NRC Health (NRC) investor relations material

Business overview and market position

• Provides healthcare experience management solutions, leveraging feedback from patients, employees, and consumers to improve outcomes and operational efficiency.

• Operates with 99% recurring revenue and $152 million in annualized recurring revenue, serving 75% of the top 100 health systems.

• Recognized as the top provider in its niche by KLAS Research, with a 45-year history and strong presence in the U.S. healthcare market.

• Differentiates through platform breadth, subject matter expertise, and high trust, including HITRUST certification.

• Offers a three-pillar value proposition: insights, engagement, and enablement, with products spanning patient and employee experience, reputation management, and workflow tools.

Financial performance and growth strategy

• Achieved 13% annual recurring revenue growth as of March, with healthy 28-29% EBITDA margins and strong free cash flow conversion.

• Market opportunity estimated at $5 billion, with significant cross-sell and new logo potential, especially in underpenetrated segments.

• Investing in AI and product innovation, particularly in high-growth areas like the rounding tool, and increasing R&D spend.

• Transitioning contracts to longer terms, with nearly half now three years or more, enhancing revenue predictability.

• Maintains a manageable 2x leverage, prioritizing reinvestment, dividends, and share buybacks for capital allocation.

Competitive landscape and operational updates

• Main competitors include Qualtrics (horizontal, multi-industry) and Press Ganey (healthcare-focused), with recent consolidation as Qualtrics acquired Press Ganey.

• Differentiates from consulting firms and smaller players through integrated software, data assets, and regulatory expertise.

• Salesforce revamp is largely complete, with ongoing tweaks to optimize structure and coverage.

• Recently secured a major healthcare system client for patient experience and rounding products, with revenue expected to begin in July following upfront investment in customer success.

• Regulatory frameworks like CAHPS and CMS rebates are integral to the value proposition, creating barriers to entry.