- Earnings call transcript Q3 2022

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Operator

Thank you for standing by, and welcome to the Issuer Direct Corporation Third Quarter 2022 Earnings Conference Call. Today's call will be conducted by the company's Founder and Chief Executive Officer, Brian Balbirnie; and its Chief Financial Officer, Tim Pitoniak.

Before I turn the call over to Mr. Brian Balbirnie, I'd like to read you the company's abbreviated safe harbor statements. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial positions, markets, economic conditions, product releases, partnerships and any other statements that may be construed as a prediction of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. be the also will results discussed call. on Non-GAAP of provides ongoing useful company only. and believes data information presentation the purposes informational company's The supplementary non-GAAP concerning provided for is operations the that With Mr. said, Balbirnie?

Brian Balbirnie

us is good recent we in time And transaction need recognize third and we for the operator. But you, day to today results. a for talking afternoon, intend impacts about discuss of business, Today Thank to store XXXX that the special thank to years. everyone, you Newswire, cover the what's quarterly joining a results. your of quarter good I spend it the company's how in bit and for us. coming us

resulting drive X% hard in we worked While prior-year. improvements in margin year-over-year, a was revenue total the expected, third decrease to in XX% quarter the from to XX% we less than

revenue We and bigger to periods our growth the because three of prior also and X% compared the outpace saw Newswires the the multi-year grew deferred bookings market quarter. over to continues grow to ACCESSWIRE the over in remains success incremental strong in contracts. compared prior-year

cash of purchase I M&A, qualities and I and finding us plan. his prepared relations quarter, shares, greater and of entire as said to capital media monitoring advanced previously said, about it database, repurchased growth and XX,XXX to quarter, past, growth, Tim period, With well think used investor repurchase operating and specifically offerings focused the turn on from was technologies early to analytics, complementary months. drive to space. cover products communication Moreover, as retired illustrated social news relations not as first team public complementary products, strategic lot and it flow wanted remaining the The to had always utilize accretive cash only completed media these press media our drive release have scale we're When prior be repurchase operations Today's strategic business. items. help completing stated, allocation transformational for members long-term demonstrate leverage. need the we part to our the for plan the be our our There's to in gives are we or in in to a the a but we the next us flows and that These shares. and capital on Before The when this that continue can't and and in be integrated about. meets the years we possible. the remarks call our not acquisition strategy couple just capital announced also important program has over announcement repurchase of was wait of new over raised in to talk requirements, and couple get excited. to Newswire We distribution beyond further customers rooms, clearly

So Tim. over I'll the turn call to

and high the we greater discuss can So in go third Tim? quarter can through Newswire level detail, a he at then

Tim Pitoniak

primarily while were levels margin overall ACCESSWIRE increasing XX%. the news gross over X% results contributing of driven quarterly mentioned, by our gross prior-year, enabling just and Brian As maintain to margins our us increased brand,

revenues third XXXX. of of a from XXXX, QX During achieved quarter we the decrease $X.X in quarterly of million $X.X X% million,

both our certain from revenue delay total as virtual well our specifically the in was primarily the communication for as revenue to of The the compared demand X% the XXXX. X% once increased For million, events, million XXXX. quarter pushed XXXX period of million and XXXX. September was the same by communications products, first first of revenue months months the ended for to XXXX, compliance $X.X The revenue quarter $XX.X over driven again revenue period. increased increases nine event or and less in which in stream, Communication by nine in business the total period of the XX% ACCESSWIRE, increase prior-year. of the our same $XX.X nine increase a webcasting decrease during was months due to increase The fourth XX was which of into for due driven

of We business products. revenue previously in and events also increased were due mentioned. revenues and from Relations feeds to event increases by website news lower had our webcasting declines our and Investor from demand These offset delay I

also the third was revenue. of Revenue quarter third In X% for the XX ended September quarter first remain same ended XX% the year-to-date our larger months increase agent compared in to during compliance from XXXX. basis. due XXXX, XXXX, revenue to Due both subscription increased three communication XXXX, fulfillment and the of on September periods of primarily continues to nine XXXX. in is revenue The transactions months the to of period. total and a and revenue revenue our due to XX business the business XX% For the business XX% nine an service however, XX% communication from prior-year, lower respectively. Revenue for total accounted of months from for transfer proxy our increase of service increased fees, the

