ACCESS Newswire Stock

Welcome to ACCESS Newswire's Second Quarter 2026 Earnings Conference Call. My name is Forrest MacConnell, and I'm a product manager here at ACCESS Newswire on the IR product team. I've been with the company since 2021, initially joining what was then our onboarding team, which has since evolved into our customer experience team. Today, I lead our Investor Relations products and services across websites, newsrooms and shareholder engagement, supporting hundreds of our public company customers as well as emerging companies preparing to enter the public markets. Additionally, my team and I also managed the New York Stock Exchange subsidy Whistleblower product and implementation for some of the world's largest and most recognizable brands. My time here at ACCESS has been incredibly rewarding, and I couldn't be more excited about what's ahead for our customers, for our company and for my team as we continue to grow and evolve our products and services.

Before we begin, we'd like to remind everyone that statements made in this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships and any other statements that may be construed as predictions of future performance or events are forward-looking statements. These statements involve known and unknown risks and uncertainties as they may cause actual results to differ materially from those expressed or implied by such statements.

We will also discuss certain non-GAAP financial measures, which are provided for informational purposes and should be considered in addition to, not as a substitute for GAAP results.

With that, I'll turn the call over to our Founder and Chief Executive Officer, Brian Balbirnie; and our Chief Financial Officer, Steven Knerr.

Thank you, Forrest, and good morning, everyone, and thank you for joining us to discuss our second quarter 2026 results.

Let me start with the headline number. Second quarter revenues was $5.6 million, up 5% sequentially from $5.3 million in the first quarter and essentially consistent with the second quarter of last year. Core press release revenue increased 2% year-over-year which tells us that the underlying engine of this business remains healthy. That was offset, however, by lower revenues from our webcast business where we saw fewer virtual annual meetings and less reseller activity.

I want to spend a moment on where we made our real progress. Average ARR per subscription customer was $12,718 at the end of the quarter, up from $11,039 a year ago, a 15% increase and another quarter of ARR growth. This is the clearest evidence of our platform strategy, moving customers on to higher-value tiers continues to work. That progress is being driven by the products that we built and have brought to market over the last 90 days. Our social monitoring platform and our new insights and analytics report are both live and early adoption is encouraging. We expect to release several more products before year's end, and our focus is now turning that innovation into subscriber and revenue growth in our subscription business. Steve is going to walk you through the numbers in detail, and then I'd like to touch on a few topics from the first half of this year and what our priorities are for the second half of the year. Steve?

Thank you, Brian, and good morning, everyone. I will now take you through the second quarter and first half 2026 financial results.

Total revenue for the second quarter of 2026 was $5.6 million, an increase of approximately $291,000 or 5% compared to Q1 2026 and essentially unchanged compared to Q2 2020. The sequential increase was primarily driven by a 10% increase in volume from our core press release business, reflecting the seasonal pattern we typically see following the first quarter. Core press lease revenue increased 2% compared to Q2 2025, while lower revenue from our Pro Plan customers partially offset that growth. Webcasting revenue was also lower compared to Q2 2025 due to fewer virtual annual meetings and reseller activity.

For the first 6 months of 2026, total revenue was $10.9 million, down $152,000 or 1% from $11.1 million in the first half of 2025. The year-over-year decline was primarily attributable to lower webcasting and Pro Plan revenue. Importantly, revenue from our Core press release business increased 1% for the first half of 2026 compared to the same period last year. Gross margin for Q2 2026 was $4.1 million or 73% of revenue compared to $4 million or 74% of revenue in Q1 2026, and $4.3 million or 76% of revenue in Q2 2025. The first half of 2026 gross margin was $8.1 million or 74% of revenue compared to $8.6 million or 77% of revenue in the first half of 2025. The year-over-year decline in gross margin percentage primarily reflects higher press release distribution costs from a combination of new partners price increases from existing partners and additional usage under variable contracts. As Brian will discuss, we have implemented initiatives designed to reduce cost of revenues by approximately $150,000 in the back half of the year.

Moving to operating expenses. Total operating expenses were $4.4 million in Q2 2026, down slightly from $4.5 million in Q2 2025. For the first 6 months, total operating expenses were $9.1 million, down approximately $0.4 million or 4% from $9.5 million in the first half of 2025. We continue to balance cost discipline with targeted investment in areas we believe can support future growth. General and administrative expenses were $1.35 million in Q2 2026, down $402,000 or 23% year-over-year. For the first half of 2026, G&A expenses were $3.1 million, down $574,000 or 15%. The decrease reflects lower nonrecurring expenses, stock-based compensation and bad debt expense as well as lower insurance and office costs following the sale of the compliance business and our move to remote work environment. Sales and marketing expense was $1.9 million in Q2 2026, up $427,000 or 29% compared to Q2 2020.

For the first half of 2026, sales and marketing expense was $3.6 million, up $514,000 or 17%. This increase reflects our deliberate investment in advertising and trade shows as we work to convert our product innovation into customer and revenue growth. Product development expense was $533,000 in Q2 2026, down $122,000 or 19% year-over-year and $1.1 million for the first half of 2026, down $295,000 or 21%. The decrease was primarily due to higher capitalized software costs. We capitalized $110,000 of software development costs in Q2 2026 and $209,000 for the first 6 months of 2026 compared to $0 and $23,000, respectively, in the comparable periods of last year. The costs mostly reflect the investment we made in our social monitoring and insight and analytics enhancements that we rolled out during the second quarter, as well as some additional enhancements Brian will speak more about.

Operating loss for Q2 2026 was $307,000 compared to $249,000 during the second quarter of 2025. For the first half of 2026, operating loss was $1 million compared to $926,000 in the first half of 2025. The year-over-year change was primarily driven by lower gross margin, partially offset by lower operating expenses. On a GAAP basis, net loss from continuing operations was $354,000 or $0.09 per diluted share for Q2 2026 compared to $239,000 or $0.06 per diluted share during the second quarter of 2025. For the first 6 months, net loss from continuing operations was $965,000 or $0.25 per diluted share compared to $1 million or $0.26 per diluted share in the first half of 2025.

On a non-GAAP basis, EBITDA was $0.5 million or 8% of revenue for the second quarter of 2026 compared to $0.5 million or 9% of revenue during the second quarter of 2025. Adjusted EBITDA was $0.6 million or 11% of revenue for Q2 2026 compared to $0.8 million or 15% of revenue in Q2 2025. Non-GAAP net income was $0.3 million or $0.08 per diluted share during the second quarter of 2026 compared to $0.6 million or $0.14 per diluted share in the prior year quarter. Adjusted free cash flow was $50,000 for Q2 2026 compared to $250,000 in Q2 2025. For the first half of 2026, EBITDA amounted to $0.5 million or 4% of revenue, consistent with the first half of 2025. Adjusted EBITDA was $1.2 million or 11% of revenue compared to $1.4 million or 13% of revenue in the prior year period. Non-GAAP net income was $0.7 million or $0.18 per diluted share compared to $0.8 million or $0.20 per diluted share last year. Adjusted free cash flow was $1 million for the first half of 2026 compared to $1.2 million for the first half of 2025. Cash flow from operations was $173,000 in Q2 2026 compared to $135,000 in Q2 2025.

We ended the quarter with just under $3 million in the bank, and Brian will talk a little further about our share repurchase activity, which was ongoing during the quarter. Deferred revenue balance, which we expect to recognize over the next 12 months, was $5.1 million as of June 30, 2026, compared to $5.3 million at December 31, 2025. As we enter the second half of the year, our financial priorities remain consistent: maintain operating disciplines to invest selectively behind the product and go-to-market initiatives that can drive revenue and subscription growth and continue to strengthen the economics of the business. The progress in subscription ARR per customer continued positive adjusted EBITDA and our focus on cost efficiencies gives us a solid foundation as we work to improve top line performance.

With that, I will turn it back over to Brian.

Thanks, Steve. To expand a few points to what Steve mentioned, let me try to tie to actionable results that you will see in the back half of this year as well as the things that we have planned on our radar. But first, I want to begin by discussing a little bit about our capital allocation, specifically our share repurchase plan, which has continued nicely this quarter. We repurchased 40,000 shares for a little over $300,000 in the quarter, pushing our total repurchase results since December '25 to 90,000 shares or $700,000 as of today. This leaves us roughly $300,000 in the plan to be used here this quarter. The buyback has resulted in us returning over 2% of our common shares outstanding to date. Once the plan is completed, the Board of Directors will review the company's performance, share price and liquidity; and if all continues to align, we will institute another repurchase plan. It is my belief that we will continue to be active in buybacks as we continue to run the business with the cost discipline you have seen from us here this year, which has resulted in a 23% reduction in G&A this quarter.

Additionally, as Steve mentioned, we have also undertaken steps to implement cost savings initiatives that we expect to reduce cost of revenue by approximately $150,000 in the back half of this year or 125 to 150 basis point improvement. Cost cutting is not our singular motive. The cost of revenue savings is being deployed around the business, specifically in sales and marketing with our new hires to fuel customer acquisition and top line revenue growth for the future, something that we will watch and work hard to deliver both in growth and customer accounts at the same time, maintain or reduce our customer acquisition costs. Having the incremental gross margin savings and anticipated customer revenue growth will help us also improve to move our gross margins back into the higher 70% range in the back half of the year. We are expecting these new products that will be released the rest of the year as well as average initial purchase increasing as the 2 drivers to this expectation.

For the quarter, both our social monitoring add-on and our new Kilda report now called Inside Analytics performed well. Specifically, the new insight and analytics is driving average purchases higher, seeing several hundred customers opt to upgrade to this new actionable insight dashboard. We have learned a lot in the past few weeks that this report has been available to our customers and intend to continue to push the envelope in leading the industry in report engagement, brand monitoring and real-time actionable sentiment. Social monitoring also solidified a missing component of our platform and will help us push our offerings to a broader audience in the future, specifically under some of our brands like pressrelease.com, where customers will be able to begin buying social monitoring for 30 days to try before committing to a full annual subscription. We believe this will help our smaller SMB customers understand and derive value from our platform without the bigger commitment upfront.

Now what is coming. We have a full product road map for the second half of the year. I will try to touch on a few key components, but be sure to be watching for our marketing messaging and press releases to learn more. On the Investor Relations side of the business, we have 2 products ready in the queue. The first is an extension of our commitment to excellence and really a part of our ACCESS Verified solution that we rolled out earlier this year at no cost to our clients. This is geared towards our reporting and publicly traded customers whereby they can submit the earnings release or really any financial release into our Access Verified for Financials platform and get back an assurance report, what our platform is looking for the consistency of financial tables into and with the narrative to be sure that every representation of a financial metric is accurate, crossed, tick, tied and consistent throughout the document. We have tested this with hundreds of customers earnings releases from the past, worked with our Investor Relations community and audit firms to gather feedback and are excited to bring this to market this coming week.

Second, on the IR product front, we'll begin our upgraded ACCESS events platform, where we are upgrading our events workflow technology into and with our ecosystem. This new upgrade will allow customers to preschedule their entire year's earnings calls, advisory releases for earnings announcements and move between shared solutions from our PR and IR in a seamless way. Our continued commitment is to have 2 new upgrades to our customers each quarter, one that improves communication workflow and technology by allowing our customers to tell their stories easier and with more options at no additional cost. And a second, whereby we provide a value add on and a small incremental increase in the press release, actionable or subscription business. By doing this, we feel we will continue to drive value to our customers beyond what the market is doing and also put us in a position to have the opportunity to garner higher revenues as the incremental products are utilized.

On the public relations side of the business, we have a new content distribution component, we think is going to be spectacular, both not only in the future, but truly well beyond and where we're headed as a business. The first initial rollout is going to give customers the ability to expand upon time to distribution of a press release to a broader audience without all the complexity of human capital time to accomplish this. This new feature will give customers the ability to select any social platform, journalist group and tailor their messages to those audiences within our platform rather than going to several different tools to post press releases and everything else to accomplish this. In early Q4, our customer is going to have the option to add on our new ACCESS content studio or at least the initial version of this fully robust MCP supported product. The content studio will connect to your social accounts, build an FAQ of your business and brand message for that press release, Sketch out of white paper and Newsletter Block and format all of these options to automatically be delivered to your audiences wherever they consume your message and content. We see this opportunity to roll this out to our customers at a 10% to 15% increase in current subscription. The value of the customer is going to be significant.

First, they will have one central real-time platform for all their engagement analytics, story generation, audience building and targeting wrapped into one. This innovation will lead us to a full studio toolbox concept that we have spoken about recently by the end of the year and into next year, we'll be releasing.

As I said earlier, we have a full product pipeline that is robust and tied to our revenue growth strategy over the next couple of years. It is not easy to articulate all of these in what we're doing while remaining competitively agile as one of the only publicly traded newswires. Customer numbers were up 24% in Q2 for this year compared to last year, an increase of 6% over the prior quarter as well. Where I'm most encouraged is in the private customer growth that we achieved this quarter. This is largely being driven from our e-commerce initiatives as private company brand platforms. As we continue to learn from these customer needs, we feel very good about moving a fair percentage of these customers into subscribers over the next 12 months. Today, it's about delivering for them, helping build their stories and educating them on the immense opportunity our platform can bring to a brand when they're seeking to find coverage and exposure. But it's critical to listen to them today, so we're afforded these opportunities in the future.

And Q2 ARR increased 15% year-over-year from $11,039 to $12,018, as Steve and I said previously, pushing subscriber revenue 23% higher for the prior period. We also ended the quarter up in total subscriptions ending with 1,162 up 4% from 1119. Retaining these customers is critical to our long-term business Retention for the quarter was 94%, up 2% from the end of Q1 this year and 3% prior year quarter. Our net revenue retention has also continued to grow since last year and now ended Q2 at 124%. It'd be nice to guide improvements here in retention and net revenue retention, but our focus in the back half of the year is going to be on new subscriptions while maintaining this threshold for current customers in the back half.

Additionally, we continue to focus and refine our other revenues and learn how we can move these customers into lower tier subscriptions. Like we have said before, these are reoccurring at the time of delivery revenue customers that do commit to a fixed amount of dollars spread over a fixed period. That business today is approximately 40% of our overall revenues or nonsubscription revenue, if you think about it that way. And while we have planned in the second half of the year, we will see our recurring revenue business, our ARR business, get closer to the 80% number where we want to be this time next year. So why are all these new products, metrics or customer growths and increased investment in sales and marketing important? Well, Gartner recently published a report that speaks to the PR industry, calling it to double by the end of 2027. AI being a significant contributor to this. This is exactly what we have been saying to our shareholders late last year and early this year. We independently also have a view that this market is going to return to double-digit growth in 2027 and beyond, and we intend to capture it. Yes, AI is enabling this, but the number of new businesses being formed is also driving this assumption. This is coming from the research that we've done that we'll refer to as the hustle generation. This is tied to tiers right between Gen Z and Millennials. These are the new decision makers in the IR, PR landscape, and our growing number of these have both regular career positions and side hustles, resulting in these additional businesses being registered and needing help tell their stories with products that we brought to market this year, like social monitoring and our insights and analyst reports that have contributed to revenue in the second quarter.

Although I'm not fully satisfied with the overall results in the second quarter, I am proud of the advances that we've made and we continue to enter a new phase for ACCESS. We have one of the most comprehensive investor relations and public relations platforms in the industry that can be between both public markets and private enterprises globally. We remain confident in our ability to continue to strengthening our competitive position from here. I want to thank our teams, customers, partners and shareholders for their trust and ongoing support that allow us to bring access into every company in the world.

With that, I'll turn the call over to the operator for questions. Operator?

[Operator Instructions] And the first question today is coming from Luke Horton from Northland Securities.

I just wanted to touch on pricing. As you think about all of these product enhancements kind of slated for the back half of the year, how are you kind of layering in any pricing increases or add-on pricing? Or just how do you think about pricing in general, given the product enhancement slated for this year and going forward?

Yes. Luke, it's Brian. Yes, each of the products that we've released already, the insight and analytics and social give customers the ability to try before you commit and have a different pricing here. So let me try to walk through a couple of them. In the Insight and analytics, for example, are customers that are paying for a press release as they get to consume it without a long-term contract or subscription, have the option to add it to any press release for an additional fee. So there's an incremental increase. We're seeing the benefits of our average price per release increase as a result of that. We think that's going to continue to get better. It's about 600-plus insights and analytics reports will run during kind of half of the Q2 period that we released that product.

Our social monitoring, for example, initially was rolled out as an upgrade for $200 a month for our subscriber clients. They had the option to opt into that. Starting next month, we're going to move that product to, I think I said earlier on our pressrelease. com platform to give customers the ability to try before they commit to a longer-term contract. So like I said, we're hopeful that each of the quarters going forward over the next 6 to 8 quarters, we're going to have 2 products, one that further identifies the moat that we're building for our platform to give our customers more ability to establish their brand voice in their story in the press release without any additional cost. And then a very competitive product advancement that has an economic benefit to us. So this always ties back to our strategic view a couple of years ago when we guided to $15,000 in ARR, we have a product pipeline that will get us there. So the content studio will be another incremental $200 to $300 a month. The customers can add this on, and then the toolkit at full release next year will drive even more value. And that's not to say that we may not release a couple of additional things along the way that, again, have a no charge benefit to give our customers some value and keep them sticky.

