National Research Corporation (NRC) Q4 2025 Earnings Call Prepared Remarks Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture. While there are positive aspects such as dividend increases and strategic growth initiatives, the revenue decline and TRCV attrition pose significant challenges. Despite strong execution in some areas, the financial health is impacted by declining revenue and increased expenses. The Q&A section does not provide additional clarity, suggesting uncertainty. Considering these factors, the stock price is likely to remain stable over the next two weeks, with a neutral sentiment prevailing.
Key Financial Performance
Revenue (Q4 2025) $35 million, down 5% year-over-year. The decline was attributed to unusually heavy TRCV attrition experienced in Q3 2024, which continued to recognize revenue through Q4 2024, creating a difficult comparison for Q4 2025.
Adjusted EBITDA (Q4 2025) $9 million, reflecting strong execution across sales and customer success teams.
Total Recurring Contract Value (TRCV) $144 million, up 8% year-over-year. Growth was driven by strong execution across sales, customer success, and product teams, as well as a refined sales team structure and improved customer engagement.
Full Year Revenue (2025) $137.4 million, down 4% from 2024. The decline was expected due to elevated TRCV attrition in the second half of 2024.
Adjusted EBITDA (Full Year 2025) $40.2 million, representing a 29% margin. Despite the revenue decline, the company maintained its margin profile through disciplined cost management.
Adjusted Net Income (Q4 2025) $3.4 million, reflecting the company's ability to manage costs and maintain profitability.
Adjusted EPS (Q4 2025) $0.16 per share, consistent with the company's financial performance.
Adjusted Net Income (Full Year 2025) $20.7 million, showcasing the company's strong financial profile.
Adjusted EPS (Full Year 2025) $0.93 per share, reflecting the company's profitability and financial health.
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Operating Highlights
Rounding Solution: Integrated into the platform, this workflow-driven solution guides care teams using historical and real-time feedback. TRCV for Rounding nearly doubled in 2025.
AI-Powered Innovations: Introduced AI capabilities for sentiment analysis, comment summarization, and service recovery. Beta release of AI-powered listening capability within Rounding solution.
New Logo Growth: Expanding into new markets and use cases beyond the historical footprint, leveraging differentiated data assets and insights.
Cross-Sell Opportunities: Deepening relationships with existing customers to expand adoption of enablement, strategic insights, and governance solutions.
Sales Team Reorganization: Full year new sales increased 86% year-over-year due to a refined coverage model aligning with healthcare system structures.
Customer Success Initiatives: Achieved the highest gross dollar retention rate in over 7 years by strengthening relationships with key users and decision-makers.
Leadership Expansion: Hired David Burik to lead strategic insights and governance strategy, bringing over 30 years of healthcare consulting experience.
Capital Allocation Strategy: Focused on investing in business growth, returning capital to shareholders, and pursuing strategic acquisitions to expand market reach.
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Risk or Challenges
Revenue Decline: Revenue for 2025 was $137.4 million, down 4% from 2024, attributed to elevated TRCV attrition in the second half of 2024. This decline poses a challenge to achieving revenue growth in the short term.
TRCV Attrition: Unusually heavy TRCV attrition in Q3 2024 continued to impact revenue recognition into Q4 2025, creating a difficult comparison and highlighting retention challenges.
Operating Expense Increase: Q4 operating expenses were higher than the prior year due to the timing of the annual customer conference, which could pressure margins if not managed effectively.
Market Complexity: Health care providers are navigating an increasingly complex operating environment, which could impact NRC's ability to maintain or grow its customer base.
Retention Risks: Although retention rates reached a 7-year high, there is still room for improvement, and any decline in retention could adversely affect recurring revenue.
Competitive Pressures: The health care industry is highly competitive, and NRC must continue to innovate and differentiate its offerings to maintain its market position.
Economic Uncertainty: Broader economic uncertainties could impact health care budgets and spending, potentially affecting NRC's revenue and growth opportunities.
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Guidance & Outlook
Revenue Growth: Revenue growth is expected to follow the 8% TRCV growth in 2025, indicating confidence in revenue recovery in 2026.
Go-to-Market Restructure: The restructured go-to-market model is expected to scale and act as a meaningful tailwind for growth through 2026.
Enablement Solutions: Enablement solutions, including the Rounding product, are anticipated to be a durable growth engine, with TRCV for Rounding nearly doubling in 2025. There is significant opportunity to expand into areas like quality, safety, and discharge planning.
Product Innovation: Continued investment in product innovation, particularly in AI capabilities, is expected to deepen differentiation, expand the addressable market, and deliver measurable ROI to customers. AI-powered features like sentiment analysis and real-time feedback are being enhanced.
Cross-Selling Opportunities: Cross-selling of enablement, strategic insights, and governance solutions is seen as a significant growth opportunity as customer relationships deepen.
Retention Improvements: Despite achieving a 7-year high retention rate, there is room for further improvement by solidifying customer success initiatives deployed in 2025.
New Market Expansion: Expansion into new markets, use cases, and buyers beyond the historical footprint is expected to drive long-term growth.
Capital Allocation Strategy: The company plans to invest in business and technology, return capital to shareholders through dividends and share repurchases, and pursue strategic acquisitions to expand the addressable market and reinforce competitive positioning.
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Shareholder Return Plan
Quarterly Dividend: During the fourth quarter, NRC paid a quarterly dividend of $0.12 per share.
Annual Dividend: The company maintained its commitment to returning capital to shareholders through consistent dividend payments.
Share Repurchase Program: NRC employs opportunistic share repurchases to offset dilution and enhance per share returns.
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Key Q&A
Q:Review of Unclear Management Responses
A:
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI
CEO
Governance Institute
NRC Health
TRCV
Trent
capability
care leader
customer success
decision
enablement solution
engagement
experience
expertise
framework
governance
health care
health system
insight action
market
model
momentum
opportunity
organization
platform
portfolio
position
product
profile
proposition
relationship
release
retention
sale customer
solution insight
team
technology
trust
NRC Transcript
National Research Corporation (NRC) Q4 2025 Earnings Call Prepared Remarks Transcript
Unknown2-3
The earnings call presents a mixed picture. While there are positive aspects such as dividend increases and strategic growth initiatives, the revenue decline and TRCV attrition pose significant challenges. Despite strong execution in some areas, the financial health is impacted by declining revenue and increased expenses. The Q&A section does not provide additional clarity, suggesting uncertainty. Considering these factors, the stock price is likely to remain stable over the next two weeks, with a neutral sentiment prevailing.
National Research Corporation (NRC) Q3 2025 Earnings Call Prepared Remarks Transcript
Positive10-28
The earnings call highlights strong financial performance with 11% revenue growth, improved customer retention, and a significant increase in dividend payments. The strategic focus on technology modernization and cross-selling indicates robust future growth potential. Despite regulatory and competitive risks, the company's positive operational metrics and shareholder returns suggest a positive stock price movement.
National Research Corporation (NRC) Q1 2024 Earnings Call Transcript
Neutral5-11
National Research Corporation (NRC) Q3 2023 Earnings Call Transcript
Unknown11-8
The earnings call highlights increased costs, slight revenue growth, and a decrease in operating income. Workforce reductions pose operational risks, and client cost sensitivity may limit pricing flexibility. Despite a slight increase in operating margin and a strong dividend payout, the overall financial performance and guidance appear weak. The Q&A session did not provide additional positive insights. These factors suggest a negative stock price reaction in the short term.
NRC Report
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