from disclosure service XX declines well proxy as attrition. as and September partially also in increase For customer and legacy service due the services the nine business was print revenue, software XXXX, fulfillment revenue to months our of business our by offset ended in ARS

the overall period the margin points our during P&L, and compared as last revenue year. improved nine first a ACCESSWIRE revenue. and partially margin and the to XX% in basis communication for one and QX timing by both Gross of decreased driven months the a our percentage from of XX% point prior-year. periods XX revenue percentage percentage offset primarily XXX margin event increase of for QX to for the ended business XXX XXXX points gross same months Gross XXXX of XX% and compared basis communication the nine percentage XXXX an webcasting September from of was three same total down of Moving of percentage decline by in to period,

our communication margin due nine eight first our increased by the revenue. total ended partially fully in of business compliance revenue of percentage communication prior-year. offset the points from percentage disclosure point months related to the increase September the business. increased our three ended capitalized amortization by primarily service for three Gross nine For periods to with business costs with proxy three XXXX lower the higher percentage coupled lower fulfillment and costs for of associated to the months increases XXXX, percentage compared points amortized is XX margin costs, same September of XX driven now These were a percentage an with months ACCESSWIRE as which teleconferencing software, percentage print XXXX the gross associated and

to XXXX. on for operating posted of QX operating compared to Continued during $XXX,XXX of QX We million income a of income. XXXX, $X

nine The due million, is Newswire recruiting nine to and XXXX, quarter of partially decrease is costs the the for first our was months operating third million, X% $X per or the expenses million current XXXX. the capitalized $X.X the income on offset The stock months the and XXXX X% the per the income decreased The Net XX of increase of a fewer in first the diligence to system $X costs XXXX, by headcount, compared is for diluted XX diluted compared $X.XX related primarily the team quarter per XXXX. months enhancements, first and we the cost compared for to XXXX net decrease increased in of increased associated increase income generated development associated costs lower to increased was same XXXX related net and newsroom The marketing fees, XX% first advertising, XX% Net the earnings by of offset months to with to sales use of months million, the the employee of nine Sales of or however, for nine a product. included acquisition for QX in expense, decrease income marketing, months development first the for with in due XX% XXXX. of $X.XX development $X.XX to to in nine partially CARES $XXX,XXX decreased diluted earlier under share the XXXX commission diluted for Product ended digital the today. headcount, the of and for compensation, to benefit the QX marketing during costs of September acquisition. September ended XXXX of for with nine to million to primarily period consultants months expense. of investment first nine compared ended September one-time prior-year months or a On and prior-year. to XXXX, nine partially $X.X quarter in announced diluted during credit the by in share same projects due three income the share or digital prior-year, for XXXX G&A and increase related the our retention the year, operating the commission due $X.XX $X For $XXX,XXX an corporate GAAP of compared the share periods the is of in increase our an XX% during basis, nine in of due XX compared offset advertising of for share, per decrease during SG&A to income marketing filing initiatives, months of per XXXX. expansion Act. increase a anticipation spend. and three and the to and

metrics, during or of or of some to quarter EBITDA revenue revenue of XXXX. QX for compared XX% the third $XXX,XXX $X.X XXXX at non-GAAP Looking million was XX% of

of nine was of nine XX% the $X.X of of $X.X the or to months For XX% XXXX, revenue compared during first first months million or million XXXX. EBITDA revenue

CARES with respectively, or or XXth September increases million ended per As the diluted $XXX,XXX, the one-time and compared share $XXX,XXX to of included $XX,XXX for costs months of $XXX,XXX but respectively. QX $XX,XXX to as diligence benefit associated retention credit net during $X.XX the three was ended XXXX noted QX as of acquisition, the included XXXX XXXX. the diluted and dollars Non-GAAP for for a XXth XXXX share filing of Newswire nine stock $XX,XXX in months related and of earlier, well of per the income three Act. due $X.XX EBITDA employee EBITDA September compensation nine under for a and expense

to $X.XX nine per during over period cash non-GAAP $X.X share to the of sheet the net or of For the per diluted $X.XX or balance million Switching statement. compared first million flow share, to income XXXX, months XXXX. increased diluted $X.X and the same

