National Research Corporation (NASDAQ:NRC) Q2 2023 Earnings Conference Call August 2, 2023 11:00 AM ET

Company Participants

Kevin Karas - Chief Financial Officer

Linda Stacy - Vice President, Finance

Operator

Hello and welcome to today’s National Research Corporation Second Quarter 2023 Earnings Call. My name is Bailey and I will be your moderator for today. [Operator Instructions] I’d now like to pass the conference over to Kevin Karas, Chief Financial Officer. Please go ahead.

Kevin Karas

Thank you, Bailey and welcome everyone to National Research Corporation’s 2023 second quarter earnings call. My name is Kevin Karas, the company’s CFO. And joining me on the call today is Linda Stacy, our Vice President of Finance. Before we continue, I’d like to ask Linda to review conditions related to any forward-looking statements that may be made as part of today’s call. Linda?

Linda Stacy

Thank you, Kevin. This conference call includes forward-looking statements related to the company that involve risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the facts that could affect the company’s future results, please see the company’s filings with the Securities and Exchange Commission.

With that, I’ll turn it back to you, Kevin.

Kevin Karas

Thanks, Linda. And again, welcome, everyone. Over the past several quarters, we have significantly expanded our sales force and marketing spend focused on supporting the rollout of our human understanding program. While it’s early days, the material expansion of sales and marketing resources has been very effective in building a stronger sales pipeline and in the second quarter of 2023, we gained momentum in converting opportunities which resulted in a 53% increase in new sales compared to the second quarter of 2022. Today, one-third of our human understanding program clients are from new logos with two-thirds representing adoption of the program from current partner organizations. Contract value growth for human understanding program adoption by existing clients has been 12%, which is in line with results from the successful rollout of our real-time solutions several years ago.

Let me turn the call back over to Linda to review our financial performance and then open the call for questions.

Linda Stacy

Thank you, Kevin. Revenue for the second quarter of 2023 decreased compared to the second quarter of 2022 by 3%, partially attributed to the closure of our Canadian operations and discontinuation of other non-core solutions. We ended the quarter with $146.6 million in TRCV, including a 1% increase in TRCV for our core solutions. Our TRCV metric represents the total revenue projected under all renewable contracts for their respective next annual renewal periods, assuming the upsells, downsells, price increases or cancellations measured as of the most recent quarter end.