National Research Corp. Q2 FY2023 earnings call

• Over past quarters, expanded sales force and marketing for human understanding program. In Q2 2023, new sales increased 53% y-o-y. One-third of human understanding program clients are new logos, two-thirds from existing clients with 12% contract value growth. • Revenue decreased, but TRCV and margin improvements noted. Implemented cost alignment changes for future margin improvement. • Board maintained capital allocation priorities including funding innovation, growth, dividends, and share repurchases. In Q2 2023, funded $4.2 million for innovation/growth, $3 million for dividends, and $1.8 million for share repurchases.

Revenue for the second quarter of 2023 decreased by 3% compared to the second quarter of 2022, partially due to closure of Canadian operations and discontinuation of non-core solutions. Ended the quarter with $146.6 million in TRCV, with a 1% increase in TRCV for core solutions. Operating income decreased by 19% y-o-y, but there was a 2.4% gross margin and 1.2% operating income margin improvement from Q1 2023. Effective tax rate was 23% in Q2 2023 compared to 25% in 2022, due to increased tax benefits from share-based compensation.

• Implementing other cost alignment changes to enable continued quarterly margin improvement in future quarters.

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated. For further information, see company’s filings with the Securities and Exchange Commission.

Q: Hello and welcome to today’s National Research Corporation Second Quarter 2023 Earnings Call.

A: [Operator instructions, then Kevin Karas and Linda Stacy's remarks] Q: This concludes today’s conference call. Thank you all for your participation.

A: [Operator closing]