NRC's Q2 Earnings Rise Y/Y on Cost Control and TRCV Growth

Core Insights - National Research Corporation (NRC) shares have declined 10% since the earnings report for Q2 2025, contrasting with a 0.7% decline in the S&P 500 index during the same period [1] - The company reported adjusted net income per share of 28 cents, an increase from 26 cents in the same quarter last year [1] Financial Performance - NRC's revenues for Q2 2025 were $34 million, down 2.8% from $35 million in the previous year [2] - The company experienced a net loss of $0.1 million compared to a net income of $6.2 million in Q2 2024, primarily due to one-time executive compensation expenses [2][6] - Adjusted net income, excluding non-recurring items, rose slightly to $6.4 million from $6.1 million year-over-year [2] - Adjusted EBITDA for the quarter was $10.3 million, with a margin of 30.3%, indicating stable profitability when excluding unusual items [3] Recurring Revenue and Growth - Total recurring contract value (TRCV) grew 2% sequentially, marking the third consecutive quarter of growth and the strongest gain since early 2021 [4] - Improvements in salesforce effectiveness, customer retention, and product offerings contributed to this growth [4] Leadership and Strategic Direction - New CEO Trent S. Green expressed optimism about the company's future, highlighting customer enthusiasm and a commitment to high-touch service [5] - The reinstatement of quarterly earnings calls aims to enhance transparency and communication with shareholders [5] Executive Compensation Impact - The net loss was significantly influenced by $6.6 million in non-recurring executive compensation expenses related to leadership transitions [6] - SG&A expenses increased to $17.7 million from $11.2 million year-over-year, reflecting the impact of compensation costs [6] Shareholder Returns - NRC repurchased 381,736 shares at an average price of $14.96 during the quarter, returning $16.1 million to shareholders through dividends and buybacks year-to-date [7] - A quarterly dividend of 12 cents per share was declared, payable on October 10, 2025 [7] Balance Sheet Overview - As of June 30, 2025, NRC had $5.3 million in cash, an increase from $4.2 million at the end of 2024 [8] - Total debt rose to $81 million from $62.7 million, indicating greater leverage [8] - Shareholders' equity decreased to $21.3 million from $31.3 million, primarily due to treasury stock purchases and net losses [8]