Okay. Great. That's helpful. And then I guess just on the kind of sales efforts here, I guess, how much of the focus is growing with your existing client base versus kind of outbound sales efforts and any of these product enhancements specifically geared towards kind of customer acquisition or more so just kind of giving them a better product and growing with existing customers.

Yes. The investment in sales and marketing is really kind of a bifurcated model. So it's very comprehensive and Steve mentioned it earlier in his prepared remarks. For the first half of the year, we've probably spent 50% more in trade shows and conferences, right? Getting ourselves out there into the field to start to talk to customers on the street, understand their needs, what they're looking for and build our brand to help drive pipeline for us an opportunity. On the flip side, from a sales investment, we've hired more head count in our sales teams to be able to handle the number of inbound leads. And so conversely, for the past year, we've been focused on how do we take a customer from $10,000 to $11,000 to $12,000 in ARR. How do we convert customers from a bundled package or press release to add ARR subscription model. And we've done that, I think, relatively well. We've done it with good retention. We've done it with good dollar retention. And because of the investment in sales and marketing, now we're turning our focus more to outbound new customer acquisition to push and really deliver on the top line numbers that we want and will help fuel our growth for the future.

So it's been a little bit of both. But right now, we're really wanting to maintain our current account base. We still feel like there'll be small percentages of our customers will see value from a bundled product to a subscription, but the growth really over the next 6 to 12 months is going to come from new customers coming into the platform.

And the next question will be from Jacob Stephan from Lake Street Capital.

Solid quarter here. Maybe just building off of that last sales and marketing effort question. I guess is there a CAC or maybe a payback period that you're kind of factoring into your underwriting and I guess do you ultimately expect that shows up in subscriber trajectory throughout the back half of the year here?

Yes, we definitely do look at it, right? And we've been tracking our CAC for the better part of the last year plus as it relates to subscriptions and non-subscription customers. We kind of look at the CAC differently for both of those. The CAC paybacks on press release, incremental pay-as-you-go or e-commerce business after the first release essentially pay for themselves. It's up to our sales team to continue to manage those accounts and move them into subscriptions or repetitive press releases and bundles as they go. The CAC is you appreciate. It's a little more expensive on a subscriber because the length of time takes to convert somebody, generally a 3- to 6-month window is what you're really looking at from pipeline building. So the cost to do that is a little higher. However, it has come down over the last quarter or 2. We believe it will continue to come down. We're bullish about the industry like we talked about with what Gartner released here just about a month ago to look at what this industry is doing and seeing some of the backup data that has provided some assurances to both our strategy, Gartner's independent research as well as census data is giving us the confidence that we can continue to grow this business and not increase our CAC significantly, if anything, bring it down over the coming quarters. Something we'll likely get to talking about externally.

But like I said in one of my prepared comments earlier, as being the only publicly traded newswire, there is a little bit of competitive advantage we get by not saying too much, and I hope that our shareholders appreciate and understand that. But we want to be cognizant of both giving our shareholders and perspective shareholders, all the day that they need to make an investment decision, but also maintain ourselves a little competitive advantage against the quadrant.

No, makes sense. I guess maybe just transitioning over to your ARR per sub. I guess when you look at the sequential decrease, only about $100, but anything that's driving that? Is that lower on the higher ARPU subscriptions or more EDU customers. I wondered if you could kind of break that out for us.

Yes. I think it's the private company space. We talked about it being a big incremental push to us. We are trying to find entry points. We said it in the prior quarters. We're trying to find where there could potentially be significant scale in customer subscription members at a lower tier price. So we are going into certain verticals, trying to find a lower-priced ARR product that can get us into those markets and try to find a way to learn, iterate and scale fast. So that's the result of what it is.

To be fair, our public company customers that are renewing and adding on those they are our values are growing. Sorry, net dollar numbers are good. We're just finding a little more success at a lower price point, and we've talked about this. So I think we will continue to see some of that. What will help subside it, obviously, is the new product adds that we've got that will impact ARR. So we shouldn't see a sequential decrease as much as we'll see kind of a confined number across the board here in Q3 and then in Q4 will grow because of some of the hard dollar ARR add-ons. But not alarming for us. It's expected. We talked about it in the last couple of quarters in our calls that something that we're experimenting here.

And the next question will be from Brock Erwin from CleverInvesting.

So just thinking about the industry overall over the last several years, obviously, there's been a trend of contraction. So I'm just thinking about your forecast, not really a forecast, but you're thinking about 2027 and how you think there's a chance to the industry gets back to growth. I would say that 20% growth rate number you mentioned sounds pretty optimistic. I guess the question is like what gives you the confidence and what data points are you seeing maybe from talking to customers at trade shows that would help indicate that there is a chance that the industry grows.

And then the other thing I'm thinking about is you're talking about a lot of startups being formed around AI, and these might be smaller companies who maybe don't want to spend thousands of dollars on press releases, like to your -- I guess the question -- the previous question was talking about lower price points. So I guess, as we're moving into like a lot of AI startups being formed? Like, how are you thinking about addressing that type of customer differently from some of the public company customers that you have today?

Yes. It's -- I want to try to gather all that up, Brock, and answer it. And if I miss something, let's peel the back a little bit and do it. So the contraction of the industry over the past couple of years, again, not just for us, but the entire marketplace, I think, has really been driven upon the confusion of what it is I need as a business, whether enterprise or SMB to try to figure out how best to tell my story. There's been a significant amount of point solution entrants into the market during that time, which typically causes people to slow down in decision-making processes because there's so much. That noise is starting to move itself away and customers are now saying, "Okay, let's get back to basics." This is what we're being told out in the field?

And because of AI, what do we need to be doing differently? Our press release is being featured and seen in citations and LLMs and listicles. And if they are, who does the best? And if it -- who does it best, we need to go there, that's our North Star. And so we're trying to position ourselves to be that entity. We're not trying to build a business around AI. It is an enablement of disruption for the tools and the services that we provide to our customers. And so the example of that is this content studio, right? So you bring up the comments about being optimistic about growth of 20%. Gartner looks at this as an AI disruptor space growth. Our large enterprise customers that come to us are now saying, we love your IR website solutions, your earnings call products, your press releases and all the other PR tools. But what are you doing to address our AI needs? Large enterprises are building AI teams to kind of help both from material and public information risks, to expansion of brand down the hall to the CMO and the CCO suite. So there's bigger opportunities that will come to all of us in this industry in the future as we grow.

But your second comment about startups, Brock, we feel that's where the market really is for some of this disruption potential growth because if these muscle generation people are out there, they don't have the bandwidth to do all this work. So they're going to be looking for [indiscernible] technology that could help them, whether it's on press release a month or 1 a quarter or 2 a year, they're going to need those other products. And so it's going to be less about how many press releases we sell to some of these clients. More than it is, can we give them a communications platform for them to do the things that they need because again, this is their side hustle. This isn't their primary job.

When you look at census data, right, what are our data points is another part of what you asked, we've taken our own view of the market over the past couple of years, and we said this publicly that we think it's going to get back to growth. Gartner reaffirmed that with their estimates and their analyst information. They're going to publish a Magic Quadrant here in October. We'll all take a look and see where we all sit there. But what else is out there? So we went to senses data and said, every single county in the country, 3,100-plus of them, let's figure out how many incorporations are being formed 2024, 2025 and the first 6 months of this year. And we're seeing a 14% increase in the number of corporations being formed. There's LLCs, there's [indiscernible] C Corps. We understand clearly that a percentage of those have a hair brained idea that's incorporated nothing ever happens. We know that. Some of them are formed for purposes of transactions and tax-efficient measures. We know that. But that's been consistent throughout the years. What we're seeing is that growth in that demographic we're talking about. So we're spending a good amount of time understanding that.

One of the reasons why we've been out in the space, and Steve mentioned this, investing in marketing and trade shows and conferences, we're going to events that are not public company events. That's where we spent 20 years. The last 8 months, we've been out at events that are small business expo events that they'll be in the [indiscernible] Center in New York and to the 8,000 customers, potential customers there, sponsored by Verizon and all the other big brands, and we're there as the as the press release and communications partner. So there's big opportunities for us there. That's where we see that quadrant of people moving to and looking. So I don't know if it's growth just from AI, right? I think you said that there are AI start-ups. We're not focused on those. We're focused on just that generation of gap of people looking for a side hustle and also those folks with the decision makers. They're coming in, moving guys like me out, right? The old guys, but the younger people are coming in making these decisions, and we want to be on both sides of the events for them to have a platform that they would select. I hope I covered it, Brock.

[Operator Instructions] And there were no other questions from the lines at this time. I would now like to hand the call back to Brian Balbirnie for closing remarks.

Thank you, Paul. I appreciate it. As always, I think this has been like 14 straight quarters we've been using you specifically for our event. And like all of our customers, we love that dedicated premium solution for our public company customers. I want to digest here today, a lot of data points that we provided that we typically don't provide such as market opportunities and growth love an opportunity to digest more with you and talk about this individually, just shoot me a call, an e-mail, let's set up some time to do it. We appreciate your passion from what we're building. We appreciate your commitment for what your position is in our security, and we look forward to the rewards in the future. Thank you all for today and your time.

Thank you. This does conclude today's conference. You may disconnect at this time. Thank you for your participation.

Greetings. Welcome to ACCESS Newswire 2026 Annual Shareholder Meeting. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the conference over to your host, Brian Balbirnie, Chief Executive Officer. Please go ahead.

Good morning, everyone. My name is Brian Balbirnie, and I am the Chairperson of the Board of Directors and Chief Executive Officer of ACCESS Newswire Inc., and I would like to welcome everyone to our 2026 Virtual Annual Meeting. This meeting is being webcast via our virtual annual meeting platform, the URL to which was previously circulated to all stockholders in our proxy statement.

First, let's discuss the voting process. You do not need to vote again today if you have already voted. However, if you do wish to vote today, you will find a button on your screen label to Vote My Shares. This link will allow you to vote your online shares during the meeting. This applies only to registered holders. If you are a beneficial holder, meaning that you hold your shares in street name through a broker or bank, you will need to e-mail or request a formal legal proxy to Daragh Hewitt at [email protected], who is acting as the Inspector of Elections and who is a representative of our stock transfer agent, Vinyl Equity, and he will provide you additional instructions to vote your shares.

Second, let's discuss how you can ask a question during today's meeting. If you would like to ask a question, you will see a button labeled Ask a Question on your virtual meeting platform screen that will allow you to place a question into the queue. The questions-and-answer sessions will conclude today's formal meeting.

I would now ask that the official meeting please come to order. I will serve as the chairperson for today's meeting. I would like to now introduce to you the following persons in attendance. Our Audit Committee Chairperson and Independent Director, Mr. Graeme Rein, our Audit Committee and Compensation Committee member and Independent Director, Mr. Wesley Pollard; our Compensation Committee Chairperson and Independent Director, Mr. Joseph Staples, our Chief Financial Officer, Mr. Steve Knerr, Mr. Heath Glidewell of Cherry Bekaert, our independent accountants; and Mr. Jeff Quick, our Corporate Legal Counsel, are in attendance as well.

Also, as I mentioned previously, Daragh Hewitt is acting as our Inspector of Elections for today's meeting. Mr. Quick will act as the Secretary for today's meeting. The Chair recognizes Mr. Quick.

Thank you, Brian. The inspector of elections has been appointed to receive and count votes and to report on the results of the meeting. The inspector has prepared a preliminary report of proxies delivered to the company as of June 25, 2026, and has delivered that report to the Chairperson. Proxies were received in response to a notice of meeting which was mailed on or about April 30, 2026, to all stockholders of record as of the close of business on April 30, 2026.

The preliminary report of the Inspector of Elections indicates that 1/3 of the issued and outstanding shares of the company are represented at this meeting as required by the company's second amended and related bylaws. I therefore declare that a quorum is present and that this meeting is duly and properly convened. I'll now return the meeting to Brian.

Thank you, Jeff. We will now vote on each of the proposals scheduled to come before today's meeting. The first action item is the election of directors to serve until our next annual meeting of shareholders. The following are the nominees to the Board of Directors: Brian Balbirnie, Wesley Pollard, Graeme Rein, Joseph Staples. We will proceed to the next item. .

The second and final item to be voted on today is the proposal to ratify the appointment of the Audit Committee of the Board of Directors of Cherry Bekaert LLP as our independent registered public accounting firm for the year ended December 31, 2026.

The Audit Committee has appointed the firm of Cherry Bekaert, independent registered public accounting firm to audit and report on our financial statements for the years ended December 31, 2026. We have engaged Cherry Bekaert as our independent registered public accounting firm since June of 2010. The Board of Directors recommends the approval of Cherry Bekaert as the company's independent accountants. A motion to ratify such appointment would now be in order.

I hereby move for ratification of the appointment of Cherry Bekaert LLP as the independent registered public accountants of the company for the fiscal year ending December 31, 2026.

I second the motion.

At this time, if there are any stockholders in attendance who have not yet voted and wish to do so, please click the button voted -- labeled Vote my Shares. We will pause for a moment to allow any and all stockholders this opportunity. .

[Voting]

We can now hear from the company's Inspector of Elections for this Annual Meeting of Stockholders who will read the preliminary report of the inspector of elections as to each of the matters of which action was taken. The preliminary report reflects only those votes cast by proxies that were received by the company prior to June 26, 2026, and any votes cast today will appear in the final report of inspector and in the permanent records of the company. .

Daragh Hewitt, please, sir, would you present the report?

Thank you. I will read the voting results. For the election of Graeme Rein, there are 1,976,515 shares voted for, that is 87.29%. There are 287,742 shares voted withheld, that is 12.7%. For the election of Wesley Pollard, there are 1,987,945 shares voted for, which is 87.79%. The withheld votes are 276,312 which is 12.2%. For the election of Joseph Staples, there are 1,987,945 shares voted for, which is 87.79% and there are 276,312 shares voted withheld, which is 12.2%.

So the election of Brian Balbirnie, there are 1,859,945 shares voted for, which is 82.14% and the withheld votes are 404,000,311 shares, which is 17.5%.

For proposal 2, to ratify the appointment of the accounting firm, there are 2,653,094 shares voted for, which is 89.53% and there are 309,949 shares voted against, which is 10.46%. And there are 21 shares abstained from voting, which is less than 1%. That concludes the preliminary report on votes.

Thank you, Daragh. We have now reached the general question-and-answer portion of the meeting. [Operator Instructions] We will pause just for another moment to wait to see if there's any questions.

There being no other questions, our final order of business is to adjourn the meeting formally. A motion to adjourn would be in order.

I hereby move that the meeting be adjourned.

I second the motion.

It has been moved and seconded that this meeting be range. Is there any objection to adjourning the meeting at this time?

The motion is carried, and the meeting is adjourned. Thank you all for your attendance today.

Thank you. This concludes today's conference, and you may disconnect at this time. Thank you for your participation.

Good day, and welcome to the iAccess Alpha Virtual Best Ideas Summer Investment Conference 2026. Our next presenting company is ACCESS Newswire Inc. [Operator Instructions]

I'd now like to turn the floor over to today's host, Brian Balbirnie, CEO at ACCESS Newswire Inc. Please go ahead.

Good afternoon, everybody. Thank you, Paul. I appreciate yourself, [ Alan ] and the rest of the group from iAccess Alpha allowing me to be one of the closing out companies presenting today. Virtual rooms are full, and everybody seem to have a great day of it.

So with that said, for folks that don't know who I am and who ACCESS Newswire is, my name is, as Paul said, Brian Balbirnie, I'm the CEO of the company. NYSE American-traded ACCS is the symbol, ACCESS Newswire is the name. We are the third, fourth largest, give or take, everyday changes, volume distribution news outlet in North America. We are the fastest-growing newswire still to this day. We benefit from having thousands and tens of thousands of customers that use our platform every single quarter to tell their story, both public and private.

This presentation isn't much different than what I used in the last presentations and shows. So I may be a little iterative to somebody and repetitive, rather. But folks who don't know the story, I hope I get a chance to talk to you tomorrow and do some follow-up.

A little bit of a back story, right, about us. ACCESS Newswire actually was a company started in 2006 called Issuer Direct Corporation. We began our market entrance as an NYSE-listed company in 2010, launched our news business mid-teens in the 2000s at 2017, did some acquisitions along the way and then disposed of our Compliance asset and rebranded our company in early 2025.

And before I go further into the presentation today, I'll maybe just pause and digest a little bit about what that rebrand and divestiture was. We had a 15-year-old, I don't know, 17-year-old Compliance business that was a stock transfer company, an EDGARization company, annual meeting management company.

And because the IPO markets are what they were, we firmly believed that the growth opportunity for what an addressable market would be to warrant being the size of a company that we aspire to be wouldn't be in the public company reporting business. It would more or less be in the investor relations and public relations space. And so that's what ACCESS Newswire took on is a whole new life of being the IR/PR platform subscription company of choice.

Today, PR distribution is worth about $2.5 billion globally. We compete fairly in that market. We're still very small at 20 -- kind of $23 million annual revenue and growing now in the back half of this year. But we really look at this as a content distribution and repurposing market. And that really opens our TAM up to $9-plus billion globally.

And I want to tell you how we're going to get there because a lot of folks are going to say, wait a minute, you got press releases or one thing. Where you're going is different, but it's not. And I'll explain to you the reasons why it's not.

