV) grew 2% sequentially, marking the third consecutive quarter of growth and the highest rate since Q1 2021[3] - Growth drivers include improved new logo sales, cross-sells, and customer retention, credited to a stronger sales team and customer service organization[3] Financial Performance & Adjustments Q2 2025 net margin was 0% due to non-recurring executive compensation, while adjusted EBITDA margin remained stable at 30% due to cost controls - A net margin of 0% for Q2 was caused by non-recurring cash bonuses and equity grants for executive leaders following the founder-led leadership transition[4] - Excluding special items, the adjusted EBITDA margin was 30% in Q2, remaining stable over the past year due to cost controls and higher revenue per FTE[4] Capital Allocation The company declared a $0.12 per share quarterly dividend and repurchased 381,736 shares, returning $16.1 million to shareholders year-to-date - A quarterly cash dividend of $0.12 per share was declared, payable on October 10, 2025[5] - In Q2 2025, the company repurchased 381,736 shares at a weighted average price of $14.96 per share[5] - A total of $16.1 million was returned to shareholders during 2025 through dividends and stock repurchases[5] Financial Statements The company's Q2 2025 financial statements show a revenue decline and net loss, alongside increased assets and liabilities, and decreased shareholder equity Unaudited Condensed Consolidated Statements of Income Q2 2025 revenue decreased to $34.0 million, resulting in a net loss of $0.1 million or ($0.01) per share, a significant decline from Q2 2024 Q2 2025 vs Q2 2024 Income Statement (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $34,038 | $35,021 | -2.8% | | Operating Income | $1,588 | $8,865 | -82.1% | | Net Income (Loss) | $(106) | $6,175 | -101.7% | | Diluted EPS | $(0.01) | $0.26 | -103.8% | Six Months Ended June 30, 2025 vs 2024 (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $67,588 | $70,334 | -3.9% | | Operating Income | $10,184 | $17,625 | -42.2% | | Net Income | $5,681 | $12,534 | -54.7% | | Diluted EPS | $0.25 | $0.52 | -51.9% | Unaudited Condensed Consolidated Balance Sheets Total assets increased to $141.4 million, while total liabilities rose to $120.1 million, leading to a decrease in shareholders' equity to $21.3 million Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $5,274 | $4,233 | | Total current assets | $25,320 | $19,600 | | Total assets | $141,387 | $132,539 | | Liabilities & Equity | | | | Total current liabilities | $35,926 | $35,858 | | Notes payable, net | $80,957 | $62,684 | | Total liabilities | $120,059 | $101,255 | | Total shareholders' equity | $21,328 | $31,284 | Non-GAAP Financial Measures Non-GAAP adjustments reveal a positive adjusted net income and stable adjusted EBITDA, providing a clearer view of underlying operational profitability Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income Adjusting Q2 2025 GAAP net loss for non-recurring executive compensation results in an Adjusted Net Income of $6.4 million, or $0.28 per diluted share Q2 Adjusted Net Income Reconciliation (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $(106) | $6,175 | | Non-recurring executive compensation | $6,640 | - | | Adjusted Net Income | $6,373 | $6,132 | | Adjusted Diluted EPS | $0.28 | $0.26 | Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA Q2 2025 Adjusted EBITDA was $10.3 million with a 30.3% margin, demonstrating stable profitability consistent with prior periods Adjusted EBITDA and Margin Trend (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net income (loss) | $(106) | $5,787 | $6,175 | | Add back: Non-recurring exec comp | $6,640 | - | - | | Adjusted EBITDA | $10,302 | $10,335 | $10,335 | | Adjusted EBITDA Margin | 30.3% | 30.8% | 29.5% |