NRC Health Reports 5% Revenue Decline in Q1 2025, Appoints New CEO

National Research Corporation (NRC Health) reported its financial results for the first quarter of 2025, revealing a revenue of $33.6 million, a decrease of 5% from $35.3 million in the same period last year. The decline in revenue was primarily attributed to a $2.1 million drop in recurring revenue from existing clients, partially offset by a $353,000 increase from new clients. The company's operating income for the quarter was $8.6 million, down from $8.8 million in the prior year, while net income decreased to $5.8 million from $6.4 million, resulting in basic and diluted earnings per share of $0.25, compared to $0.27 in the previous year.

In terms of operational metrics, NRC Health's Total Recurring Contract Value (TRCV) fell to $134.4 million, a 4% decrease from $139.5 million a year earlier. The company noted that while TRCV had shown slight improvement in the fourth quarter of 2024, it remained lower compared to the first quarter of 2024. The retention rate of clients remained stable, but the company faced challenges in acquiring new contracts to offset losses. The filing indicated that the company is focused on expanding its product and service offerings to enhance sales and client retention.

NRC Health also announced strategic developments, including the appointment of Trent Green as the new Chief Executive Officer, effective June 1, 2025. Green brings over 25 years of healthcare leadership experience, having previously served as CEO of Amazon One Medical. His appointment is expected to drive the company's strategic direction and operational efficiency. The company has also been active in share repurchase activities, having repurchased 307,709 shares for $5 million during the quarter, and it has authorized a new stock repurchase program for up to 1 million shares.

Financially, NRC Health's total assets increased to $135.2 million as of March 31, 2025, compared to $132.5 million at the end of 2024. The company reported a working capital deficit of $17.4 million, slightly higher than the $16.3 million deficit at the end of the previous year. Cash and cash equivalents decreased to $2.5 million from $4.2 million, primarily due to share repurchases and increased borrowings on its revolving loan. The company’s long-term debt stood at $62.2 million, reflecting a new credit agreement established in February 2025, which includes a $30 million revolving credit facility and a $110 million delayed draw-down term facility.

Looking ahead, NRC Health anticipates that sustained growth in TRCV could lead to revenue growth in the coming quarters, although it remains cautious about market conditions and competition. The company plans to continue investing in innovative solutions to enhance client engagement and retention, while also managing costs effectively. The outlook remains contingent on the successful execution of its strategic initiatives and the overall economic environment impacting the healthcare sector.