We are very, very focused on using artificial intelligence and LLMs and MCPs inside of our network to be more productive for our customers, to help our customers do and tell their stories faster with more insights. We're not about a company wanting to change us to be an AI business. We are a human capital company. Stories come to life by humans. They're told passionately by us, executives alike. Regardless if you're a solepreneur or a multibillion-dollar company, we do business with everybody.

But that repurposing business is how do I take my story from a press release and bring it to life in social media, bring it to life on my newsroom and a blog and a case study, a white paper, a podcast or a presentation. And we're building tools and technologies around all of that to be able to help our customers tell their stories at the right times along with the press release. And so that very digital-first approach is going to continue to expand our subscription business and help us drive into this repurposing market that we talk so much about.

How do we generate revenues, what we do. ACCESS PR, ACCESS IR are 2 subscription platforms that we sell today to well over 1,000 customers that subscribe on an annual basis to distribute press releases, target media, fetch the media, optimize their storytelling processes, put their news on their website and monitor their brands, including social.

And then ACCESS IR is not too dissimilar from what a PR company would also need. There's an IR side of the business that it would include both your quarterly earnings calls, your investor relations website and those press releases that we talked about just previously. Customers that are public do buy both of these, and this is where we see a big opportunity for us in our ARR expansion that we'll talk about in a few minutes.

But before I do, I want to talk about 2 -- a couple of things that we've done recently this quarter that are not reflected in Q1 revenue that you've seen. You'll start to see that print in Q2 revenue and going forward and building momentum as we talk about guided numbers.

The first was we upgraded our ACCESS PR platform to include our social monitoring tools. Those social monitoring tools added about $2,400 annually to a subscriber. And not all of our thousands of customers subscribed selected social monitoring, but a good portion did. So we are going to see a good uplift in ARR revenue as a result of that.

The second was just launched in the last couple of weeks. It's our Insight and Analytics Report. And this is a report that we've talked about publicly for quite some time, but more specifically the last couple of weeks of what we said in our prepared remarks of #KilltheReport.

The distribution report of the press release industry hasn't changed in 80 years. PR Newswire was super intelligent and smart when they did it 80 years ago, but nobody has evolved it ever since. They may have changed logos and colors and maybe put a more interactive map, but at the end of the day, all they really were telling you is how much traffic did you get to your press release and what was the potential audience of that press release and where is the engagement.

And what we've decided to do is really look at the underlying story and the sentiment of what's driving interest in that article. So we now tell you what citations are available to you, meaning what LLMs pick you up, what's the readability, what's the tonality and how is it being perceived in the industry that you compete with. And that you've got your peers that you're looking at. We're now benchmarking you over 12 different ways and then giving you suggestions on how to improve and then obviously find better outcomes for your press release.

Of course, we'll still tell you who clicked on it and where they clicked from and all the traditional things, but we're really bringing to life some very powerful MCP LLMs that we've built internally to get our customers understanding the benefits of what proper insight analytics will be. And the economic side, for all of us as shareholders and the benefactors of that, we upcharge our customers for that as well, both in a pay-as-you-go and a subscription way. So 2 important revenue drivers.

But how do we generate revenues from those products I just talked about? The ACCESS PR product averages between $10,000 and $12,000 a year per customer. The ACCESS IR suite is about $12,000 to $15,000. And then as I mentioned, customers can buy both, typically spend about $20,000 to $25,000 to do that. We talked about subscription upgrades, and that's the $2,500 to $4,000. We believe since the beginning of Q1 -- or the end of Q1 this year, all the way into the 12 months forward, we're going to have $2,000 to $4,000 worth of upgrade options given to our customers to select that they'd like.

That left-hand side of your screen is our subscription revenue business. It accounts for 60% of our overall revenues today. That annual commitment, that recurring nature business is very important to us. We've guided that ARR numbers will increase. We'll talk about that in a second, and the number of subscribers will increase.

But that top of funnel is extremely important to us. And that is on your right-hand side of the screen. And the top of funnel comes from customers that may not be ready to buy a subscription or utilize more of the platform. They come in and buy a single press release. They buy a single event, or they may buy access to something for a very short period of time.

That top of funnel is driven by all of our brands. Most of you know ACCESS Newswire, which we're very appreciative of. But we do operate 2 of the most widely trafficked websites in the news world, newswire.com and pressrelease.com. Those 2 domain properties bring us 10 to 15 to 20 new accounts every single day.

Customers buying a press release, again, top of funnel, where our sales and marketing engines go to work and mature these customers into larger spenders on a pay-as-you-go bundle basis or into a subscription basis. So you're going to see us talk a lot about top of funnel in the coming quarters, about where our customers are coming from and how we drive it. Our top-of-funnel approaches, I think it's important to point out, also come from the London Stock Exchange, New York Stock Exchange, OTC Markets, where everyday customers are coming in subscribing to our platform via those direct connections and partnerships as well.

As we move along, we talked about subscribers. We'll get right into the details. If you look over the last couple of years, we've moved subscription numbers from under 1,000 to now 1,100-plus and likely into the 1,200-plus here in this quarter.

ARR numbers have been very, very impressive for us. We're proud of what we've been able to do, both from walking up current customers to rightsize contracts to selling new customers at higher ARR values and adding more to the value proposition to the customer. So we've gone from about $8,000 all the way up to $12,800 at the end of Q1 for ARR, average revenue per customer. And we believe that number will guide very close to the $15,000 number by the end of this year.

So we see net subscriber growth year-over-year continuing to happen, the net effect over the 2-year period of 38% increase in ARR spend for these customers. This is a beautiful business when it comes to building tech, building infrastructure, the right human capital, amazing team that we've got and infrastructure for this business to really grow and flourish. As many of you probably don't know, this is a highly fixed cost business. And so as we believe -- as we begin to see revenue coming in at a higher clip, meaning next year getting into the teen-digit growth, a lot of this falls right to the bottom line in this business as we continue to push ARR numbers.

The premium tier launch is something I want to talk about. This is how we drive value to our customer. And so a lot of times, people will ask specifically in IR conferences that I go to, "Can you not just raise prices? You're not -- you're cheaper than everybody, just raise your price." And although from a pure basic business principle, one could argue you could do that.

But for our proposition to the customer is we want to build value to you. We want to continue to give you things that you can't get elsewhere, like our access and insights report, like some of our social monitoring integrations that we're doing with Hootsuite, is to build further, that competitive moat. So every single product that we launched this year and into next year is going to give us the ability to have this moat around our platform that no provider like GlobeNewswire or Business Wire or PR Newswire is going to be able to have. That will drive our cross-selling ability to give our multiproduct approach to each one of our customers and will also give us an AI-first focus on giving the customer the AI tools that they need.

And as I said earlier, it's all about being an AI company. We have used AI significantly in our platform for the last 2 years to make the editorial processes run more efficiently, to pre-process articles quickly, to give the editors more human time to talk to the customer and really help them with their press release.

And then lastly, we built a marketplace, and we launched it in the last couple of months to give our partners and customers the ability to bring their offerings to the table to our 13,000-plus customers, and hopefully, to bring our offerings to their customers. And that is something I've talked a lot about, about a white space opportunity and where we're headed as a business in the next couple of quarters.

Where we're headed -- I think I've talked a little bit about this, but I'll go through it a little bit now -- continue the new subscription tiers. We're going to release sub subscriptions here in the next couple of days. It's being worked on in marketing and development today, where customers will be able to buy 1 or 2 of the components of our platform to get started quickly and easier rather than buying the entire platform.

And I talked about this on our last quarterly call that if our ARR numbers begin to drop and our customer count numbers begin to cycle much higher, it's because we've made the decision of customer feedback to go to a lower tier subscriber plan. But we'll fully detail that in our quarterly numbers so everybody understands what our core subscription business is still doing because we believe we're going to guide to that number, but where a subset can go to that can drive some volume into the business. And that ultimately is what we all want is to see that top line number continue to grow.

That continued subscriber growth is going to happen both on the IR and PR side. I've talked a lot about all the products we've released and rebuilt for public relations, but we're also doing it now for investor relations. And so there's 2 new products coming to market at the end of this quarter, early into next quarter that will drive ARR for those customers on the investor relations side and ultimately get us down the hall to larger enterprise customers that we are working with and we hope to work with more.

And that will move our TAM expansion as we have an opportunity now to be selling content repurposing. We're doing it in some basic cases for a few accounts today. We're releasing our what we call Amplify internal system to an MVP group of customers as beta testers to help us get customer feedback loops moving to make that product even better. And we're super excited about some of the initial feedback that we've got.

All of those things in combination give us that margin expansion opportunity. It really does provide leverage for the business. And although we operate a beautiful company today -- we've got a clean balance sheet. We've got 1 class of equity common stock only available out there today. We have less than 4 million shares issued and outstanding.

We really don't have any debt. We're net cash positive. The business generates cash every quarter. We've got a great gross margin profile in the mid-70s, probably 5 to 8 points higher than anyone else in our industry. Last quarter, we had 11% adjusted EBITDA.

There's a lot of really good things happening inside of this business. But like I've said publicly, we clearly know what we need to do. There's -- one most important indicator is top line growth. This business is built for that now. And when that comes back and the industry comes back to start to growth mode again, we're going to start to see that leverage both in our top and bottom line margin and EBITDA margin expansions.

A little bit about industry, right? We want to look at this as there are probably 12 pillars of our values, but we want to narrow this down for today, because time is limited, to look at the fact that although we compete with these folks, we're the only publicly traded newswire available. There used to be others that were, and it was easy to gain information and understand, but now we're the target for everybody to get information on us.

We're the first newswire to have a subscription-first kind of go-to-market. PR Newswire and Cision is mixed as it related to both of those companies. Business Wire is a solely focused transaction engine. They sell press releases, that's all they do. They do nothing else. To be fair to them, they do a really good job at it. And -- but that's all they do. And then GlobeNewswire Notified, somebody may call them Bullish or EQ. They got multiple names. They're going through a lot of transition as well, but they're a very mixed business.

We're one of the only ones that have the most advanced insights and analytics report. We're #2 by LLM citations that's not on this list. PR Newswire is #1, and we're second already. And we talked about earlier, our gross margin profile is much higher than our industry average and our peers and still generating good adjusted EBITDA margins that we believe can get into the high teens and 20s next year.

This chart is a little bit outdated, but not materially outdated for it to be a different discussion today. When we look at our business, we tend to kind of think about peer values. And then we look at the business and reflect about what we believe our value to be. And then ultimately, we're judged on what the marketplace values the business at.

And when we look at this, we want to look at it against an EV to revenue multiple to gross profit to adjusted EBITDA multiples. And as you can see from the highlighted area of what our current values are, this data was based on, say, a $7 share price, so slightly off from what today is. We're still traded at an extremely low multiple to what our peers have gotten in the IR/PR space.

These are transactions done. This is not hypothesis. This is what were the businesses valued at and what were they acquired at in a take private and/or an acquisition. And we'll leave [ SaaS mediums ] alone, right? Because to be fair, it's just -- it's off the radar in my mind, but I wanted to make sure that it was here.

And we really look at this and say this business is entirely not valued correctly. And that's evident because 2 -- 3 of our Board members are buying back securities every single week. I bought back more today, a Form 4 will be filed tomorrow morning. The business is buying it back. We have an open market repurchase program to spend up to $1 million to buy shares back.

We clearly see the value in what we're doing. We clearly understand where the business is going. And I hope that we are being able to tell a story in an articulated way that also shows the value to our shareholders and potential shareholders that could decide to take a position in the company.

So in quick summary, single-digit growth, back half of this year, 5% to 7% growth projected for the business, double-digit growth in next year, gross margin sitting around mid-70s today, will improve again into next year to get to high 70% gross margin. Adjusted EBITDA margins last quarter were 11%. We'll likely guide into that for the remaining part of the year in the high teens, into 20% next year. Customer count numbers at 13,000, subscribers at 1,200, guiding to 15,000. And ARR going to $15,000 from about $13,000 today.

All the right things are happening, top of funnel, customers are most important as we continue to grow and execute this business. We believe we have all the capital we need. We don't need to raise money. We're not in a position to be servicing some bad instruments in the past. We've really set the business up for success. It's hard to do everything in 22 minutes to tell everybody about who ACCESS Newswire is, how we generate revenues, how we view the business and how we guide the business and what we're excited about.

I'm sure we're going to flip into a bunch of questions, and so I'm going to jump over to the Q&A section. I see a bunch of questions. So if I don't get a chance to answer all of them, I will try to follow up with the folks at IAccess Alpha and have an opportunity to speak with you from there.

The first question is, what are the key factors that give you confidence ACCESS can return to sustainable revenue growth in the second half of this year? That's a great question. And I would answer it in 3 components.

The first component is product expansion for us. We are delivering product that is new to the market that our customers are asking for, not what we're wanting to do it. We're spending a lot of time with our product and development teams and our marketing teams to understand what the customer wants and exactly how they're willing to consume, use and pay for it, and that's what we're delivering. And so that's a big indicator. That's an attribution of why we've seen ARR numbers move like they have over the last several quarters, and we believe we're going to continue to see that happen.

The second is there is a prevailing thought -- and I don't want to be the educator of AI -- but there is a prevailing thought that more frequently used distributed press releases are then indexed at a higher rate for LLMs, listicles and citations alike. So we're advocating to our customers as well as the industry that, that needs to occur at a faster pace, meaning tell more to the markets about what you're doing. And we're starting to see early indicators that, that is going to become an executable educational process, meaning it's being educated today. That will benefit the market later. And not just us for revenue, but our customers from being mentioned. And that is important, and we've got a lot of marketing efforts to talk to folks about that.

And then the third really is moving down the hall a little bit to what we've talked about earlier in the presentation, that we want to get to the other side of the content repurposing market rather than the storytelling distribution market. And it's not that we're going to waiver from our strategy of who we are. We just know that partnerships and things that we're doing with companies like Hootsuite are going to get us there, and we see a clear insight to where that is going to lead our customer and what they're willing to spend.

The second question is, customer retention improved to approximately 92% and management had discussed a goal of 98%. That's a great point. I did that in the last presentation I did. What specific initiatives have been the greatest impact on retention was the back half of the question.

This is -- I love this honesty question-and-answer session, right, because this is always me giving the reality. We did a good job selling subscriptions at the beginning. We did a bad job of maintaining customers. We didn't understand the level of commitment we needed to be onboarding, training and building out a customer experience team as well as we have today.

So we took our licks. We were down into the low -- we were actually 88% at one point. That improved to 92%, and we're likely guiding into the numbers of 98% today. That is as a direct result of what our product teams and our CX teams are doing with our sales teams and our customers. We now tandem approach every single account with their account manager and a CX professional to train them to them and follow up with them often to help them build targeting and pitching, to help them understand how to monitor media and social.

We're doing that better today than we ever have. To get there, we're learning. And we've done a really good job of that. And I think it's a good metric for you all to be looking at from our business perspective every quarter.

But I think another metric that you want to also focus on is net dollar retention. And today, the net dollar retention may be sitting at 100%, 101%. We want that number going to 105% and 110%. That's a strong indicator that we're continuing to sell our customers more of the new products and raising their spends as we continue to retain them. So yes, I'm happy with what my team has done. I'm happy with what some of the outputs have been and improvements and believe we can continue to get better there.

Gross margins have historically been strong, and management has discussed the path back to the high 70s, 80s range. What are the primary drivers behind future margin expansion?

Another good question. Q1, we had 74% gross margin. Q4, I believe it was 77% gross margin. And if you go back through the prior several quarters, we typically sit the 72% to 77% range. And so there are some leverage quarters that are still a little seasonal for our business. Typically, we see Q1 as a little compressed.

I will tell you, as part of our optimization operation efforts, we have done a really good job of minimizing fixed costs in the cost of goods scenarios, right, distribution costs, editorial costs, trying to maintain and hold those steady. So as volume continues to grow again, we're going to see that improvement there.

There is some loss of direct vendor costs that we've been able to eliminate beginning Q3 and going forward that we know will also increase gross margin a couple of percent. So we're doing all the right things above and below the line to manage the business, but nothing more important than just focusing in on growth. So we're confident we're going to see those gross margins continue to improve.

Another question is, you continue to actively repurchase shares despite maintaining a strong balance sheet. How are you thinking about capital allocation priorities over the next several years?

We've said this publicly, we're going to continue to do this. We have a very aligned management and Board with conviction about the business. Our capital allocation strategy is very simple. We're not going to pay dividends. We believe in buying our own stock back, and we'll continue to do that.

We believe in investing in the business. We can't starve it. Like we said earlier, we have a strong balance sheet. Like we said earlier, we don't need to raise capital to execute the business, but we should be investing in the business. And we spent 1.5 years rebranding the company, building out new tech. We had some CapEx expense. We had some capitalization costs, and we've rightsized all of that now where our R&D team is our R&D team, and we don't believe there's anything further there.

But our sales and marketing team needs to expand. So at the end of Q1, we hired more sales and marketing folks. We're going to continue to do that. This quarter, we'll hire more in the next couple of weeks to start next quarter. Those folks will come in. We train them, we love them. We make them effective, they pay for themselves, we hire more people. The more people we have out there telling our story, the better we'll do as a business, and we'll need to continue to do those. And so I want to invest in the business because I've got conviction that the opportunity for us to grow is absolutely there. We just need more people to be shouting from the tops of every treetop in order to tell the world who we are.