$X.X to and XXXX, on balance, I as dollars new of the most an million nine the increase to business, $X.X year. flow will This the over $X statement, months consecutive And marks from of to Brian of million the cash XXst we have revenue first will remainder products call flow importantly, is compared in the of of deferred expect updates increased provide next quarter some our operations X.X the and million company. XX%. September everything XXXX which of recognize the now for planned to who transaction. cash to turn of months, primarily December the Our prior was else positive of million for XXth back flow the year, revenue newsletter as compared XX our Brian? discussed XXst XXXX cash the we for the

Brian Balbirnie

Tim. you, Thank

and for revenues quarter-to-quarter. The period top-line challenging third a business from our experience webcasting From see to shifts we from quarter perspective, teams. a events continue our was

customers as our approximately quarterly our grown that and business believe strong will remain continue calls Turning is QX from was in period-to-period. this from the period. said our is our core pushed QX. the to in doing shifts $XXX,XXX for With strategy. product has for encouraging experience to do events resulted These in We a results earnings which fact webcasting shifts that period, revenue and

from We're volumes the continue year. But volume further and the and half press Additionally, for us. delivered. we to We environments our macroeconomic tied were quarter quarter achieving XX% growth was firmly organization of consider historical release has that growth the first the customers wide to privates to our for and release not about value in drive directly Once revenues our the in in our of and to basis. takeaway for able impact on grow back share prior returned way customers distribution counts quarters, The by larger price the market increasing X% previously did about can standalone when have products. a our directly to directly to to the this talked market A quarter. that as key contracts not Newswire attributable from sales the our quarter. Far volume the volume X%. to release and press and average double-digit just we reduction double-digit have believe customer release we take in industry been by slowed work prepaid, more business, for we're And well was work that customers for able year-over-year This our of our the you have our press portion the in decrease previously. per price come over we'd active customers spoke period. Like the that continue the expand specifically share prior business. perform over any on who

This appearing in the the we'll about work. in know, not did not talk X,XXX about As customers, X,XXX customers from with in quarter just a previously we that spoke second. counts XXX any Therefore, perform the we in including they do the those count additional an ended not customers you period. customer prior the as XXX resulted not

control, quarter result did a products. business, difficult Conversely, as subscribing slightly in did see up predict direct subscription decrease webcasting customer company the events beyond many to the customers for our this our of XXX In we finished from XX% by customers well. As public the period and area X%. XXX to grow we business to being in our ways counts and

approximately communications quarter. XX% one-third to Additionally, the a overall they approximately on to customer revenues Further, quarter subscribers, revenues for the per total also drive for the X,XXX continued our X%. revenues our of we accounted accounted revenue business have by this about for X,XXX press release ACCESSWIRE of standalone from last XXX average up for accounted now, for year basis. XX% sequentially quarter. our approximately of Of

business to to on discuss peer discuss want our we compared look move how our I I group. Before to Newswire, at

and clarity. of consecutive For and tracks six products continuing services generated still and fellow of QX has area our align in XX This and compliance data sells years. companies several the specifically, and are companies communications the only More positive the are positive that flows a meltwater we These operations. being flow listed of a group develops, company. really for that streak last quarters cash EQs markets focus our companies cash one from on XX of

opinions about we becoming transform how margins, our group as balance to us on this of and to gears of and shift strength. Newswire capital also PR allocation want when very much in to top comes to business are into space. We the At a sheet leader speak it's IR strategy communication it point, our help and our market like in going ahead I'd the

others brands businesses their the and $XX.X distribution individually the XX% Most GAAP media like the sold pace newswire.com, over XX,XXX management The on level that Newswire a the and approximately growing share everyone team their and with entrepreneurial establish First, business the over of know to a database.com that market. I as in in increase want customers one to and serving that year strategy have premier for is to I of XX has of to revenues us extend in brands comprise Newswire, to year. welcome of an years its part year XXXX. for this passion a who impressive similar been of very press executing the delivered personally release.com, the in release has spirits Kudos warm gotten press is members bundle by XXXX to the have the business today, helped you. in company or history. many each and that million on basis a several

