ACCESS Newswire, Inc. Q3 FY2025 earnings call

Key Points

• Rebranded in January, sold legacy compliance business in February, reducing debt by 83% and OpEx by 7%.
• Retooled back-office systems, focused on subscription-first sales approach, subscription business now ~50% of revenue.
• Introduced AI agents to analyze content in real-time for misinformation/disinformation.
• Plan to roll out product upgrades including real-time social media monitoring, integration with social media management platforms, and enhanced distribution reporting with real-time prompts.
• EDU program launched, a class curriculum component of the ACCESS PR platform for students and academics.
• AI-driven automation initiatives: internal editorial validation system deployed, saving 5% of editorial time, customer-facing version to launch by year-end, and social media integrations expected by year-end.

Revenue for the third quarter was $5.7 million, up 2% sequentially and year-over-year from $5.6 million. Adjusted EBITDA increased to $933,000, representing 16% of revenue. Gross margins held at 75%. Core press release revenue increased 7% quarter-over-quarter but declined 1% for the nine months ended September 30, 2025. Revenue from pro webcasting and IR website solutions declined. Subscription customers increased to 972, with average recurring revenue per subscribing customer at $11,601, up 14% year-over-year.

Forward-Looking Statements

• Expect continued sequential improvement in revenue and adjusted EBITDA in the fourth quarter.
• Focus on expanding subscription revenue and recurring ARR.
• Anticipate growth in 2026 with higher subscription customers and ARR, driven by product enhancements like trade-up and trade-in strategies.
• Expect gross margins to climb next year with scale and industry trends favoring press releases and blog content for AI queries.

Risks

• Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to differ.
• Challenges in hitting subscription customer targets as disposed compliance business led to loss of 300 subscription customers, making it aggressive to reach guided numbers.

Q: Good morning, guys. Congrats on a nice quarter here. First, to start off, I just want to get some additional color on, you know, the nice sequential growth we saw in subscription ARR. I think, you know, you guys had said that, you know, previously, contracts were coming on at, you know, about $14,000. That still the case, or has that changed at all?

A: No. Yeah. I think the end of Q3, we were about $13,000 and change. So we're just slightly off Q2's numbers. But we're still trending in the right direction overall when we look at total ARR.

Q: Okay. And so just to kind of contrast your comments here, I you know, you kind of said that 1,200 for, you know, subscription customers was an aggressive goal for this year. But did I hear you correct? That's where you expect to be next year at this point? Is that 1,219?

A: Yeah. No. That's a good point. Right? And what we were talking about in our prepared remarks last year when we guided to the 1,500 number, as I said earlier, we were not giving way for the number of compliance subscriptions. And so we do retract those to kind of restate the numbers, it would ultimately look like about approximately 1,200 is what the target would be. We feel like we're going to be slightly short of that 1,200 number. Although, we feel like our retention and our average ARR is going to continue to climb. And so long as we see those numbers, we're not concerned about the business seeing that 1,200 number by the end of the year. But I'd expect that in the next year, this time next year, you're going to be well north of 1,500 to 1,600 subscription customers on our focus communications platform. So not 1,200, but higher than those numbers.

Q: Yeah. Hey, guys. Sorry about that. I thought I was in the queue earlier, but congrats on the quarter. Brian, could you just talk a little bit about industry volumes across the press release industry, kind of how that trended for the quarter and then what you've seen so far here in October and into November?

A: Yeah. That's a great question. And so this may take me a few minutes to answer. And so as I begin, you know, kind of the response to you, Luke, I'm going to pull something up. Because I want to be sure that I'm being very articulate for our audience and our shareholders to understand. For the better part of the last eight years, we have as a business, have gone from no percentage of market to 20% of market in news volumes. And when we used to obtain research independently in the market that a firm no longer does, it indicated that the industry was growing at about a 4 to 6% CAGR over the last five years absent of this year. And so when we looked back at the last two years, and this goes to kind of the four main news wires in the market, us being one of them. We saw the largest, I'm going to leave their names out of this just to be fair to them. The largest news provider dropped market share from 34% to 27% in this, you know, mid-2023 to, you know, Q3 2025. Another one dropped from 32 to 26. And in the same time, volumes in the market went from 8% to almost 20% for us. So we're seeing the industry slow down in their contribution to market share. And we're continuing to grow. And by estimates, when we look at the year-to-date, we're continuing to see the same trend. We grew a couple percent. Everybody shrunk a couple of percent. And so that is the historical viewpoint. And so that's good for us. If you're outpacing the industry, that's great. But to be fair, we've got to get outside of the industry to drive growth. Whereas we feel that the rest of the folks in our industry are not doing, they're doing the same thing over and over again, and we've got a clear strategy for next year on what we're going to do. To address that. And that's adding some of the components we talked about. The social change in the reporting metrics and being very dynamic in real-time. There. But lastly, the other part of it is I think the hope for the industry as a whole and will benefit significantly from this is what AI is doing to content that needs to be run through LLMs. And they're using it for brand credibility, they're using it for industry knowledge and research. And the two fundamental points that every LLM is saying is press releases and blog content are the two driving factors. So we spent a good amount of time in what the new SEO, PPC world is calling GEO and AEO. To index releases that are being contributed, and we're one of the top newswires now contributing content to these platforms for all of our customers. And so we think that's going to lead to more volume in the industry, but it also gives us the competitive advantage to push ahead faster than everybody because folks are going to rely upon us for that AI query content. So hopefully, Luke, that helps with a lot of data. Happy to unpack some of it if you'd like.