Next question -- and we're running out of time here, but I'll try to sneak through a couple more. For investors new to the story, what do you believe is the most misunderstood and underappreciated thing about ACCESS Newswire today?

I'm going to answer this question a little differently than I think maybe most would if they were given this question about their business. I think the biggest thing that's misunderstood is our volume to revenue ratio. When we entered the news market basically 10 years ago, we came in as a extreme low-price provider. So when we talk about having being the third or fourth largest news distribution outlet, it does not correlate to revenue.

And so I think sometimes people look at our revenue and say, well, if they're as big as Business Wire in revenue and volume, then this industry really isn't very big. So maybe it's not an opportunity for us to invest in because it's just -- the opportunity is not there for us.

And that couldn't be any more wrong, right? Business Wire themselves probably generated about $100 million, $150 million in top line press release revenue. GlobeNewswire is probably double that. PR Newswire is probably triple that. The industry is there. That's just press releases, folks. That's not media monitoring database, analytics, pitching, IR websites, investor relations quarterly calls and social monitoring.

There's a lot that we do here, and I think that's the biggest misunderstood part of our business is the volume of our industry and what we tell everybody is not correlated to our revenue. It's the complete opposite, actually. And once folks start to understand that, they see the opportunity for growth.

Last question with a minute or so to go. The company has highlighted growth opportunities within investor relations websites, newsrooms and broader communication solutions. Which products are seeing the strongest customer demand today?

Good and bad, the reality is our public relations products are where people are finding the value and we're selling the most. Our IR practice business, public companies themselves is sub-1,000 right, that we work with that buy subscriptions that are related to IR. We have 13,000 customers. Those customers are buying our public relations products. And so we see that as our biggest continued opportunity. There are more private companies in the world than there are public companies.

But I will tell you that the IR practice business for us is near and dear to our heart. We've got some really, really innovative add-ons coming that will drive ARR, drive stickiness and help us continue to move upmarket to continue to get the big brands like Delta and UPS and Moderna and BlackBerry. There's thousands of really good customers here.

I'm glad I got through most of the questions. I'm glad we had a packed virtual audience, and I couldn't be happier than the order to talk to you about ACCESS Newswire. Thank you so much for today.

Thank you. That concludes ACCESS Newswire Inc.'s presentation. Thank you very much for attending today's presentations. On behalf of all of us at iAccess Alpha, we would like to thank all of the presenting companies, investors and partners who help make these events possible. We truly appreciate the contributions from all of you, as these events would not be as valuable without your participation.

We look forward to your attendance at our future events, including the iAccess Alpha Virtual Best Ideas Fall Investment Conference taking place September 15 and 16, 2026. For more information, presentation replays and updates on future conferences, please visit www.iaccessalpha.com. Thank you again for joining us. We appreciate your participation.

Welcome to ACCESS Newswire's First Quarter 2026 Earnings Conference Call. My name is Laila Kalantari, and I am a Product Manager here at ACCESS Newswire. I have been with the company since 2022, initially from the newswire.com business, where I was a part of the PR Optimizer team, helping customers craft and amplify their stories. Now I'm a part of the product team where I help ideate and shape some of the most exciting tools at the core of our industry's need.

I also have been involved with our amazing EDU program, training professors and bringing our product to over 100 universities and thousands of students. My time here at ACCESS has flown by, and I could not be more excited about what's in store for our customers, our company and myself as we all continue to get better every day.

Before we begin, I'd like to remind everyone that statements made in this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships and any other statements that may be construed as predictions of future performance or events are forward-looking statements.

These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such statements. We will also discuss certain non-GAAP financial measures, which are provided for informational purposes and should be considered in addition to, not as a substitute for GAAP results.

With that, I'll turn the call over to our Founder and Chief Executive Officer, Brian Balbirnie; and our Chief Financial Officer, Steve Knerr. Brian?

Thank you, Laila, and good morning, everyone, and thank you for joining us to discuss Q1 2026 results. It has been a pleasure to see you grow here at ACCESS, Laila. I could not be more grateful for your customer-first passion. You are a big part of our product and CX teams, and I'm sure I'm speaking for the rest of the company when I say thank you so much.

With that, let me be direct with you from the onset. Q1 revenues came in at $5.3 million, down $472,000 sequentially from Q4 of last year and down $149,000 year-over-year. That is not where we want to be, and I want to acknowledge that plainly. Top line growth is the mandate for 2026, and Q1 tells us we have to continue to push harder on new customer acquisition and volume.

We are not satisfied with that number, and I will outline specifically what we are going to do about it. That said, there are several signals from Q1 that do give us a good amount of confidence in our business. First, our customer retention. This is a number I am generally proud of. We moved from retention rates in the high 80s in 2025 to 92% in Q1 of 2026. This is a fundamental shift in the health of our subscription business.

Retention at this level tells us that customers are finding value in our platform and that our customer experience investments are working and that the product we launched are resonating with our customers. Churn was the story we talked about as risks in our Q4 call, and that is no longer the dominant story. The move to quarterly and annual billing, the rebuild of our customer success teams are paying off.

92% retention is a result that we can build upon. Thank you both to our sales and CX teams for some great work since last year. Let's continue to learn, grow and get better here. I am confident that we can reach our retention goals by year-end. To be clear, that is greater than 95%. Second, ARR per subscriber has now increased for 7 of the last 8 quarters. This quarter, we continued that trend, reflecting the ongoing success of our trade-up and trade-in activities and early monetization of our new product tiers.

Customers are now beginning to upgrade to our ACCESS PR that includes Social Monitoring, ACCESS Verified. And soon this current quarter will be our new dynamic Agent MCP analytics that we have previously called Kill the Report. Just in Social Modeling alone, we have seen a 20% ARR lift in subscribing customers. We see that pattern continuing as we move all of our PR subscriptions to higher tiers to include these amazing new product advancements.

I will talk more about that later after Steve's prepared remarks. Third, and before I hand it to Steve, I want to be transparent about the cost posture heading into the back half of the year. We are watching the macro environment carefully. These are headwinds in the broader industry, and we want to make sure that we are prepared. We're actively reviewing our SG&A structure to identify further efficiencies.

Operating expenses in Q1 came in at $4.7 million, down $580,000 or 11% from the prior quarter and down $281,000 or 6% year-over-year. This is meaningful progress. We intend to hold this discipline and find additional levers if the environment warrants it. We can manage costs without cutting into product innovation that is driving our platform differentiation and growth in our sales teams.

The subscription story, however, continues to move in the right direction. Subscription revenues as a percentage of total revenue grew again this quarter, reaching approximately 60%. That shift is one of the most important structural changes happening in our business, and it is happening because our platform is earning that reoccurring commitment from our customers.

Steve, over to you, sir.

Thank you, Brian, and good morning, everyone. I will take you through the Q1 2026 financial results in detail. Total revenue for the first quarter of 2026 was $5.3 million, a decrease of $472,000 or 8% compared to Q4 2025 and a decrease of $149,000 or 3% compared to Q1 2025. We will address the revenue dynamic directly. Q1 carries inherent seasonality given the post year-end timing and press release volumes tend to be lower in Q1 relative to Q4.

That said, we know we need to improve on the top line and are executing accordingly. Core press release revenue for Q1 2026 was approximately $4.4 million, down from $4.8 million in Q4 2025. However, consistent with normal seasonal volume patterns and consistent with Q1 2025. As part of this, our PR Platform and Media Suite revenue increased $200,000, up 23% sequentially and year-over-year.

That growth reflects the early monetization of our new subscription tiers and the strength of platform adoption. Revenue from our PRO plan was flat compared to Q4 2025, however, decreased $126,000 or 46% from Q1 2025. Gross margin for Q1 2026 was 74% compared to 77% in Q4 2025 and 78% in Q1 2025.

The sequential decrease in gross margin percentage reflects the lower revenue base and a modest increase in cost of revenue due primarily to increased distribution costs. We believe gross margin will recover as volume and subscription revenue grow. The long-term trajectory of this metric remains upward and the structural advantages of our fixed cost distribution and AI-assisted editorial operations are intact.

Moving to operating expenses. Total operating costs were $4.7 million in Q1 2026, down $580,000 or 11% from Q4 2025 and down $281,000 or 6% year-over-year. This reflects disciplined cost management across the organization. General and administrative expenses were $1.8 million in Q1, down $181,000 from Q4 2025 and down $172,000 year-over-year.

Product development expenses came in at $560,000, down $60,000 sequentially and $173,000 compared to the same quarter of the prior year due to higher capitalized costs and lower contractor expenses. During Q1 2026, we capitalized $99,000 compared to $61,000 during Q4 of 2025 and $23,000 during Q1 of 2025.

Sales and marketing expenses were $1.68 million, essentially flat sequentially and up modestly year-over-year as we invested in the pressrelease.com brand and continued trade show activity. Operating loss for Q1 2026 was $718,000, a slight improvement from Q4 2025 and a shade lower than Q1 2025.

On a GAAP basis, net loss from continuing operations was $611,000 in Q1 2026 compared to $509,000 in Q4 2025 and $765,000 in Q1 of 2025. The improvement reflects both cost discipline and reduced interest expense relative to the prior year. On a non-GAAP basis, EBITDA for Q1 of 2026 and Q1 of 2025 was relatively flat compared to $251,000 or 4% of revenue in Q4 of 2025.

Adjusted EBITDA for Q1 of 2026 and Q1 of 2025 was $564,000 or 11% and 10% of revenue, respectively, compared to $881,000 or 15% of revenue in Q4 of 2025. The sequential decline in adjusted EBITDA is primarily a function of lower revenue in the quarter. We ended the quarter with a solid cash position and continue to generate adjusted free cash flow.

Cash flow from operations increased to $871,000 for Q1 of 2025 compared to $258,000 in Q4 of 2025 and $747,000 in Q1 of 2025. Our deferred revenue balance remains healthy, reflecting the forward committed nature of our subscription business. Looking at our SG&A posture, as Brian mentioned, we are actively evaluating further efficiencies.

We have demonstrated the ability to reduce costs without compromising the product road map. With potential industry headwinds on the horizon, we want to be positioned to act quickly if needed. The operational discipline we have built over the past 18 months gives us the flexibility to do that.

I will now turn it back over to Brian.

Thanks, Steve. Let me take a few minutes to give you the operating picture of what we are focused on for the rest of the year. As I said earlier, revenue growth is the priority, and I want to be specific about the levers that we are pulling. First, the new product suites we brought to market at the end of Q4 and into Q1 is now in full commercialization mode.

Social Monitoring has been enabled as both a subscription upgrade and as part of our new ACCESS PR subscription plans. This is generating incremental ARR. The $200 per month lift per upgrading subscriber that we discussed last quarter is real. As of Q2, it has begun, and we are seeing that 20% ARR lift, as I mentioned earlier in the opening remarks.

The benefit is across the initially introduced ACCESS PR customers, of which 60% opted to take advantage of this benefit, generating an implied $550,000 in ARR that we expect to see over the next 12 months. Second, ACCESS Verified, our AI-powered editorial assistant is now customer-facing and receiving strong early feedback.

Early customers have reported meaningful time savings and improved confidence in their content prior to distribution. This is not just a feature. It is a competitive differentiator that not any other wire service can match in this depth. We have several upgrades iterations of this product scheduled for the year, and we expect to be a meaningful add-on driver to our plans. We envision both this and the next topic here coming up coming together closely as a single offering over the next 12 months.

And that is our dynamic Model Context Protocol, which we say MCP for short as an industry term. It is our in-depth analytics report that I have coined for the last 2 quarters that killed the report, our very own AI-assisted content performance and analytics engine, which is live for customers right now. We made good on this commitment.

The feedback from our initial customers over the last couple of weeks who were granted an MVP at no cost to take a peek and experience the difference between our transparent real-time intelligence reporting and the legacy opaque distribution reports has been exactly what we expected. This is a market-differentiating product, and we expect it to drive both retention and upsell.

There will be incremental revenue from this product for our entire customer base, where customers can elect to buy up to have this analytics engine on a per release basis or a subscription basis.

We are confident like our Social Monitoring solution, this new AI assistant content performance and analytics engine will deliver immediate revenue here in Q2 and help drive both ARR to our guided goals as well as provide our customers something that they just can't replace anywhere else.

I explained this to our customers the other day. It's the report that you thought you should have gotten for decades in this business, and we're the first to bring it to you. Also, as we grow our customer base, we want to be thoughtful about tools and technologies we might never build that we feel partners can do a better job for our customers.

This is really an expansion of our trusted relationships we have had on the public side for over a decade. Exchanges like New York Stock Exchange, OTC Markets and London Stock Exchange have been a part of our platform. Now we're just going after brands that have additional trusted platforms in both public and private companies.

This marketplace that we talked about last quarter is fully operational, and Hootsuite is leading the way as our first integration partner and additional partnerships coming in the pipeline. The ability to schedule, publish and analyze social content within the same platform used to distribute press releases is something our enterprise customers have been asking for.

We expect this integration to contribute to new enterprise acquisitions in the second half of the year. We are also continuing to work with Hootsuite on cross-selling opportunities to better arm each other's customers with the best-of-breed products. Moving along to subscribers. We continue to focus on quality of subscriptions over raw count, but we did sell more this quarter, coming in at 110 new customers in Q1, and we saw the retention improvement I highlighted earlier.

Our pipeline for our ACCESS EDU program is beginning to convert with schools and their associated PR agencies entering paid subscriptions. The EDU investment is long-term growth channels for us, and we're beginning to see early revenue signals. In Q1, ARR increased 15% year-over-year from 11,139 to 12,803. We also ended the quarter up in total subscriptions, ending the period at 1,119 subscribers, up 17% from 955.

Sequentially, ARR increased 2% and our subscribers increased 10%. The combination of these results have helped us manage our customer acquisition costs and improve them over last year, something we continue to believe we can improve as our brands gain more traction in the markets.

Our subscription business retention rate continues to improve in the numbers of new customers coming in and continues to grow, obviously translating into higher EBITDA margins, sustained growth and improved gross margins. The latter we need to improve, but volumes are key to the majority of our PR business as a fixed cost. We do track our customer acquisition costs by subscriber and nonsubscriber.

For the quarter ended March, customer acquisition cost for a subscriber was $5,292 and a nonsubscriber was $2,279. We are seeing much lower customer acquisition costs in our pressrelease.com business, but it's too new for us to have a baseline yet to discuss, but plan to do that by year's end.

The remaining part of 2026 and into 2027, we have a significant amount of new innovation advancements coming to our subscription business. One most notably is a full amplification of a story and how and where it can be told at the right time to the right audiences.

We have already tested a good bit of this in our Model Context Protocol platform and have gained significant excitement from industry experts. We are committed to what we have started this year and that to out-innovate our peers, deliver value to our customers beyond a press release and continually innovate where our customers ask.

In closing, yes, revenues were down slightly year-over-year. And yes, we experienced some macro industry volume fluctuations, but our customer counts continue to deliver. Our ARR increased and the number of subscribers grew and our technology is being delivered at a higher rate than ever before.

Lastly, for the quarter, we continue to repurchase our common shares and have a little more than half of our repurchase plan left, and we look forward to completing the plan and instituting further repurchases this year.

We are focused and our teams continue to work hard to improve our customer acquisition costs, retention and overall new customer activity as well as expand our core product features. And in combination, we will -- this will allow us to continue to generate cash flows from operations, increase our EBITDA margins and increase our overall market share.

I'm happy now to turn the call over to the operator for questions.

[Operator Instructions] And the first question today is coming from Luke Horton from Northland Securities.

Brian, just wanted to start off with the product development front. I guess what are you most excited about here in 2026 with the product suite, whether that be the ACCESS Verified, the MCP, Analytics Reporting and Social Monitoring. I guess, how would you rank excitement level amongst product development?

Yes, that's a good question, Luke. It's a tough one to answer, right, to be fair. I have to say from all of us as shareholders, I'd say Social Monitoring because it is already proven that we've gotten conversion to the trade-up to get customers to increase the spend and get value from that platform.

So to be fair, I think for all of us as shareholders, that is a very important metric. It's good to build products. It's great to put them to market fast and iterate them, but it is really rewarding for us to see that actually gain traction from a revenue contribution perspective that we'll see.

The other products, is something I'm not excited about though, ACCESS Verified is a good intelligence tool to help our customers and our editors create content and validate content quicker. And that is just a really good differentiator to the market. The reporting product, Kill the Report. I mean, look, we need to Kill the Report. This industry is old.

This industry is antiquated. This industry needs to change. And we've tried desperately to be the new incumbent to follow and be like them. And to be fair with them, we don't want to be like them anymore. So we expect that Kill the Report to also be as impactful as Social Monitoring as well this year.

So I'm very excited about that and not to elongate the response, Luke, but I'm really super-excited about where we're headed and what our product development and operations teams are already building for the latter part of this year. And that really is taking every one of the ecosystems that we interact with every day as well as our partners and folks down the hall.

And our shareholders know that we're very focused on Investor Relations and Public Relations. But the [ Corp Com ], the CMO's office has a significant amount more budget, not only budget for PR in general, a budget for marketing and communication tools. And so we're not wanting to be the answer for everything. We're never going to replace their HubSpots or Hootsuites or anything like that.

