National Research Corp. Q4 FY2022 earnings call

• NRC Health has been committed to humanized healthcare for almost 42 years, with innovative solutions like patient-centered care, market insights, etc. • Received Best in KLAS 2023 Award for Patient Experience Improvement. • Board of Directors has capital allocation priorities focusing on funding innovation and growth investments, including M&A and internal projects.

Revenue for the fourth quarter 2022 decreased slightly compared to Q4 2021, primarily due to the scheduled closure of the Canadian location. Core offerings year-over-year had 7% growth, partially offset by phase out of Canadian operations and non-core offerings, resulting in net 2% revenue increase for 2022 over prior year. Operating income decreased by 5% in Q4 2022 and 7% for full-year 2022 due to expense increases. Fourth quarter other expense increased mainly due to $2.6M reclassification of cumulative foreign currency translation adjustment. Effective tax rate in Q4 2022 was 30% vs 23% in 2021. Ended the year with $146.8 million in TRCV (total revenue projected under all renewable contracts for next annual renewal periods).

• Share repurchases slowed in Q1 2023 as share prices increased. • Dividend payment is a quarterly Board decision. • Capital expenditures expected to increase in 2023 due to renovation expenses for corporate headquarters building in Lincoln started in 2021.

Q: Comment on the uptake of human understanding broadly across client base in last quarter?

A: Continued increase in adoption, with 4 new organizations added in Q4, including 2 new clients and 2 conversions from existing customers, cumulatively 11 organizations adopted the program.

Q: Breakdown of core offering increase of 7% in terms of pricing, cross-sells, new clients?

A: Majority of 7% growth attributed to price increases and upsells/cross-sells to existing client base, with average price increase of 2.5%-3% per year.

Q: Comment on capital expenditure expectations for 2023?

A: Share repurchases slowed in Q1, dividend is quarterly Board decision, capital expenditures to increase due to corporate HQ renovation in 2023