Q: Got it. For sure. I appreciate the perspective there and kind of the background on how that's trended over the last couple of years. You guys did mention some cost savings with the sublease of a corporate office. Potentially a $300,000 a year in cost savings. Are there any more kind of cost synergies throughout the business? Or any more costs that you're kind of looking to right-size here now that you've sold the compliance business and rebranded under the ACCESS Newswire brand? Just how are you thinking about the cost structure now versus maybe a year ago?

A: Yeah. I think we've done a really good job in the last six to nine months of pulling down the OpEx. As we said, we would the lease was never modeled into our assumptions of future cost savings because you just don't know what you don't know on commercial real estate. I think we're really there now to enter into the sublet here beginning in January. So you'll see that as this mentioned, the $300,000 in annual savings that will come over the next two years and at least end, I think, at the 2027. Give or take a month at the end there. We may see some other small and consequential savings to be fair. A lot of it coming from our infrastructure as it relates to the delivery of our applications. Consolidating into different platforms and cloud-based systems that we may see some benefactor. Our webcast platforms went through significant upgrades over the past quarter or so. It's also yielding some savings that we'll see. You know, I don't want to give a percentage for guidance, but I'd say you're probably going to see another, you know, $30,000 to $50,000 a quarter in additional savings. But I think, again, to us, it's such a nominal amount. I'd rather reinvest that for growth than message that we're going to continue to drive down OpEx. We've got to deliver on our platform. We have to deliver on a customer-first approach and continue to be that marquee provider for our customers. And although generating cash is a beautiful thing, we need to grow. And I think that's the most important thing for us.

Q: Got it. Awesome. And then could you also just kind of talk about how has the marketing strategy changed since the sale of compliance and the rebranding either between just kind of the sales-led growth or product-led growth here? As of late, I guess.

A: Yeah. It's a consolidated mess. And we struggled for a couple of years prior to rebranding being the public company company. And that's an honorable thing. We started our business there, and we'll never forget what Issuer Direct was able to afford us. To get to where we are today. But as we look at our client numbers, the majority of our customers for the better part of the last five years have been private enterprise. And it is difficult to go into them underlying contracts with Issuer Direct, and ACCESS Wire and Newswire and Direct Transfer and all these other names that we had we needed to slim down the business or, I guess, the basketball term is, you know, go small to get big. Right? And so we had to do this. We wanted to do this for a couple of years. A lot of our shareholders knew that. So today, our teams go to market as a consolidated business unit that's focused on communications, brand building, and storytelling, and monitoring under the ACCESS name. And it's a cleaner story to tell. It's an easier product solution to sell. It has not disrupted our public company customers. We haven't lost public company customers as a result of doing this. Our brand is stronger than ever. When we did market research before rebrand and post rebrand, we generate more traffic to our platforms. We generate more traffic to our customers' news articles. We generate more engagement than we ever have, and eighteen years prior to doing this. So the rebrand has been a very good thing for our business. It has matured us significantly and the external view of who we are. And what we do. Strategically, ACCESS Newswire is the name, and probably over the next year, people will know us as ACCESS. And that is going to be a deliberate attempt to what we're trying to accomplish here from our public relations and investor relations platform. So to be fair, we couldn't be happier about it. And continue to push the theme that our marketing department has come up with of, you know, we love you more and we're going to service our customers regardless of how much AI is in the industry. It's always a human touch, we're going to do that.