But there is an ecosystem of content curation and amplification that we have built that we're excited about taking that product to market. And that will really strengthen our ability to go upstream and go linear in all industries so that we can bring customers into our platform at a much higher rate, which would reduce our cost to acquire a customer and elongate that profitability long-term. So it's tough, but I think I led in as best order as I could, Luke.

Okay. No, yes, great. I appreciate that. And then I guess from a sales effort, how do you guys balance -- I mean, you added 180 new subscribers during the quarter, but also, I mean, the Social Monitoring platform, you had a 20% lift in ARR. I guess how do you balance trying to acquire net new customers versus cross-sell or upsell opportunities?

Yes. It's -- these guys and guys work hard, right? We may have what appears to be a high SG&A, more sales and marketing expense. But really, to answer your question, when the salesperson, a territory manager is -- he needs to get to every customer he's got along with marketing efforts to increase the spend and increase subscriptions and show them value in new product, they're also charged with going and getting new customers.

And they've got to be in events, right? We're doing a lot more events today than we ever have before. That's paying off in our pipeline, and we need to continue to do that. And so to really figure it out, when you look and analyze the numbers, there's just not enough touches. We need more people.

And so we hired more people in the prior quarter here to be able to help drive some outbound activity because I think I've said this for years, what matters most is customers, right? The more customers, everything takes care of itself. Volumes start to come at a higher rate.

It allows us to allow our really good sales and development people to build relationships to increase ARRs and/or just utilization in general. So it doesn't come without expense. They do wear a lot of hats. And the priority last quarter was for them to sell good quality subscription customers and get to customers about our new ARR add-ons. And they did that well. We just need to do everything else too.

Yes. No, it makes sense. And then lastly, just average ARR per subscription that continues to grow. I think you said 7 out of the last 8 quarters. Could you elaborate on how much of this is coming from price increases versus kind of upgrading to higher product tiers across the platform?

Yes. So in Q1, there was no pricing increases to our customers that were already subscribers. So to your point that generally folks in our industry have price increasing all the time, we did not increase subscription customer contracts. New subscription customers were at a higher add-on, right?

We did increase price and take price in some of those areas, but we didn't increase current subscribers. And now Q2, it's also done the same because of the Social Monitoring add-ons as well. We want value out of our platform for our customer, and we want that value proven.

It's to be fair, easier to take price and increase ARR with them when they've got value early on. And so it's very important to take our current subscribers and not push them too much on price at this point. We're proving value to those folks. And so new deals were higher.

As we've indicated, we're going to continue to message that, that we believe that long-term ARR will continue to grow. We're doing a really good job of that here in Q2 as well, and we don't see that changing in the foreseeable future.

[Operator Instructions] The next question is coming from Jacob Stephan from Lake Street Capital Markets.

I guess, first, I just wanted to touch on the revenue decline. I guess when we look at kind of PRO plan products, customer attrition there, webcasting, events, just seasonal weakness. I guess when in the quarter does it kind of start to shift in the other direction?

Yes. It's interesting. And it's -- devils are in the details, right? And it's tough in an earnings call situation to pull everything out and allow folks to digest it as fast as we're talking through some of the data. So when we look at our PRO plan customers, to be fair, we've seen revenues change dramatically over the last kind of 1.5 years there.

We're not losing the customers. A good percentage of them are buying the ACCESS PR subscription. So we're moving them to a more self-service model than a fully managed model. And so as that continues to happen, we're going to see that contribution from that product perhaps continue to decline where it all becomes then our ACCESS PR or ACCESS IR subscribing products.

And so I don't expect that part to change. What we do see in seasonality is the companies on the public side ramp up through into Q2, and you guys know this, we all know this, the amount of events and conferences and activity going on between Q1 and then annual meeting time, things that happen, the activity tends to kick up pretty quickly here.

And so that is back to the utilization business, right, which is about 40% of our business today is driven from some of that activity. As we continue to increase our percentage of revenue from subscriptions, that seasonality conversation goes away even more. And we had it a lot in years past with our compliance business.

It has become minimalized and it will become de minimis here very shortly. And to be fair, we look forward to those days, right? We want to guide this business by this time next year that we're close to 80% of everything is ARR, and we don't have that seasonality shift and customers can buy up into plans that fit their volume needs, and we don't have to worry about that shift there. I hope that answers your question.

Got it. Understood. Maybe just next one for me. You guys had an interesting kind of number in your deck here, $550,000 implied ARR. I guess is that for the entire solution with Social Monitoring or can you kind of unpack that for me?

Yes. No, that's a great question. And that is just the revenue dollar value attributable to the Social Monitoring add-on. It doesn't impact or affect what they had already spent and/or are spending with us in the future.

So if a customer is spending $12,000 a year for their ACCESS PR subscription and they opted to say, yes, I want Social Monitoring, their annual increase went up $2,400. So it's additive to the top of it. So that $550,000 is the aggregate number. It's actually $556,000 is the aggregate revenue over the next 12 months that we'll earn from those customers that bought the upgrade, but those customers still are paying for the other part of the subscription. So it's just a component, if that makes sense.

Okay. Yes. No, that's helpful. And last one for me. Wondering if you could give an update on the press release, the volume competition. Where do you guys stand today?

Yes. We saw -- as Steve and I both talked about seasonality headwinds a little bit. We're seeing volume across the market come down, right? There is a little bit of decrease in store volume. So we're kind of neck and neck, literally like 0.1% with Business Wire and us in the third position.

Globe and PR Newswire still are the top 1 and 2 in that space. For us, as much as it's been a metric for us to look at volume, we now have to look at volume internally by what we look at as our core customers and our subscribing customers that are core to us as well. So we want to manage what volumes come from subscriptions and which ones come from a PayGo or inbound e-com ways.

So I think all given equal, we haven't really lost much traction. It's just we've all come down just a little bit in volume in the industry. And I expect that to kick back up here for the remaining part of the year. If I go back 3 or 4 years, I've seen the same kind of things happen where volume will drop a little bit across the board.

But by no way is there significant volume drops for us or anybody else in the industry. So I think industry may be at a no-growth mode right now, but that's -- for us, to be fair, we're in the subscription communications business now more than we just are selling a press release business. And so I'm not as worried about that if that happens more often than not.

And that does conclude today's Q&A session. I will now turn the call over to Brian Balbirnie for closing remarks.

Well, thank you. Thank you to everybody joining us today, both on the webcast and the teleconference. I appreciate the questions and follow-ups. I know there's going to be more as you digest data. The 10-Q will be filed here this afternoon after market close.

And I'll be spending the rest of my day at the [ Stone ] conference. So for any of you here in New York and want to stop by, have a chat. I've got a couple of minutes between my one-on-ones. I'm happy and would love to meet you face-to-face and do that. I wish you a good earnings season, and I'll talk to you next quarter. Thank you.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Welcome to ACCESS Newswire's Fourth Quarter and Year Ended 2025 Earnings Conference Call. My name is Charlie Terenzio and I lead product in our PR Optimizer team here at ACCESS Newswire. I joined in 2019 from the Newswire.com business, where I led the PR Optimizer team along with marketing, brand, and product strategy. And I'm fortunate that many of the talented people I worked alongside then are still building with us today. Their passion and commitment have been a driving force behind everything we've accomplished.

From day one, the ACCESS Newswire team welcomed us as partners, and bringing our teams together has made us a stronger, more innovative company. This past year has been transformational from our rebrand to the product advancements we've brought to market, and I can tell you we're just getting started.

Our focus is clear, give the world's largest brands the tools they need to lead in public relations, storytelling, and Investor Relations communications. And we're building that future right now.

But before we begin, I'd like to remind everyone that statements made in this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships, and any other statements that may be construed as predictions of future performance or events are forward-looking statements. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such statements.

We will also discuss certain non-GAAP financial measures, which are provided for informational purposes and should be considered in addition to, not as a substitute for GAAP results.

With that said, I'll turn the call over to our Founder and Chief Executive Officer, Brian Balbirnie, and our Chief Financial Officer, Steve Knerr.

Thank you, Charlie. Not only has it been a pleasure getting to know you since the Newswire acquisition, but having you as part of the team in the product leadership capacity has ignited so many things that we wanted to do here for years.

For those of you that do not know, along with our development team, Charlie is leading the transformation of our subscription product innovation, putting us in an amazing place not only to compete for wallet share, but also have a seat at the table in a first to market innovation.

Good morning, everyone, and thank you for joining us today to review ACCESS Newswire's fourth quarter and full-year 2025 results. Steve and I are grateful for your continued engagement and support as we close out what has been a truly transformational year for this company.

Our fourth quarter results cap off a year defined by strategic focus, operational improvement, and meaningful progress in building a subscription first business. We deliver consistent year-over-year revenue, meaningful expansion and profitability, and continued operational discipline, all while investing in the platform innovations that position us for an exciting 2026.

Revenue for the quarter came in at $5.8 million, up approximately $100,000 sequentially and essentially flat year-over-year. Adjusted EBITDA increased slightly to $881,000 from $871,000 representing a 15% of revenue. Gross margin continued to be strong at 77%, up from 75% in the same quarter of last year.

Before I hand it to Steve, I wanted to highlight a few metrics that demonstrate the continued health of our business. Total active customers grew to 12,802 up from 12,445 in Q3, and up 4% year-over-year. Average reoccurring revenue per subscription customer also increased year-over-year from 10,844 to 12,534. That's up 16% year-over-year, reflecting continued upsell success and platform adoption. Looking at the prior quarter, we still saw an 8% increase in ARR sequentially.

Steve will now discuss the fourth quarter and year end in 2025 for you. Then I'd like to come back on and discuss what we've been up to in Q4 and what we've been doing here in Q1 about our product enhancements and what is in store for our customers into 2026.

Steve, I'll hand it over to you, sir.

Thank you, Brian, and good morning, everyone. As Brian mentioned, this has been a transformational year for us and Q4 was another quarter of generating solid operating margins and cash flow.

I will now discuss some of the details which led to these results. Total revenue for the fourth quarter of 2025 was $5.8 million, a decrease of $27,000 compared to the same period of 2024, making revenue for the full year of 2025, $22.6 million, a decrease of $438,000 or 2% from $23.1 million in 2024.

Core press release revenue was up approximately 2% from the same quarter of the prior year and 1% for the full year of 2025 compared to 2024. The increase for the quarter is due to higher volume. However, volume was slightly lower on a full-year basis compared to the prior year.

The increase in press release volume was more than offset by decreases in Pro plan revenue, webcasting, and IR website revenue. Overall revenue from subscriptions increased to 53% during the quarter compared to 45% during the same quarter of the prior year.

Gross margin percentages improved during the fourth quarter and full year of 2025, increasing to 77% for both periods compared to 75% and 76% for the fourth quarter and full year of 2024 respectively. The increase in gross margin percentage is primarily due to lower headcount due to increased efficiency within our operational teams and systems, partially offset by increased distribution costs as we continue to expand our distribution footprint.

Gross margin for the fourth quarter of 2025 increased $107,000 or 2% to $4.5 million, and gross margin for the full year decreased $126,000 or 1% to $17.3 million, primarily due to the decline in revenue for the year.

Moving down the income statement to operating loss. We posted an operating loss of $761,000 for the fourth quarter of 2025 and $1.9 million for the full year of 2025. Compared to operating losses of $14.3 million and $16.3 million during the same periods of 2024. The primary reason for the decrease in operating loss is related to an impairment loss of $14.15 million recorded during the fourth quarter of 2024, related to reducing the estimated useful life of the Newswire trade name as a result of our rebranding during the first quarter of 2025.

Removing impairment losses, total operating expenses increased $446,000 or 10% during the fourth quarter of 2025 as compared to the same quarter of the prior year. This increase is primarily the result of a one-time cost associated with the settlement of a contract of approximately $336,000 and an increase in advertising and trade show expenses as we launched pressrelease.com and focused on our new branding.

For the full-year of 2025, total operating expenses decreased $674,000, or 3% as compared to 2024, primarily due to a decrease in headcount in our sales and marketing teams earlier in the year, as well as lower product and development consulting expenses. Operating expenses for the full year of 2024 also included a benefit to stock compensation expense of $340,000 related to the resignation of an executive officer.

During the fourth quarter of 2025, we recorded an impairment charge of $250,000 related to our right of use asset and leasehold improvements due to a sublease we executed in December. Execution of the sublease will save us approximately $80,000 per quarter. As previously noted, in Q4 of 2024, we recorded an impairment charge of $14.15 million associated with the Newswire trade name.

On a GAAP basis, we reported a loss from continuing operations of $509,000 or $0.13 per diluted share during the fourth quarter of 2025 compared to a net loss of $11 million or $2.85 per diluted share during the fourth quarter of 2024. For the full year of 2025, net loss from continuing operations was $1.6 million or $0.40 per diluted share compared to a net loss of $13.3 million or $3.47 per diluted share in 2024. Again, the decrease in loss from continuing operations was primarily a result of the impairment charge recorded during the fourth quarter of 2024.

There was no activity for discontinued operations during the fourth quarter of 2025 other than adjusting income tax expense related to the sale of the compliance business. During the fourth quarter of 2024, we recorded income from the compliance business of $750,000 net of taxes, which was approximately $0.19 per diluted share. For the full year of 2025, net income from discontinued operations was almost $6 million or $1.51 per diluted share compared to $2.5 million or $0.65 per diluted share for 2024.

Looking to some non-GAAP metrics, Q4 2025 EBITDA was $251,000 or 4% of revenue compared to $770,000 or 13% of revenue for the fourth quarter of 2024. Full year of 2025 EBITDA was $1.3 million or 6% of revenue compared to $840,000 or 4% of revenue for 2024. Adjusted EBITDA increased to $881,000 or 15% of revenue for the fourth quarter of 2025 compared to $871,000 also 15% of revenue for the fourth quarter of 2024. For the full year of 2025, adjusted EBITDA increased to $3.2 million or 14% of revenue compared to $1.8 million or 8% of revenue in 2024.

Non-GAAP net income for the fourth quarter of 2025 was $675,000 or $0.17 per diluted share compared to $819,000 or $0.21 per diluted share in the fourth quarter of 2024. For the full year of 2025, non-GAAP net income increased to $2.2 million or $0.57 per diluted share compared to $720,000 or $0.19 per diluted share during the full year of 2024.

Turning our attention to the cash flow statement and balance sheet, we ended the quarter with $3 million of cash on hand. Adjusted free cash flow for the fourth quarter of 2025 was $467,000 compared to $413,000 for the fourth quarter of 2024. For the full year of 2025, adjusted free cash flow was $1.3 million compared to $2.8 million during 2024.

The year-to-date amount for 2025 includes over $2.2 million paid in taxes, primarily related to the sale of the compliance business compared to only $342,000 paid during the prior year. Our deferred revenue balance, which is revenue we generally expect to recognize over the subsequent year increased $522,000 or 11% to $5.3 million as of December 31, 2025 compared to $4.7 million as of December 31, 2024.

I will now turn it back over to Brian, who will provide some updates on the business, customers and subscriptions, and some new product development we have planned for 2026. Brian?

Thanks, Steve. Q4 capped off a year that I believe will define ACCESS Newswire's future. We did virtually everything that we said we would do. We transformed the business, redefined the core offerings, and moved the business to majority reoccurring subscriptions, emerging leaner, more profitable, and a more innovative company. Now it's time to grow.

For the full year 2025, as most of you know, we accomplished the following: Completed the strategic rebrand to ACCESS Newswire, divested our legacy compliance business, sharpening our focus, reduced debt by over 83%, reduced OpEx something we will continue to do into 2026. Retooled our entire back office system and processes end-to-end. Grew subscription revenue to approximately 53% of total revenue at the end of 2025. Increased ARR per subscriber by 16% year-over-year, as we talked about previously.

Deployed our AI editorial validation internally, saving 5% of editorial time per release. Launched our ACCESS EDU and the Bateman Study Competition. Launched a sister brand, pressrelease.com with single circuit distribution that began marketing efforts here in Q1. This coupled with the following updates here in Q1, have us hitting on virtually all cylinders, launching our AI validation that we previously released to our editors in a customer-facing environment now called ACCESS Verified.

Social monitoring, a key new component of our subscription set that has set forth a path to see ARR increases at the beginning of Q2. This was initially released to thousands of EDU subscribers at the end of 2025. ARR increases of approximately 25% will be seen beginning Q2.

Marketplace, the beginning of several partnerships we believe will drive further awareness to our brand with companies like Hootsuite and many others to follow here in the coming quarters. And another one that I am a big fan of is KillTheReport. Our first version of this industry-leading news distribution report gives our customers the ability to see real insights into their stories by way of peer content comparisons, brand sentiment, engagement potential, LLM citation scores, and recommendations.

We have several levels of advancements planned here for release throughout 2026, but the takeaways are twofold. Customers will get better insight, no BS reporting, as we will all see engagement in ARR lift and having an incremental add-on to this current customer subscription.

There is so much planned we will talk about in the coming months on our Q1 call, all of which are part of our 2026 strategic goals and continued product innovation and brand development as an industry leader, which we continue to believe will move us towards our double-digit growth and further ARR projections.

Speaking of subscribers and ARR updates, we ended Q4 2025 with 974 subscribing customers, up from 972 at the end of Q3 and 965 from Q4 of last year. While we adjusted and corrected our targets to 1,200 subscribers at the end of the year after accounting for the compliance business divestiture, we're not pleased with our churn and what we are today. We saw a slow second half to 2025. We sold 90 new customers in Q4 with an average ARR of 12,991.

