National Research Corporation (NASDAQ:NRC) Q3 2023 Results Conference Call November 8, 2023 11:00 AM ET

Company Participants

Kevin Karas - CFO

Linda Stacy - VP, Finance

Conference Call Participants

Operator

Hello, everyone, and welcome to the National Research Corporation Third Quarter 2023 Earnings Call. My name is Charlie and I’ll be coordinating the call today. [Operator Instructions]

I’ll now hand over to our host, Kevin Karas, Chief Financial Officer, to begin. Kevin, please go ahead.

Kevin Karas

Thank you, Charlie, and welcome, everyone, to National Research Corporation’s 2023 Third Quarter Earnings Call. My name is Kevin Karas, the company’s CFO. And joining me today on the call is Linda Stacy, our Vice President of Finance. Before we continue, I would ask Linda to review conditions related to any forward-looking statements that may be made as a 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. This quarter was a good start on our plan to accelerate revenue growth and expand margins over the coming quarters. We’ve seen sales and margin improving sequentially the past 2 quarters with only partial implementation of the plan. I will cover 3 topics to set the stage for where we’re headed before Linda covers the financial metrics.

First, new sales. NRC Health is a leader in helping health care providers improve their patient experience on an individualized basis using decades of benchmarking and our unique ability to translate data into actionable advice. Our Human Understanding Program released in the second quarter of 2022 has become widely accepted in the market with 91 health care provider systems adopting human understanding 18% of which were from new logos.

Our contract value growth for the Human Understanding Program adoption by existing clients is averaging 13%, which is in line with the results we saw from the successful rollout of our real-time solution several years ago. And these results so far have been without the benefit of a fully developed sales force. To capitalize on the growing demand, the size of our sales force has been increased by 19% since the beginning of the year, and we expect to continue to add experienced personnel in this area. The expansion of sales and marketing resources has been successful in building our sales pipeline and producing 2 consecutive quarters of double-digit sales growth compared to prior year.