National Research (NRC) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 2024 was $35.8 million, down from $37.9 million in Q3 2023, mainly due to decreased US recurring revenue and non-core solutions.

• Net income for Q3 2024 was $5.7 million, a 28% decrease from $7.9 million in Q3 2023.

• Operating income for Q3 2024 was $8.0 million, down 20% from the prior year period.

• For the nine months ended September 30, 2024, revenue was $106.2 million, a 4% decrease year-over-year; net income was $18.2 million, down 18%.

• The company acquired Nobl Health in July 2024 to expand its healthcare solutions portfolio.

Financial highlights

• Gross margin for Q3 2024 was 22%, down from 26% in Q3 2023.

• Net indebtedness at September 30, 2024, was $50.2 million.

• Cash and cash equivalents at quarter-end were $3.5 million.

• Recurring contract value declined to $131.6 million from $144.3 million year-over-year.

• Cash provided by operating activities for the nine months ended September 30, 2024 was $28.2 million, up 7% year-over-year.

Outlook and guidance

• Management expects continued investment in AI and Human Understanding solutions, with ongoing cost efficiencies targeted.

• Other expense is expected to increase due to additional borrowings and higher interest rates following the August 2024 credit agreement amendment.

• The company believes existing liquidity sources are sufficient to meet projected capital and debt maturity needs for the foreseeable future.