So we're seeing ARR strong, and we're doing some things to change. Our subscription platforms pricing and what we believe will be go-to-market here, in the back half of the year. Equally important, our ARR per subscriber to end the year came in at 12,534, which represents meaningful value expansion per customer and speaks to the depth of our platform adoption and cross-selling ability. And I think this is why it's vital for us to continue to innovate with things like social monitoring, KillTheReport, and the marketplace I just discussed a few minutes ago. At the end of the prior quarter, we were 11,651.

This ultimately resulted in 8% sequential ARR growth and 16% year-over-year, as Steve and I said earlier. We expect subscription counts in the ARR per subscriber to both accelerate in 2026, driven by new product suites launched at the end of the year and into this year as we continue to focus on our trade-up and trade-in strategies. Additionally, as we monitor the economic landscape here in Q1, we are testing lower subscription commitments to see if scaled user adoption exists and what products resonate best with the market.

Having virtually a fixed cost application and product offering allows us the flexibility to mix and match solutions that find the best fits for new businesses, scale-up brands, and enterprise. We think the first half of the year will tell us enough to understand the market and where we need to optimize as necessary.

We look at economic factors in the industry, and we use those economic factors to make decisions on budgets for our customers, and this is why we think there could be an opportunity for a differentiation in our subscription products. New product launches end of Q4 and into Q1 2026. To expand on what I said earlier, one of the most exciting chapters in ACCESS Newswire's story is now underway.

The investments we have made throughout our 2025 year in platform infrastructure, AI, and integrations are now converting into customer-facing products. I want to walk you through what we've launched that I briefly talked about earlier and what is coming here in Q1 and into the rest of the year.

Our ACCESS PR subscription platform now has real-time social monitoring. In late Q4, we completed this major upgrade into our ACCESS PR subscription, integrating real-time monitoring and sentiment analysis across more than 30 social media platforms. Customers can now track mentions, measurements, earned media value, and understand brand sentiment impact not only for them, but the competitive core of what they're going to market against, all within the same dashboard they use to distribute their press releases today. This upgrade was launched here in Q1 and has defined ARR lift beginning in Q2 next month, as we talked about earlier.

Really outside of prepared remarks, just for us to tell you something competitively as you look at this, if we think about the other 3 newswires, not any one of them in a single platform offers not only media pitching, monitoring database, but social all-in-one system. They tend to allow you to log into different platforms, and we think that is a significant advantage for us as we go to market fully now after the total addressable opportunities for us.

These key capabilities include real-time brand monitoring across 30-plus social media digital channels, sentiment scoring and automated alerts for brand and campaign activity, earned media value analytics tied directly to press release distribution, and our KillTheReport functions.

Marketplace add-ons to integrate one of the world's largest social media management platforms, Hootsuite, enabling customers to schedule, publish, analyze content across multiple networks, and distribute with Hootsuite in a matter of seconds, all automated through their ACCESS PR subscriptions. This product directly addresses one of the most requested features from our enterprise and scale-up customers, and we expect this to be a meaningful driver to our ARR expansion and new customer acquisition here this year.

To further expand on what I call KillTheReport, it is an AI-powered real-time prompting and alert-based brand activity content performance engine. It measures your distribution reach. This product is directly response to longstanding industry frustration, which is misleading distribution metrics that all of the press release service providers provide today and have for 80 years. We believe this is a differentiation that the market has never seen, and ACCESS Newswire is meaningfully passionate about having this competitive product replacement for a typical distribution report of something that will measure your brand in the future and beyond.

It gives you a point-in-time report builder that executes real summaries by one click. It's full data transparency, all metrics surface directly from our customers, eliminating implied opaque reporting. And what this really means is there's no implied, "This is your traffic." There's no implied, "This is your total audience." It is real analysis done at the captured moment of the 5 days, at the one-week marker, 30 days, and custom reporting, if you wish.

We made good on our commitment to KillTheReport. This agentic AI-driven reporting system replaces the outdated static distribution report that I just talked about with a living real-time intelligence layer for our customers. We're not only planning to make this product optional as an upgrade, but also anticipated several meaningful quarterly updates and advancements to drive further value to our customers. This is going to be done in our platform in real time with our agent builder solution that is a big competitive advantage for us that we'll talk about in the coming quarters.

Our AI editorial assistant, it became customer-facing. As many of you know, we've done it internally for a while. This gives our customer the ability to create and draft their story or press release and allow our ACCESS Verified systems in to analyze content, analyze compliance and market data trends to ensure that the press release adheres to all of our distribution partners' requirements as well as our editorial standards.

It provides comments and suggestions to the customer on what they can do to improve, all in real time or they have the option to bypass. Still regardless, we will never, ever defer human editorial eyes at least twice on every press release. This ACCESS Verified system gives our customers the ability to scale and rank and understand the sentiment before submission. We think it's going to be a significant driver.

And to be fair to our customer in the advancement, it also gives us a significant competitive advantage where we then have fixed cost distribution scale, where we can handle growth without any incremental cost, further boosting our gross margins like we have from 75% till today at the end of the year at 77%.

The customer-facing AI editorial assistant offers an automated content review and accuracy tone and compliance before submission. This proprietary AI-driven recommendation that improves clarity, AEO and LLM impact, and wire readiness. Misinformation and disinformation has been big for us for years, and this also flags and continues our commitment to content integrity, not only for the markets, but our customers and our brand itself as well as provides real-time readability scoring with peer benchmarking.

We have already 4 or 5 versions of this slated for this year of upgrades that customers will continue to get, and we love the feedback from them because it helps drive that product even more for them. Early customers have said this has been exceptional for them. It's saved them significant time. It's got additional review cycles and improved confidence scoring and provide better engagement for them. So as we see and continue that, look for some white papers coming that we're going to talk about how this is leading an industry rather than following.

Something else that we've mentioned in past very briefly, and you may have seen a lot of it on LinkedIn and social media channels, was PRSSA, the Public Relations Student Society of America, every year has something called the Bateman Competition. And this year's Bateman product company selected was us, ACCESS Newswire.

Out of that, we built something quick to market in less than 90 days in Q4 called ACCESS EDU. It was to address the Bateman competitors, which was just several schools we'll talk about in a second. But it gave real-life students in the classroom the ability to use our product to not only teach from a professor standpoint, but also arm these seniors with the ability to understand Public Relations as it sits from a technology, a storytelling process, a media pitching process, and everything else.

So the result, we expanded the program to over 2,000 students, over 100 universities, many of which were a part of the official PRSSA Bateman study I just spoke about. It kicked off here at the beginning of this quarter. These students had full access to our PR platform, including the new social monitoring and AI editorial tools as part of their competition campaigns.

The initial service is dual purpose. It gives back to the next generation of communication professionals while creating a pipeline of future ACCESS customers who graduate with hands-on experience on our platform. We view the EDU program as a long-term growth channel and brand-building investment that will compound over time.

Early indications have seemed strong as we have seen handfuls of schools and their PR agencies enter into our pipeline in the current quarter, as well as close deals in this first quarter as well that we'll talk about next quarter. We'll look forward to sharing the Bateman winner as we go through judging here in the next couple of weeks, and stay tuned to the press release on what that's going to look like.

We're also going to plan to release several upgrades to our EDU program. This is not just about Bateman. This is about institutionalizing ourselves within the education system to be a part of the syllabus for the PR schools. So live classroom training and certifications for graduating students will be had from ACCESS Newswire's infrastructure. This will drive future revenues in many ways. One, graduating students will carry and their certificates into the workforce and bring ACCESS platform with them.

And second, our platform is the leading PR tool gained by university department trust. With that opportunity will come licensing from other departments within the university systems and educational platforms to use our Public Relations storytelling platform. For context, there are almost 50 schools, 2,600 students. There is 350 faculty members and teachers, and there are PR professionals totaling another 128 that are associated with the schools in this agency relationship that have all have been using our tools for the better part of the last 4 months.

The potential value here for us in moving all schools into our ARR model, as well as thousands of students. As they move into their careers, we have the potential to be their PR solution of choice or the certification program we just talked about. Although significant brand was built from the Q4 and early into Q1, we feel strongly that this EDU program is a long-term investment, as we just said, where we'll begin to see revenue contributing mid-2026.

And lastly, pressrelease.com, we talked about in our last call briefly, has an entirely new concept for us. We expect to see the brand continue to gain traction beyond the small contributions it had in Q4, where we saw about 100 new customers and about $40,000 in revenue for about a 4- or 5-week period. Half of those customers came back to repurchase, which is a good indicator for us.

Going into this year, we expect the brand and its personality, the Press Release Parrot, will come to life as not only this first single-circuit press release platform available to purchase right online, but our technology will also allow us to do this, to be the only ones allowed to do this, to be agile enough to transition as the most predominant wire service available today.

We have a competitive advantage to scale up this new business. When maturity and need arises, our ACCESS main brand will be there to convert these customers into subscriptions into full ARR, whereas today, pressrelease.com is our feeder for new customers that want to start with just one press release.

If I move along to trends in 2026 and outlook, the combination of Q4 financial performance and our new product momentum gives us real confidence heading into 2026. We entered the year with revenue growth, expanding gross margins, and ARR base that is growing in both volume and value per customer. Albeit some of these metrics are not as high as we'd all like, we're building significant confidence within our organization and in our customer installed base that we can continue to see this growing and growing.

Our ARR per employee continued to trend upwards this year. It's a metric that we look at internally. The divestiture of the compliance business, combined with our team's rebuilding efforts in sales and the productivity gains from our AR automation, position us well to achieve more in the future.

To summarize our position entering into 2026, we delivered on almost every major operational commitment we made at the start of the year, absent of our number of subscribers. Our ARR per subscriber exceeded $12,500 up 16% year-over-year, as we said, a clear sign that our platform value is resonating. We have launched and/or are launching 5 meaningful product capabilities that expand our TAM and increase subscription values. The balance of these we'll talk about on our next call. And we also enter 2026 with a clear balance sheet, a focused team that is ready to execute on growth rather than divestiture and retooling the business.

Looking ahead in 2026 as well, our focus is clear and centered on top line growth, driven by subscription expansion, new product monetization, and enterprise customer acquisition. Subscription customers, we are targeting to reach up to 1,500 subscriber customers by the end of 2026. ARR per subscriber, we expect to continue to expand on our enterprise base, and we will message this new test that we're doing on a small startup scale-up brand subscription.

Adjusted EBITDA. We expect to move adjusted EBITDA margins into the mid-to-high teens by the second half of this year, as we've messaged and analyst recommendations show.

Product momentum. Full monetization of the enterprise bundle, all AI editorial systems, and the KillTheReport platform through Q1 and into the full year. What this essentially means is a $10,000 to $12,000 subscription becomes $14,000 to $15,000 fairly quickly when customers upgrade to these new features. We've got a backlog of significant product advancements that are going to continue to have be had that will evolve our subscription business entirely different than it is today, that it will be by the end of 2026.

ACCESS Newswire is becoming a stronger, more predictable, and more profitable business. We said we would transform, and we did. Now it's time to grow. It's on us, and we are ready.

Something else I want to touch on in the state of the SaaS software industry. In the last couple of months, collectively, we've seen billions of dollars in market cap value wiped away from large enterprises like Adobe and Microsoft and Salesforce in combination.

I only bring this up because of a couple reasons. One, the AI advancements happening so quickly today, some of which recently have been geared towards user-based SaaS businesses. These are the companies that sell an application of software and a SaaS model to a customer on a seat or per user basis. And like many of our competitors that do that in the public relations industry, we do not do that. We sell a subscription on a one-to-one basis to an enterprise or to a customer, a business, and there's not additional cost for users.

And although the markets and investors have weighed heavily on companies that have that model because AI is eroding that, we are insulated from that. And so we feel strongly that our subscription model that we began with 2 years ago is something that is viable that the market is accepting, and the financial community also understands as well. That puts us in a really good position to have one recurring fee per customer, regardless of users or usage or anything else. And it's a model that we can deliver sustained gross margins and an accelerated adjusted EBITDA with scale.

We can't thank you enough for your time today. With that, I'll turn the call back over to the operator for the questions-and-answer sessions. Operator?

[Operator Instructions] Our first question is coming from Mike Grondahl with Northland Securities.

Brian, the press release notes that you anticipate generating incremental revenue through premium subscription tiers and per release pricing. Could you give a couple examples of those?

Yes, absolutely, Mike. Thank you for the question. We'll break it up into a couple of different parts. The first part today, customers are purchasing both a fixed fee subscription model, which includes their news distribution, media monitoring, database, analytics and pitching. Those subscribing customers have upgraded to a call it a plus Pro version of their subscription that now will include their social media monitoring as well.

So the lift in ARR is $200 additional per month for those customers. That is the incremental. So when we talked earlier in the call about adding additional products throughout the year, we're confident and believe that the same model will hold throughout the year as we continue to add on vital components to them that they'll continue to upgrade to take advantage.

On a single press release, the second part of the customer that can't commit to a complete subscription for the year has the option to license or buy or use any one of our products in a singular form. They're now given the option to add social monitoring and/or an added distribution report on a per product basis. Gives them the option to try, test, and use the solution without the commitment, and then gives us the opportunity to build the pipeline to convert them to subscription customers later.

The common hashtag, KillTheReport that we've been using for the last couple of quarters will be one of those marquee products here beginning in a couple of weeks. Customers will get their traditional distribution report because that's what the industry is used to, and we will guide them down the path of the more interactive report that we'll be showing on our website here by the end of the week. And folks will be able to upgrade to that again on a pay-per-use basis so or a subscription basis as well.

Got it. And then could you talk a little bit about volume trends and pricing trends that you're seeing on the Newswire side? I think you said volumes were still down 1% year-over-year, and maybe that was revenue, but just talk about those 2 trends a little bit?

Yes. We're holding price. We've actually done very well in the market. We continue to do renewals and new deals at higher per press release prices than the prior year. I think that's a maturity and a branding exercise. We went through a number of years like everybody else did when they started in this industry, that you have to build brand, you have to build trust, credibility, and follow through execution. And we're long past that now, so we have a seat at the table to take a meaningful price and share.

The good news for us is because of some of the AI advancements we've done, because of the fixed distribution costs for the most part that we have, volume indicates significant expansion in gross margin and EBITDA margin for us. So now focus is back on volume growth, storytelling for our customers. That is aided by a several different things in the market. One, not to continually use the words of AI or LLM, but every natural language processing system needs more content to ingest, and that content needs to come in different mediums, press releases, blogs, posts, and white papers.

So the more content customers are doing, the more chances that they're going to see their citations and their web content and their press releases appear at LLM searches. So we're advocating to our customers that the more concept is better. So we're going to begin to see volume increases as a result of this.

We are testing with a partner our product at the end of the year that will give our customers the ability to make their website and their newsrooms LLM ready so that they become indexed like they were on Google and how they have been on Google for years. That dynamic on world is changing. So there's a lot that are going to happen there. So we see volumes increasing rather than being flat or single-digit decreasing in the market. And to be fair to all of us, that's not just for us, that's for everybody.

That's it as an industry as a whole, and that's one of the reasons why we released pressrelease.com is to give those early customers beginning to tell their stories and understand what public relations is, the ability to buy a single circuit for a lease cost to get involved and then grow from there. And then we saw a good percentage of those customers, 40-plus percent of our new pressrelease.com customers in Q4 come back and repurchase. And so those are good indicators for us. And again, we continue to increase those prices over the period, which is a strong indicator that the market is there.

Got it. And then lastly, just how should we think about OpEx in 2026 kind of relative to '25?

Yes. Look, I think that there's further optimization that we can do. As Steve mentioned in some of his prepared remarks, right, we were fortunate enough to exit a lease that we had 2 years left on. There's some incremental savings there. It's about [ $320,000 ] a year in savings we'll get there. We've got some additional G&A and other OpEx savings that we're going to monetize throughout the year by efficiencies in technology, efficiencies in workflow automation, systems that we're streamlining. Steve and I and the management team continue to look at it and we'll be at it again today trying to find the next layer of it. So we expect them to hold to what they were or below what they were at 2025.

Our next question is coming from Jacob Stephan with Lake Street Capital Markets.

Nice quarter. I guess just to start out, maybe I'm wondering if you could kind of break down the KPIs and give a little bit more detail here. I know you guys had 47 new customers, noted 45 came from EDU customers. And then in the slideshow, you had 974 subs, and I understand the math 974 plus 45. But I'm wondering if you could kind of break that down on the EDU customer side a little bit. Are those actual universities or are these students or help me think through that?

Yes. Those are actual universities. Our objective was the EDU program is that we felt strongly that if you think about the typical school that you went to, there is a degree-focused public relations and communications department within every school. The PRSSA teams are very involved in that school at the university, but we looked at it beyond that. So those numbers are just those schools within the universities that have deployed our programs in a teaching exercise to their senior students to be able to use media monitoring, pitching database, and how to write a press release and a story.

When we look beyond that, the opportunity for us is if you go down the hall or across the university campus to the engineering department or the nursing program, or any other degree program, they also have their own public relations teams there doing their work. And by research, we've been able to identify that there's at least eight schools within each university that have a public relations department that do not know about us and are now being introduced to us from the public relations professors at that part of the school. So the opportunity is significant for us. We're going to invest sales and marketing there as we round out the Bateman program here in the next couple of weeks and select a winner. We're going to expand that.