of strategist, year, provides and Additionally, media outlines a of media year, have subscription. acquisition end release and one news months year that adding we're an Also, products and/or customers through and employees. continues the accounted our last By plan subscription great the entire that months advantage year, and into our to customer the distribution of on metric. the headway we newsrooms, like and products, acquisition aspire should an like analytics short. from where map company we prior XXXX. market systems I This This will XX% distribution in news XX database earned said communications very media in for like and customers we have excited a for strategy having The an greater is cash the crucial this the strategy. prior made launched recently calendar us of six media have had basis, map meet Advantage first analytic accelerated the to for market this year. they media being believe or share annualized both product database which we have would And the been this end builds and of revenue a they market X% communication introducing XX% flows get in that increase media But share. previously. deliver about. quarters, long-term we to a overall we the it spoken lastly, map without great single I increase Adding the to last this generate to press about the approximately to still addresses Point date said of brand gets revenue us said Newswire have also achieve of our revenues shareholders, faster, metric opportunity is it, gives were a Adding to us product XXXX proprietary earnings our by new we and plan scale that meaningful per there. pace target felt on

have will customers office business driving with the XXX% Esposito together. Joe demonstrated been ever CEO of of company's natural critical we to the that we've done continue the align we person customer lineups and are is business memories why be communication past transactions to that to and NRA accretive the combined the sales offices release years, ability count the to Thank by to transactions infrastructure. now integration XX services back most roles marketing and us in Joe purest And to of distribution product has of that The all result no one and know, Press savings increase has Like members transform organizations company business a XX% and know in joined you with us different. get where who people last leadership serve and combination today. and company with build Also in funnels, combination cost a us over taking The key has amazing expanded he We agreed XX about team will key under positioning strategic countries. his have and this in in we're X,XXX a to distribution the to a result everyone is costs done. our reason three direction. worked the remarkable significant brand member is grown of of and one we'd the months. The will valuable as and proven as expect headed. will has over talk the staying love systems you both team. result that management

and of with to please spend our employees headed. where happy Operator, move to we're going call. been equally time portion the Q&A next that we're our for to Newswire something are disciplined some to We what's locations achieve. and And we Once begin today's discuss acquisition you call, the have further the with conclude can us. we share we announcement

Operator

Mike is questions. Securities. Grondahl from live. first open And now question Certainly. the for The floor line [Operator is Mike your is coming Northland from Instructions].

Mike Grondahl

Brian XX% confirm I did revenues hear Hey, million I did And $XX.X grew hear you in Can of thanks Newswire And that Did that first? in it 'XX. you say 'XX. guys. right?

Brian Balbirnie

Mike. That's That's correct, Yes. correct.

Mike Grondahl

XX%. acquired And would growth the of company? the think of XX% rate the growth you characterize we the you know, should business as about rate How

Brian Balbirnie

we've the should rate and for absent brands worst at Newswire this case, and had very growth of thing most has quarter have Yes, good XX%. ACCESSWIRE to the high has growth, put And what it at basis. it's XXs. transaction combined the and important them And probably qualities take we year-over-year look in is have historically, I on think this The a been together. of attributes been

to believe we'll do Newswire And a so we at forward. on growth going really XX% see combined operation that business XX% our

Mike Grondahl

margin that it business? got Is of roughly how XX% plus you EBITDA it, about the profile similar would What the characterize Got it. margin, the to margin?

Brian Balbirnie

the are is good Joe, good of a revenues very Newswire, things everyone's loved Yes allocation business. margins, they important. team and steward EBITDA operating done are the great and being very, and that that's Eric, a the But with about and gross job line generating Growing very and we one that of every capital and us similar. attribute right. in

Mike Grondahl

how didn't Got X-K. in press of for paying in it? it, think though you release, how great. it you're might I Can I be the much funding see sort about the you're talk And Newswire?

