Total recurring contract value (TRCV)

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NRC's Q2 Earnings Rise Y/Y on Cost Control and TRCV Growth
ZACKSยท 2025-08-01 18:56
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]
National Research (NRC) - 2025 Q2 - Earnings Call Transcript
2025-07-29 15:00
Financial Data and Key Metrics Changes - Total Recurring Contract Value (TRCV) increased by 2% sequentially, marking the third consecutive quarter of sequential growth and the highest growth rate since early 2021 [8][9] - Adjusted EBITDA margin remains strong at 30%, reflecting disciplined cost management and operational efficiency [10][11] - The company repurchased 382,000 shares, approximately 2% of outstanding stock, at an average price of $14.96 per share during the quarter [12] Business Line Data and Key Metrics Changes - The company experienced the strongest year-to-date sales since 2021, with increased win rate percentage and average win size year-over-year [9] - Retention rates improved due to the strength of the customer success organization, indicating better customer satisfaction and loyalty [10] Market Data and Key Metrics Changes - The top 400 largest healthcare systems represent the target market, which has shown signs of recovery post-pandemic but faces budget pressures [12][13] - The competitive environment remains challenging, but the company's value proposition resonates with customers [12] Company Strategy and Development Direction - The company aims to enhance its market position by focusing on deeper, human-centered connections between healthcare providers and patients [7][8] - Plans for capital allocation include continuing dividends and share repurchases while funding organic growth opportunities and potential mergers and acquisitions [12] Management's Comments on Operating Environment and Future Outlook - The new CEO emphasized the importance of understanding the unique pressures and regulations of healthcare organizations as a competitive advantage [17][18] - The company is in the early stages of developing a strategic plan, with a focus on sustainable growth and long-term margin improvement [19][20] Other Important Information - The company is actively searching for a new Chief Financial Officer, indicating a focus on strengthening the executive team [13][14] - The CEO highlighted the importance of a high-touch customer success model, which differentiates the company from competitors [18] Q&A Session Summary Question: What is the current status of the sales organization? - The sales organization is being reorganized under Jason Rao, with positive momentum reflected in the size of the pipeline and new customer acquisitions [14][15] Question: How does the company differentiate itself in the competitive environment? - The company differentiates through deep healthcare experience and a high-touch customer success model, which builds trust and accelerates value realization for clients [16][17][18] Question: Are there any material investments planned? - The CEO is excited about future value creation opportunities but is still in the early stages of assessing specific investment plans or timelines [19][20]