The second part is these free students, the [ 2,300 ] and change, they're registered in our platform as EDU students. They are free. We don't account for them in our customer numbers or our subscription numbers. They are using the product on behalf of the university, and they'll be converted in the end of the year at graduation to an individual plan with the option for a monetary component to take with them into their career-focused areas.

So our hope is we're going to get a percentage of those to convert into customers that will go into private practice, public relations firms, go into enterprises in the public relations or marketing departments, and bring our tools with them as their certifications will illustrate.

So we think it's a long investment into something that we'll start to see incremental growth. But you're right, you did the math on the numbers from the press release to the prepared slides today. That number is those EDU customers.

Okay. And then maybe just on the ARR front, you guys kind of said that, the ARR does not include EDU customers. Obviously nice improvement there, but maybe, are these customers higher ARR or lower?

Yes. The EDU customers through the Bateman program are a 0 ARR model. We agreed with PRSSA as a method of the program to provide those subscriptions to them during a period at no cost. When Bateman is over, they convert. We've already converted a couple of them already in the last couple of weeks. We've got several proposals out for others. We've closed 2 PR firms this quarter as a result of some of the efforts that the Bateman program has done. So we'll see the monetary side of this happening in this quarter.

Okay. Got it. That's helpful. And then, I just wanted to touch on the gross margin improvements year-over-year. I'm wondering if you could kind of break down the 200 bps plus improvement year-over-year. I know AI has been a huge focus for you guys. How much of that's AI driven? How much do you feel like is more scale and kind of the ARR expansion?

Yes. I think ARR expansion is a contributor. I think AI is a contributor. I would say that I don't know that scale yet is the contributor to the influence of that. I'd say it's 50/50, right? I think our ARR increasing is helping. I think efficiency gains in distribution, fixed costs are contributing. We've been negotiating those contracts for years to get us to a position that when scale does happen, the flow back to gross margin contribution is even more.

And so as we talked about earlier in a call, a question from Mike is that as we see the industry wanting to tell stories more, utilize press release as a foundation to have LLM indexing and volume starts to increase, we're doing that from a fixed AI cost, we're doing that from a fixed distribution cost, we're doing that from a fixed editorial cost.

So the more volume that comes, the incremental gross margins will illustrate themselves and show. So that's one of the reasons why we put AI to work both in a customer and in a back office, usage pattern. But I think it's important, from a customer perspective to know that our editorial human eyes are still will always be there.

This is a curation and quality content and we want to be sure that we uphold that responsibility to our customers in the market. That's how we keep our distribution. AI is a great efficiency gain for us and we're beginning to see even more and more improvements there, but it will never replace the human curation portion of that.

Got it. And then maybe just one last one for me, kind of broader picture question. What aspects of the overall product strategy changing, the go-to-market strategy, what do you feel like is going to be the biggest contributor to hitting that 1,500 subscriber number at the end of the year?

I think there's a couple components, and this industry is moving very rapidly. And not only is it moving rapidly from an economic perspective that we can talk about, it also is moving from an innovation perspective. And a lot of companies are left behind because their technology stacks are in a position that they can't innovate at the pace of which a good many of us can and us being the predominant one.

We spent the last year after divestiture of our compliance business, retooling our stacks, building to be very agile and build an automation management system on top of everything that we can pivot and change our applications and customer outputs for deliverables within seconds, rather than months or quarters like the competition does.

And so we see that as a big innovation for us that we're going to be able to do more in our platform than most can in this industry. And so what I'll lead you down the path, Jacob, really is that at the end of the day, the storytelling process is more than just a press release. It is a message. It is a snippet on social media. It's a podcast. It's a blog post. It's an LLM citation in a trusted article that somebody from ChatGPT or Perplexity picks up. And there needs to be a curation platform for that.

Today, when we look at our network of our competitors, everybody does a really good job of doing 1 or 2 of these elements. And that's not to discredit them or take anything away from our competition, but we also do that. And we do it in a way that gives our customer the ability to create a story, share it on social, pitch media, and do everything from one single interface. And so that is, say, 20% of the competitive marketplace landscape today does that.

The next innovation for us in the second half of the year is going to give the ability for customers, like the presentation you saw today was done with our own technology. We built that presentation for today's earnings call in about 8 minutes, taken from content that Steve and I drafted in our prepared remarks.

We are looking at products and tools like that that will take our business from the Public Relations departments and Investor Relations departments down the hall to the marcom side where budgets are larger. And that's why partnerships with Hootsuite and others are very critical for us as we begin to pull in some of the real-time posting of what Hootsuite's been able to do and others to integrate fully into our platform.

It's going to give us a position to go in selling an enterprise communications tool platform to not only PR and IR, but also the marketing departments as well. So in the second half, you're going to look to see, our platform take on a very different ARR of component selections and product advancements. And we spent a good amount of time in the last 6 months of pre-building testing and using customer feedback to make those products and components much stronger. So we couldn't be more excited about that.

The Public Relations, Investor Relations space is large. The TAM is still there like it was years ago. It hasn't changed. But for us to move out of it and down into marketing takes the total addressable market and times it by 4 or 5. And that's where we're focused, is to go down that hall and build strategy and thought leadership there.

Our next question is coming from Brock Erwin with CleverInvesting. Brock. I'm afraid we can't hear you, sir.

Sorry, I was on mute. Okay. I hope you're doing well. I can really sense the excitement from what you guys are working on and the building for the future. So I think this is an interesting transformational time for the company to be sure. Just a couple of questions from me. The first is, it looks like you guys repurchased a small number of shares in Q4. Is it possible you guys can disclose if you continued repurchasing in Q1? And also, how do you think about the pace of repurchases relative to other investments you might be making?

Yes, it's a great question, Brock. Nice to hear from you. Yes, we did purchase a small amount of shares during Q4 under the previously announced repurchase plan of $1 million. There is a good portion of that plan that's still left that we'll be resuming here shortly. The commitment for the repurchase is still consistent. We haven't wavered from that. There's still 3/4 of that amount still sitting there that is earmarked for us to execute against, and we have every intent to continue to do that.

When that plan's filled and completed, as you know, the Board will look at other options, for part of our capital allocation strategy, if there's additional repurchase plans will be needed and more advantageous for us to do so, and make that decision at that point. But yes, there is still. I think the 10-K will illustrate to you today when it's filed this afternoon, there was 18,000 shares or 20,000 shares were repurchased during the fourth quarter. And you should expect the remaining of those to be repurchased here in the first half of the year.

Awesome. Okay. Cool. And then another thing you touched on in your prepared remarks was the churn and customers falling off of those subscriptions. Can you just talk a little bit about what you're doing to address that? Like, what are you learning from your customers and what are maybe some improvements you can make to improve those metrics?

Yes. In November of last year, we reset our customer experience teams. We put a new manager on top of the team, rebuilt some of the processes internally to ensure what we call internally time to value is measured more accurately, meaning the customer is trained, loved, and made sure they're using the platform to begin to feel the value of it sooner than later.

Look, Brock, I'll tell you this, I think you've known us long enough, like everybody else, we're going to give you the facts as they are and not have excuses. But the real true reality is that 70% of the churn customers in our subscription business is due to credit card failures and payments. It's not due to application use or application problems. And so we looked at just our meaningful churn. It's a fraction of what it is in printed form. But look, to be honest with you, churn is churn, and we report it as such.

There are mechanisms that you can do from a payment perspective. As you know, we're a B2B business, not an e-com business. We're finding out that majority of subscriptions are purchased much more in e-com way than any other way. So we are retooling some of our Magento front-end systems and credit card intel knowledge to be able to be predictive and understand the risks of taking credit cards, what kinds of credit cards they are, and how those payments work.

And so our sales team, the beginning of Q1 began removing monthly options to customers and going to quarterly or annual payments. That will help further reduce the credit card issues that we've had in the past. But make no mistakes, that's what those are. And so we're doing a lot here at the end of Q4 and into Q1 to help change some of that.

Steve and myself meet with our Director of Operations that runs CX and our sales leaders every week to discuss customer usage, customer training, customer feedback loops to be sure that we're being reactive and doing everything that we can do to reduce that churn. And we're confident that we're going to do that, but we have had some issues there in the past 3 or 4 months, there's no doubt.

Thank you. As we have no further questions in queue at this time, I would like to turn the call back over to Mr. Balbirnie for any closing remarks.

Ali, thank you as well. As always, thank you again to everyone else for joining us today. We are energized by the fourth quarter milestones and the progress made throughout 2025, and the product momentum we are bringing into 2026. ACCESS Newswire is positioned well for the future with a scalable platform, expanding recurring revenue, innovation and new products, and a focused team dedicated to execution and growth. We appreciate our shareholders, partners, and customers for the continued trust and support in 2025. With the year of transformation in 2026, it will be a year of growth, and we look forward to updating you next quarter. Thank you.

Thank you. Ladies and gentlemen, this concludes today's call and you may disconnect your lines at this time. And we thank you for your participation.

Greetings, and welcome to the ACCESS Newswire Third Quarter 2025 Earnings Conference Call. [Operator Instructions] And please note, this conference is being recorded.

I will now turn the conference over to your host, Kristin Iacovelli, Vice President of Webcasting. Ma'am, the floor is yours.

Welcome to ACCESS Newswire's Third Quarter 2025 Earnings Conference Call. My name is Kristin Yancavelli, and I lead the company's Webcast and Events division as the Vice President of Westing. I've been with ACCESS for nearly 20 years, including my time with an organization that became part of ACCESS through an acquisition about 6 years ago. It's been an incredible journey watching the company grow and evolve into what it is today. I'm excited for what's ahead and proud to continue helping some of the world's leading brands and newly public companies share their stories each quarter.

But before we begin, I'd like to remind everyone that statements made in this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships, and any other statements that may be construed as predictions of future performance or events are forward-looking statements. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such statements.

We will also discuss certain non-GAAP financial measures, which are provided for informational purposes and should be considered in addition to, not as a substitute for GAAP results.

With that said, I'll turn the call over to our Founder and Chief Executive Officer, Brian Balbirnie; and our Chief Financial Officer, Steven Knerr. Brian?

Thank you, Kristin. I think it's fair to say you, as well as many of us here at ACCESS, have a significant amount of industry experience, but all the credit to you for leading for over 20 years, what is probably over 50,000 webcasts with you and your team. Truly amazing. You are a rare breed, and I'm so very grateful for your customer-first passion and how you lead and mentor your team, specifically working over this past weekend for us, with one of our new IPO customers, who is doing their first earnings call today. Congratulations for me, America, and thank you.

With that, good morning, everyone, and thank you for joining us today to review ACCESS Newswire's third quarter 2025 results. As always, Steve and I appreciate you taking the time to be with us today, specifically on this 106th Veterans Day. Our 8-K and 10-Q will follow tomorrow as the SEC is closed on this holiday. Our third quarter results reflect continued progress in our core business and ongoing execution against our strategic priorities. We delivered both sequential and year-over-year revenue growth, meaningful improvement in profitability, and strong operating discipline, all while continuing to invest in our product and platform enhancements that will drive our future growth.

Revenue for the quarter came in at $5.7 million, up 2% sequentially and year-over-year from $5.6 million. Adjusted EBITDA increased to $933,000, representing 16% of revenue, up from $546,000 or 10% in the same quarter of last year. Our gross margins held steadily at 75%, consistent with prior year levels, and operating loss improved significantly to $184,000 compared to a loss of $604,000 in Q3 of 2024. These results reflect the positive impacts in our operational realignment earlier this year, our continued focus on cost control, and our accelerating shift to subscription-based revenue.

Before I hand the call to Steve, I want to highlight a few metrics that show the health of our business. Total active customers grew to 12,445, up slightly from the prior quarter and year. Subscription customers increased to 972, representing modest sequential growth and continued retention strength. Average recurring revenue per subscribing customer also rose to $11,651, up 14% year-over-year, evidence that our value proposition is resonating and our upselling strategy is working. We're encouraged by the progress, but equally focused on the road ahead, continuing to scale efficiently while driving innovation and expanding our share in the market.

With that, I'll turn the call over to Steve to walk you through some of the financial results in more detail. Steve?

Thank you, Brian, and good morning, everyone. Happy Veterans Day to all of our former members of the Armed Forces. We are extremely grateful for your service and all you've done for our country. As Brian mentioned, Q3 was another quarter of generating increased EBITDA and non-GAAP net income while increasing revenue and lowering operating expenses. I will now discuss some of the details which led to these results.

Total rental revenue for the third quarter of 2025 was $5.7 million, an increase of $84,000 or 1.5% compared to $5.6 million for the same period of '24. For the first 9 months of 2025, total revenue was $16.8 million, a $411,000 or 2% decrease from $17.2 million for the same of the prior year. The increase in revenue for the quarter was due to an increase in our core press release revenue of 7% due to an increase in volume. For the 9 months ended September 30, 2025, press release revenue increased 1%. However, this was more than offset by declines in revenue from our Pro webcasting and IR website solutions. We anticipate increases in core press release revenue will lead to higher revenue growth rates in the quarters ahead.

Gross margin percentages have remained relatively flat for both the 3 and 9 months ended September 30, 2025, as compared to the prior year at 75% and 76%, respectively. Although we have experienced increased distribution costs as we continue to expand our distribution footprint, we have been able to offset this with efficiencies in our operations teams in order to build scale. Gross margin increased $40,000 or 1% and decreased $233,000 or 2% for the 3 and 9 months ended September 30, 2025, respectively, as compared to the same periods of the prior year.

Moving to operating loss. We posted an operating loss from continuing operations of $184,000 for the third quarter of 2025 and $1.1 million for the first 9 months of 2025, compared to operating losses of $604,000 and $2 million during the same periods of 2024. The decrease in operating loss is a result of lower operating expenses, which decreased $380,000 or 8% and $1.1 million or 7% for the 3 and 9 months ended September 30, 2025, respectively, as we remain committed to developing efficiencies and optimizing our teams.

General and administrative expenses decreased $409,000 or 22% for the third quarter of 2025 compared to the third quarter of 2024 due to a reduction in bad debt expense, employee-related expenses, as well as savings from indirect costs associated with the compliance business. For the first 9 months of 2025, general and administrative expenses decreased $185,000 or 3% compared to the first 9 months of 2024. This is due to the same reasons I just noted; however, was partially offset by a one-time benefit recorded in the first half of 2024 of approximately $340,000 due to the reversal of stock compensation related to the resignation of an executive officer. We will continue to seek opportunities to reduce G&A expenses and are currently negotiating a sublease on our corporate offices, which we anticipate could save us over $300,000 a year.

Sales and marketing expenses increased $34,000 or 2% and decreased $924,000 or 16% for the 3 and 9 months ended September 30, 2025, as compared to the same periods of 2024. The decrease for the 9-month period is due to lower headcount throughout the first 6 months of the year. However, as of the third quarter, the team has been built back to where it was a year ago. Product development expenses have remained consistent for the 3 and 9 months ended September 30, 2025, as compared to the same periods of the prior year. Decreases in costs related to consultants were partially offset by declines in capitalized software. Brian will talk further about some product enhancements coming this quarter and the early part of next year. And as such, we will expect to begin to capitalize more product development expenses related to such enhancements.

On a GAAP basis, we reported a loss from continuing operations of $45,000 or $0.01 per diluted share during the third quarter of 2025 compared to a net loss of $870,000 or $0.23 per diluted share during the third quarter of 2024. For the first 9 months of 2025, net loss from continuing operations was $1 million or $0.27 per diluted share compared to a net loss of $2.3 million or $0.61 per diluted share in the first 9 months of 2024. There was no activity for discontinued operations during the third quarter of 2025 compared to net income of $404,000 or $0.11 per diluted share during the third quarter of 2024. For the first 9 months of 2025, net income from discontinued operations was almost $6 million or $1.53 per diluted share compared to $1.7 million or $0.45 per diluted share for the same period of 2024. The increase is primarily a result of the gain on the sale of the compliance business.

Looking to some non-GAAP metrics. Third quarter of 2025 EBITDA was $537,000 or 9% of revenue compared to a loss of $212,000 or 4% of revenue for the third quarter of 2024. For the first 9 months of 2025, EBITDA was $1 million or 6% of revenue compared to $70,000 for the first 9 months of 2024. Adjusted EBITDA increased to $933,000 or 16% of revenue for the third quarter of 2025 compared to $546,000 or 10% of revenue for the third quarter of 2024. For the first 9 months of 2025, adjusted EBITDA more than doubled to $2.3 million or 14% of revenue compared to $961,000 or 6% of revenue for the first 9 months of 2024.

Non-GAAP net income for the third quarter of 2025 increased $573,000 to $760,000 or $0.20 per diluted share compared to $187,000 or $0.05 per diluted share in the third quarter of 2024. For the first 9 months of 2025, non-GAAP net income increased to $1.5 million or $0.39 per diluted share compared to a non-GAAP loss of $78,000 or $0.02 per diluted share during the first 9 months of 2024.

We ended the quarter with $3.3 million of cash on hand. However, this was negatively impacted by cash outflow from operating activities of $582,000 during the third quarter of 2025. This was primarily due to the payment of over $1.1 million in taxes, primarily related to the gain on the sale of the compliance business. Cash generated by operating activities was $1.5 million during the third quarter of 2024, where this includes cash generated from the compliance business.