Brian Balbirnie

total That's million. absolutely. $XX.X a transaction question, great up value Yes, the ends at

component And was components. The equal issued smaller the into so totals three XXX,XXX shares. common shares of about of outstanding, X.XX% ISDR and it's of which issuance up an to broken

cash million interest. The X% $XX second is seller's sellers $XX note and closing, is million one paid a essentially that component note, at of year of

are that of those drivers three components the total transaction. the So are

Mike Grondahl

it. Got

I million cash. almost press you release, million I hey, $XX think and So in $XX.X had just your saw in like,

million $XX and sellers your you'll in have cash will to fund other this, there. then go So out note

Brian Balbirnie

as our and Direct everybody shareholders, and look, many at well here. looked positive That's generate flow this how operations, as good we of you from has years cash correct. Issuer know cash Yes for,

to us the on left. cash confident in the than commitment, round, to being to combined was more that important everybody. cash on utilize And an We're the of operating a position we that raised make the continue in past current equity to so business

as them, have have line However, credit with we a that, facility of to to continued facility, it's bank us. available with said, we a that a we've have

strategies additional quicker capital next access we well other do into and continue to allocation if as to as in year. we that think opportunities about see execute that, growth, we've got to to So

Mike Grondahl

Got it it. you says it's I first I exactly mean, lastly, full after the could And press if quarter quarter, the close, that just by maybe, then in release, March the in maybe, think think do you what would be accretive which that?

Brian Balbirnie

the that there's we're think to I on be add transaction revenue to in of going look going We're going business, to months revenue two some related nicely, to that to Yes, help. QX, costs it absolutely fall see right? here going is

meaning see I think going you're where the that. let me restate biggest to benefit,

I transaction going the to a this think result power you're in coming the months you're the to QX. see of an additional EBITDA three quarter, power of going of full two as given see in that

the So benefits I But immediately to fair in that QX. it's it's going see almost accretive. it think to you're to say full

Mike Grondahl

Sure, costs in to call any quarters? December one-time out September

Brian Balbirnie

small there? was wasn't amount Tim, there a

Tim Pitoniak

yes, were the quarter. There for was XX about total in year-date XX,XXX

Mike Grondahl

could [indiscernible]. barely I hear

Tim Pitoniak

On then $XX,XXX XX quarter the and for year-to-date.

Mike Grondahl

or mentioned Got new to sort on small. side? anything it, or should acquisition? product products You synergies yes, I that's Well, call bugging on out me of the the the about front cost pretty be else, anything new on

Tim Pitoniak

Yes, I systems facilities, a through insurances, prepared duplication, as the we but are be there talked part. of some first able area we've immediate integration clear beginning tomorrow. as that the going the very going got a mean savings remarks, to the here teams go obvious to have Right. the That's we're There's that in back little office right. here bit about there's things there be cost to

us benefiting on gross part opportunities coming to distribution. into to levels increase The be us is next quickly. margin distribution We're for the second here see of QX to year, very going that there's going

well, there to back us sticking I us think important and coming customers, the to and brands. loving the in, and these want most best keep folks our we for is first, love combined to integrate do settle

M&A conversely, or additional it know, from and think about and looked initiative of everybody, our analytics we communication other build products complementary talked the looked the the Newswire, that, did products. an we've beginnings it us IR they last database to PR couple in we world benefit of the significant needed built us do the they've they news great in that Obviously, gives distribution that with amount our the into volume other and We at these database that got of to the part as is is to strength ecosystem. plan, us they've been has of product. Direct it able before. this felt the for year the we've Advantage and analytics, Media PR products like that I our Mike we newsroom standpoint. that like been to media ACCESSWIRE Media an to When and market, with got had these the do publicly, at which to bring take a question, Issuer We've never you buy customers,

I so significant. to think that's from a be product going perspective, And

the and I that way, think event there'll have be products use webcasting majority other wire other we could very smaller customers products, benefits, may of reverse the private services. meaning some that be very, interesting the to

excited advantage to where opportunities year. ecosystem. folks. EO. where business next really our the We're we're decision And offer a into even the time the the know, with amount important. to really today, the further. immediate spend combination hall telling that's is the is a about we're to increase takes really plan and And to it unlock us that's talking good per to C hall and what interesting story we're the building We're most it's think down CFO, And the as in I opportunity those CXO, the to a down right? the is folks This So makers. revenue are comm real And get to additional marketing map brings has parts of going value life customer and of suite, those

