NRC

CEO Trent Green noted strong Q1 performance with TRCV growth, new sales bookings up over 200% due to a landmark deal, and improved customer retention. The landmark deal is a validation of strategy, involving multiple product families. Celebrated 45th anniversary, with focus on being trusted guide for healthcare built certainty, honoring NRC's heart with AI, and investing in enablement tools. CFO Shane Harrison discussed TRCV growth, revenue trends, profitability, large deal phased implementation, Q2 charge related to executive equity agreements, and capital allocation priorities including investing in NRC, evaluating acquisitions, and returning capital to shareholders.

Large deal to be implemented in two phases, Q2 expected adjusted EBITDA margin flat sequentially, margins to expand in Q3 and beyond as revenue reflects TRCV trend. CapEx expected to be around $1 million to $1.5 million per quarter going forward. Long-term goal to get adjusted EBITDA margin back to low 30s midterm and mid 30s longer term by leveraging growth and reinvestment.

Total recurring contract value (TRCV) for Q1 2026 was $152.1 million, up 13% year-over-year and 5% sequentially, an all-time high. Revenue was $34.8 million, up 4% year-over-year, the first year-over-year revenue growth since 2023. Adjusted EBITDA was $9.4 million, representing a 27% margin, 230 basis points higher than Q4. Adjusted net income was $4.6 million, resulting in an adjusted EPS of 21 cents per share. Free cash flow was up nearly 50% year over year to $5.3 million.

Actual results may differ materially from expectations due to risks and uncertainties in earnings release and SEC filings, including those related to the Q2 $9.4 million charge from executive equity agreement changes.

Q: JP Gurney asked about expansion opportunity from existing customer base and go-to-market strategy evolution.

A: Trent Green said go-to-market success due to sales enterprise reorganization, catalyzing cross-product sales conversations, using analysis like trust gap to illustrate product connectivity, and rounding solution opening doors.

Q: Will Nazgovitz asked about CapEx outlook and margin guidance, and about competitors' combination and role in value-based care.

A: Shane Harrison said CapEx to be around $1 million to $1.5 million per quarter, Q2 margin flat due to phase one delivery cost, Trent Green said competitors' deal may slow some processes but not significantly, and NRC's tools help with value-based care by enabling outcomes improvement and cost reduction.

Q: Josh Peters asked about longer term financial model and product enhancements.

A: Shane Harrison talked about long-term margin improvement through growth and reinvestment, Trent Green discussed product enhancements driving from insights to action, including experience platform, rounding, service recovery solutions, and governance institute board assessment tool refresh.