For the first 9 months of 2025, cash flow generated by operating activities was $300,000 compared to $2.3 million during the first 9 months of 2024. Again, the year-to-date amount for 2025 includes over $1.5 million paid in taxes primarily related to the sale of the compliance business. Adjusted free cash flow was negative $418,000 for the third quarter of 2025 compared to $1.4 million for the third quarter of 2024. For the first 9 months of 2025 amounted to $799,000 compared to $1.9 million for the first 9 months of 2024.

I will now turn it back over to Brian, who will provide some updates on the business, customers, subscriptions, and volumes, along with everything else we have planned for the remainder of the year. Brian?

Thank you, Steve. Let me start by saying that the third quarter showed solid execution across the board. Our focus remains on strengthening the core, scaling reoccurring revenue, and driving product-led growth. But before I speak on our outlook for the remaining part of the year and into next year, I wanted to reflect on the last 9 months and what we've done to put the business in the best place for the future. We rebranded the business in January. We sold our legacy compliance business in February, thus reducing the debt by 83%, also reducing then our OpEx by 7%. We retooled our entire back-office systems and processes, increased our focus on subscription-first approach sales, also increased subscription business to approximately 50% of our revenue, and we've continued to innovate our technology application by introducing AI agents that analyze content in real time to further our commitments to both miss and disinformation.

As most of you know, we're a lean business. And in reflection, this is an amazing amount of work to accomplish in 9 months, as well as continue to grow minimally and improve operating results. All that said, we know the growth is key to our long-term business and are poised to do this in 2026. Customer counts and subscriptions at the beginning of the year were guided to achieve 1,500, and I want to talk about that for a minute. But when you consider that when we disposed of the compliance business, we did actually lose 300 subscription customers from that sale. So that puts us in a correctly guided number of approximately 1,200 for our communications go-forward business. Today, we ended Q3 with 972, and we know that this number is aggressive to hit the target. But so long as we see continued ARR improvement and enhanced retention with overall growth, we're setting ourselves up next year for an explosive year both in ARR contribution and strong subscriber numbers.

Here's how we're going to get there, both in our internal initiatives of what we call trade up and trade in over the last couple of quarters we've spoken about. First, trade up. We have a significantly planned product upgrades that include advancements to our monitoring and delivery system that will include real-time results from over 30 social media platforms, the mentions, the value and sentiment and the impact of your brands as well as connectivity to one of the world's largest social media management platforms that allows users to schedule, publish and analyze content across multiple social networks from a single dashboard.

Combining this at year-end and into our AI PR platform, we will see lift in our ARR and provide further value to our customers. Second is the trade-in. As we expand our product offerings, we will benefit from being able to attract a larger total addressable market as enterprise customers and scale-up brands are craving an all-in-one platform that delivers all the tools needed to tell, manage, and monitor their brand. Also, with the advancements of our # kill the report strategy, we are going to be addressing one of the biggest issues in the PR market, and that's the distribution report. The industry is full of implied metrics and results that leave many brands wondering where the actual value is. We think it is time to open this up even more and put the data in the hands of the customers by simple prompts that will alert you in real time. From there, you can build a point-in-time report that delivers that executable document to you. So very soon, we will let the old school distribution report rest in peace.

We have also been busy this past quarter building a vertical we believe can be a contributor to the long-term future of our business. Adding this in the third quarter, we call it the EDU program, a class curriculum component of our ACE PR platform, where students and academics can use our PR writing platform, media database monitoring and pitching tool, and a class real-life simulation at no cost. Our giveback to the next generation enhances the skill development with leading applications that will prepare them for the workforce, understand the storytelling process, and improve what AI can do for them in their careers. We look forward to these students graduating and taking the ACE PR platform with them in their first career job.

Also, just in Q3, we were awarded something that we feel very special about, and it's called the abatement study. And I want to read a quote from that press release. As one of the most rewarding and challenging programs PRSSA offers, the abatement allows students to gain hands-on experience with real clients while sharpening their research strategy and execution skills, said Jeneen Garcia, Chief Programs Officer at PRSA. So what we'll see is 100 colleges and thousands of students that will be challenging their undergraduate public relations students across the country to create comprehensive campaigns for a real-world client, us. This year's participating teams will develop strategic and creative solutions designed to build awareness and engagement for ACCESS Newswire with a focus on showcasing how the company continues to support and elevate communications industry.

We look forward to judging the competition and early next year, announcing the winners and results of that program.

Back to the remaining part of this year and looking forward, revenue trends and ARR growth. Sequential revenue growth and improved profitability show that our strategy is working. ARR continues to rise, and we expand our subscription base and enhance the average value per customer. We expect to see continued improvement throughout the rest of the year, driving new product releases and deeper customer engagement. Our ARR per employee, one of our key internal performance metrics, continues to trend upwards. Operational efficiencies, automation, and the divestiture of our compliance business have allowed us to generate more reoccurring revenue per full-time employee. This metric demonstrates the scalability of our model and positions us well to meet our long-term profitability goals.

Subscriptions and platform expansion. We're on track with our goals of transitioning the business to a majority subscription model. The number of subscription customers increased again this quarter, and the average ARR per subscriber is now exceeds $11,650, a strong indicator of product adoption and retention. Our focus remains on customer stickiness, ensuring that as we grow, our customers stay with us longer and adopt more of our platform capabilities. We are also advancing our AI-driven automation initiatives that began earlier this year. Our internal editorial validation system is now fully deployed, saving approximately 5% of the editorial time per release. By the end of this year, we'll roll out our customer-facing version, which is expected to further reduce our editorial efforts by an additional 5% and enhance content quality and consistency.

Additionally, we remain on track to launch key social media integrations with leading management platforms before the end of this year, expanding how customers can distribute and measure their news across channels in real time. And lastly, like I just mentioned earlier, the # kill the report, it is on track to offer a robust agentic agent AI-based real-time prompting and alerting system to our customers.

So to summarize, we are executing against the plan and achieving measurable improvement each quarter. Our ARR per employee and per subscriber continues to rise. Our operational expenses remain well-managed, supporting long-term margin expansion. And our innovation, particularly around automation and integrated reporting, will drive our future growth and differentiation. Looking ahead for the remaining part of the quarter and into next year, our focus is very clear: continue expanding subscription revenue and reoccurring ARR, drive gross margin efficiency while maintaining quality, deliver new product capabilities that enhance the customer experience, preserve cost discipline while supporting our growth initiatives. We expect continued sequential improvement in both revenue and adjusted EBITDA in the fourth quarter. ACCESS is becoming a stronger, more predictable, and more profitable business. We have said we would do this, and we are. Now it's time to grow the top line in 2026 and beyond.

With that, I'll turn the call over to the operator for the question-and-answer session. Thank you.

[Operator Instructions] Our first question is coming from Jacob Stephan with Lake Street Capital.

Congrats on a nice quarter here. First, to start off, I just want to get some additional color on the nice sequential growth we saw in subscription ARR. I think you guys had said that previously, contracts were coming on at about $14,000. Is that still the case? Or has that changed at all?

No. Yes. I think the end of Q3, we were about 13,000 and change. So we're just slightly off Q2's numbers, but we're still trending in the right direction overall when we look at total ARR.

And so just to kind of contrast your comments here, you kind of said that $1,200 for subscription customers was an aggressive goal for this year. But did I hear you correct? That's where you expect to be next year at this point? Is that 1,200?

No. Yes. No, Jacob, that's a good point, right? And what we were talking about in our prepared remarks, last year, when we guided to the 1,500 number, as I said earlier, we were not giving away for the number of compliance subscriptions. And so when we do retract those to kind of restate the numbers, it would ultimately look like about approximately 1,200 is what the target would be. We feel like we're going to be slightly short of that 1,200 number, although we feel like our retention and our average ARR is going to continue to climb. And so long as we see those numbers, we're not concerned about the business seeing that 1,200 number by the end of the year. But I'd expect that into next year, this time next year, you're going to be well north of 1,500 to 1,600 subscription customers on our focused communications platform. So yes, not 1,200, but higher than those numbers.

And then maybe just touching on gross margin a little bit. It did come in below 75%, a little softer in the quarter than, I guess, we had anticipated. Was there anything one-time in the quarter that impacted that? Or maybe how do you think about it going forward?

Yes. I think, Jacob, we did deliver gross margins at 75% for Q3. And I think we'll see some expansion there. I think what's important to point out, and I think Steve called it out in some of his prepared remarks, is that we've incurred additional distribution costs and other infrastructure costs to scale our operations. Even with that, we've still been able to maintain our gross margins. And so evidence of our commitment to do that is what we've talked about in the last couple of quarters about using some internal AI automations to help our editors be more efficient, and we're saving that time there with them, which is also helping us. So I feel confident that gross margins are kind of at a bottom-end level, about the 75% and are going to climb next year.

Obviously, what's important to that is scale, right? And we see the industry making a lot of changes in ownership, the industry making a lot of changes in volume. LLMs are now coming out saying that PR and blog content are one of the most important things that companies can have so that they're indexed and thought about from AEO and GEO kind of perceptives of queries on LLMs and searches. So we expect to see growth in the news industry next year by volume. And so that our top line grows, we'll see gross margins also grow. But yes, Q3 did end up at 75%.

And I'm certainly not suggesting that 75% gross margins is short or not good, but maybe just one last one for me then. So as you kind of look at 2026 and how you think about the overall market, what -- I guess, maybe if you can group it into like IPO candidates, maybe existing public companies, and maybe even like existing customers for add-on sales. How do you expect kind of the 3 buckets? Where do you expect the majority of the growth to come from?

Yes. And we're using these words externally as well as internally in our trade-up, trade-in, trade-up strategy. And when we think about the trade-up, we're doing really good at large enterprise brands coming in, subscribing to part of our platform, and expanding quickly. And if I just look back over the last, call it, year, almost every one of them has come to us to buy an Investor Relations platform or an earnings call platform subscription or a PR platform, and it has bought the other 2 over the period.

In my opening remarks, we talked about a company called Firmi America. They bought everything. They're a fantastic organization. It's just a new IPO. So we get our share of that space, and we're doing well there. And so the example of Firmi really is probably a trade-in, right? They were looking at other options. They had NASDAQ subsidy. To be honest with you, they could have gone, but they chose the best of breed, and that was us to deliver on what they're looking for. So we'll get a small percentage of the IPO market as we always have. We're continuing to get a larger percentage of the enterprise business, which is great for us. To be honest, the rebrand of our business this year has made that a tremendous success for us in winning those customers. But by vast majority, because we kind of look at the market longer term, we need to be fueling growth underneath to be able to drive both kind of the scale-up new brands as well as the enterprise brands.

And so to kind of agnostify ourselves about public and private, -- we really want to look at where are the bigger opportunities for us to scale customer growth and scale subscription growth. And we've got a lot of plans in the works for next year that we'll talk about in our year-end call, some of the things that we've got done and signed that will be released in January, that we'll wait until then to talk about, that's going to give us a significant opportunity for growth coming into next year and beyond. But we still feel confident that we're a viable option and a strong leader in the enterprise space and a strong leader in the IPO space. And I think we probably had more net wins in our PR/IR platforms than anyone else in the market in this last quarter. So we feel good about that.

[Operator Instructions] We have had another question coming from Luke Horton with Northland Capital Markets.

But congrats on the quarter. Brian, could you just talk a little bit about industry volumes across the press release industry, kind of how that trended for the quarter, and then what you've seen so far here in October and into November?

Yes. That's a great question. And so this may take me a few minutes to answer. And so as I begin kind of the response to you, Luke, I'm going to pull something up because I want to be sure that I'm being very articulate for our audience and our shareholders to understand. For the better part of the last 8 years, we have, as a business, have gone from no percentage of market to 20% of market and news volumes. And when we used to obtain research independently in the market that Affirm no longer does, it indicated that the industry was growing at about a 4% to 6% CAGR over the last 5 years absent of this year.

And so when we looked back at the last 2 years, and this goes to kind of the 4 main newswires in the market, us being one of them, we saw the largest -- I'm going to leave their names out of this, just to be fair to them. The largest news provider dropped market share from 34% to 27% in mid-2023 to Q3 2025. Another one dropped from 32% to 26% -- and at the same time, volumes in the market went from 8% to almost 20% for us. So we're seeing the industry slow down in their contribution to market share, and we're continuing to grow. And by estimates, when we look at the year-to-date, we're continuing to see the same trend. We grew a couple of percent. Everybody shrunk a couple of percent. And so that is the historical viewpoint. And so that's good for us. If you're outpacing the industry, that's great. But to be fair, we've got to get outside of the industry to drive growth, whereas we feel that the rest of the folks in our industry are not doing; they're doing the same thing over and over again, and we've got a clear strategy for next year on what we're going to do to address that.

And that's adding some of the components we talked about, the social change in the reporting metrics, and being very dynamic in real time there. But lastly, the other part of it is, I think the hope for the industry as a whole, and will benefit significantly from this, is what AI is doing to content that needs to be run through LLMs. And they're using it for brand credibility. They're using it for industry knowledge and research. And the 2 fundamental points that every LLM is saying is press releases and blog content are the 2 driving factors. So we spent a good amount of time in what the new SEO, PPC world is calling GEO and AEO to index releases that are being contributed, and we're one of the top newswires now contributing content to these platforms for all of our customers.

And so we think that's going to lead to more volume in the industry, but it also gives us the competitive advantage to push ahead faster than everybody because folks are going to rely upon us for that AI query content. So hopefully, Luke, that helps with a lot of data. Happy to unpack some of that, if you'd like.

No, for sure. I appreciate the perspective there and kind of the background on how that's trended over the last couple of years. You guys did mention some cost savings with the sublease of a corporate office, potentially $300,000 a year in cost savings. Are there any more kind of cost synergies throughout the business or any more costs that you're kind of looking to rightsize here now that you've sold the compliance business, rebranded under the ACCESS Newswire brand? Just how are you thinking about the cost structure now versus maybe a year ago?

Yes. Look, I think we've done a really good job in the last 6 to 9 months of pulling down the OpEx, as we said we would. The lease was never modeled into our assumptions of future cost savings because you just don't know what you don't know on commercial real estate. I think we're really there now to enter into the sublet here beginning in January. So you'll see that, as Steve mentioned, the $300,000 in annual savings that will come over the next 2 years and the lease ends, I think, at the end of 2027, give or take a month at the end there.

We may see some other small inconsequential savings to be fair. A lot of it coming from our infrastructure as it relates to the delivery of our applications. consolidating into different platforms and cloud-based systems that we may see some benefactor. Our webcast platforms went through significant upgrades over the past quarter or so that's also yielding some savings that we'll see. I don't want to give a percentage for guidance, but I'd say you're probably going to see another $30,000 to $50,000 a quarter in additional savings.

But I think, again, to us, it's such a nominal amount. I'd rather reinvest that for growth, that message that we're going to continue to drive down OpEx. We've got to deliver on our platform. We have to deliver on a customer-first approach and continue to be that marquee provider for our customers. And although generating cash is a beautiful thing, we need to grow. And I think that's the most important thing for us.

And then could you also just kind of talk about how has the marketing strategy changed since the sale of compliance and the rebranding either between just kind of the sales-led growth or product-led growth here as of late, I guess?

Yes. It's a consolidated message. And we struggled for a couple of years prior to rebranding being the public company. And that's an honorable thing. We started our business there, and we'll never forget what Issuer Direct was able to afford us to get to where we are today. But as we look at our client numbers, the majority of our customers for the better part of the last 5 years have been private enterprise. And it is difficult to go into them underlying contracts with Issuer Direct and ACCESS Wire, and Newswire, and Direct Transfer, and all these other names that we had. We needed to slim down the business, or I guess the basketball term is go small to get big, right? And so we had to do this. We wanted to do this for a couple of years. A lot of our shareholders knew that. So today, our teams go to market as a consolidated business unit that's focused on communications, brand building and storytelling, and monitoring under the AI name.

And it's a cleaner story to tell. It's an easier product solution to sell. It has not disrupted our public company customers. We haven't lost public company customers as a result of doing this. Our brand is stronger than ever. When we did market research before rebrand and post rebrand, we generate more traffic to our platforms. We generate more traffic to our customers' news articles. We generate more engagement than we ever have in 18 years prior to doing this. So the rebrand has been a very good thing for our business. It has matured us significantly and an external view of who we are and what we do. Strategically, ACCESS Newswire is the name. And probably over the next year, people will know us as ACCESS. And that is going to be a deliberate attempt to what we're trying to accomplish here from our public relations and Investor Relations platform.

So to be fair, we couldn't be happier about it and continue to push the theme that our marketing department has come up with of we love you more, and we're going to service our customers regardless of how much AI is in the industry; it's always a human touch, and we're going to do that.

As we have no further questions in the queue at this time, I would like to turn the call back over to Mr. Balbirnie for any closing remarks.

Ali, thank you. Smashing job as always, sir. Thank you again to our shareholders and everyone else that joined the call today to listen to us talk about the progress we're making here in 2025 and where we're headed into the end of the year and into next year. We appreciate our shareholders, our partners, our customers, and their continued trust and support, and we look forward to updating you again next quarter. Have a good Veterans Day. Thank you, everybody.

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation. Thanks.