Mike Grondahl

Tim. color the thanks for and Brian congratulations, Well, Great. and all

Brian Balbirnie

Mike. you, Thank

Operator

Securities. live. Horton Luke, [Operator Northland Luke question Thank the And you. from coming Instructions]. line next from is is your

Luke Horton

kind that could Hey, you pretty in some customer bigger acquisition. is is here public is customer or count the maybe go the similar that to any working from so now to combined if of you versus be profile I just just with companies companies, to what what of the with it was the would do wondering TR guys, and Newswire great? business anything around private addition give sounds on the Newswire is insight your going like look after guidance with smaller them double

Brian Balbirnie

the Newswire of are million have, question. customer of a look private say good them I Look, A XX% and I'd customers profile, XXX below. -- number that that's These companies. are

us this to is IRM there. ways, company powerhouse. that the suites So PR That's about communication the And customers, look to are as the you we tend of here customers, from very think interest right. When in side. nano start where focus for X,XXX some communications public microcap real X,XXX cap to size really at building them to similar this

grow there's no of from we're all, right. kind that together, additional and to business. the our the absolutely to public So overlap XXX continue the customer that doubt private take side and of the company be it. go to no bring company, back subscription of to to the business products company There's and We're at Newswire going to XXX size go going to able into with brands strength

you platform these Investor wire access So corner to that and and up folks we've that the getting turned of with and now going that continue several working clients platform right us. their like moving we doing Relations the and we've about can talked and into Insperity new the Corporate quarters Communications leverage system last to are what recent market, been most

take vice going versa, Joe base customer apply and and we're to there and apply doing do want of we're to his and what to things it to been able the do So take to team to and theirs. best has of continue those what our best the

that is Luke. helpful, So hope

Luke Horton

and just Then guys that's about compliance. of Yeah, pivoting announced ADA earlier ACA kind over quarter Appreciate very know to helpful. I in you the that. the

those acquisition that's Just We with effect that? on any wondering will separate. if or stays still just compliance the this if have Newswire

Brian Balbirnie

I development and newsrooms their over important the good ADA look, and No, that that ensure that parties. side for about we requirements teams we us. merge to interested that amount spent and to together to addressing We're those to our And a like passionately ACA time do. time going know is care of tech underlying the they have prospects, in this, compliance those Newswire and continue meet here shareholders customers

on there identified is, One And two parts there's think that that is in that. we've happen that. integration with our a I early already so plan needs definite And of discussions. to

of it business have our been average of go the ADA That core a increase. why benefactor investor into pointed subscription sales to solutions part relation continue U.S. ACA is our more Canada our is two prices able both of folks platform reasons amount our that in second and new one about here incorporate in The is good a we customers to and solutions is for the

all customers we be to of next able continues to these time it regulations benefit go and years, for that period a continue for. given in principles should as So us, as new adopt the several will

So it. I think there's two sides to

Luke Horton

the Okay, guys. great. that again Well, helps on And Congrats, the taking lot. thanks questions for acquisition. a

Brian Balbirnie

you, Thank Luke.

Operator

hand to other There I were you. no queue to would Brian now Thank questions in for like the this time. call closing remarks. at back Balbirnie

Brian Balbirnie

very Well, thank you much.

As always, employees shareholders, part and a interested I appreciate each parties of being for of this. our

of lot a we fun of We have heck it. here. doing do to a have lot a to going are And

of we in time and Now we're talk planned. members can entire that about that with more our new some details them spend and the team employee going to the transaction so go fill great wonderful all base to have our we Newswire

As do always, and a love to as answers for have questions the I much you are We'd QX night. available as Newswire great Thank and transaction. and quarterly and some both follow-up. all so results discuss and Tim well additional the

Operator

Thank you. Ladies does conference. conclude today's gentlemen, and this

time. for You Have may a day. lines your Thank disconnect wonderful your at you this participation.

ACCESS Newswire (ACCS) 6 Nov 222022 Q3 Earnings call transcript