Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Issuer Direct Corporation First Quarter 2023 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 statement.

I'd like to remind you that statements made during this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships and any other statement 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

Balbirnie? that With Mr. said,

Brian Balbirnie

you, today discuss us and for XXXX first to afternoon thank the and Thank you operator joining quarter company's results. good

during for am in market copy well of a our as with the closed the a ACCESSWIRE our after our quarter revenue quarter, for we issued results. business, acquisition. I driven growth press continued was to is the available today's release our first Just up as in today, by announcing pleased $X.X newsroom reference our call. results Total which million, Newswire XX%

quarter. the in detail We also drove margin call. improvement from will the later more Tim in XX% for to cover XX%

made highlight have lineups product something the We integration, in significant Tim's both after and prepared I some cost of new savings remaining XXXX, will part for progress, remarks.

to so the talk Tim? first There's cover a about quarter to turn lot I the over Tim today, more highlights. to call will

Tim Pitoniak

and afternoon, everyone. you, Brian, Thank good

XXXX is mentioned, business. start, a to sides of Brian As the driven by good both off

most growth press distribution along some quarter. of in of achieved the However, by we release during cash Newswire, we margins first with ACCESSWIRE will our and and increased now highlight encouraged businesses our positive are I the flows. the results

of $X.X period XX%, for quarter same $X.X or Total an of million, first the increase to was revenue for $X.X XXXX compared XXXX. of the million million,

revenue. the or $X.X led $X.X to million, Our or of growth million, increasing communications total XX%, XX% business

by all acquisition in XX% included of Communications revenue revenue revenue. of accounted Newswire, of QX was revenue. total for which During The Communication is in for revenue increase our driven XXXX,

price same XXXX quarter increased revenue average the prior of compared the an release. same the period X%, or the primarily period from which first Compliance of of We during to $XXX,XXX increase increased also due our in to per XXXX. revenue XX% year, business, compared increased ACCESSWIRE generated to

our increase transfer in during increase proxy in increase to This transactions an primarily larger an due number increase in related the to was services actions well of the agent in revenue projects. due period, as and as print and to from services fulfillment an an increase corporate

Switching over to gross margins.

scale QX margins for or of million increased from period compared of the margin Due Newswire XX% business the compared QX gross XX%, from overall was services. XXXX. $X.X our of period in XX% Communications percentage business business, $X.X the for improved to decrease Compliance and of compliant XXXX% to to costs XX% headcount and in to acquisition associated ACCESSWIRE of million a to quarter gross Our with of Gross outsourcing primarily Gross increased to first quarter, from same margin XXXX. XX% related the XX% to the XXXX, in additional XX% XXXX. from margins during our our from same

an increase Moving despite to in expenses, Newswire additional operating $XXX,XXX is acquisition, attributed in as costs Newswire to due acquired of an expense intangible in posted to of the amortization compared business. decrease operating well operating QX attributed increase to gross XXXX, to of income The XXXX. $XXX,XXX We QX the operating for income. during during as margins income, primarily assets operating

growth. with costs, costs for had onetime of all and employee comp additional employee cost future we one-time stock stock Additionally, related and the to cost investment expenses, General, are our related to associated compensation expense, with for integration Newswire associated an due future growth. costs continued increase administrative XX% in investments with the increased transaction, associated expense, which transaction expenses business, operate transaction

team. the the in operating well business, of cost compared costs increased to Newswire directly as XXXX. addition and attributed Sales reduction the Newswire Product offset period were executive sales to partially with XX% of as associated by increased increases costs to hiring due additional Officer. recruiting fees new These the Technology a of development XXX%, marketing same the a Chief

On impacted transaction in acquisition, interest the rate of or per net QX fair diluted same to expense swap, as value the the compared $X.XX during increase income acquired of share we expense. I Newswire stock of well period $XXX,XXX minute loss $XXX,XXX attributed XXXX. onetime in to discuss per amortization as of compared was this during expenses, $X.XX GAAP the a will during XXXX XXXX, of of net diluted changes by assets basis, a intangible an or the a to and reported QX decrease change share compensation as additional in

some or X% Looking a $XX,XXX, generated XXXX. of of for of $XXX,XXX we metrics, XXXX, compared EBITDA decrease to of non-GAAP QX to QX

As a EBITDA QX revenue, decreased percentage in to of XXXX, for to XX% XXXX. QX compared of X% of

costs compared adjusted million, $X.X transaction. QX driven from $XXX,XXX However, onetime for XXXX QX as EBITDA $X.X XX% resulting related of well expenses, integration acquisition higher our of to was to to to and by Newswire XXXX. as the payment the extinguish made in payable This increase increased note million

like loss value rate well as as interest the We swap, higher stock noncash to items our also related of $XXX,XXX recorded compensation. fair change in

and to or of Non-GAAP for compared QX just per to diluted diluted a discussed net increased $X.XX $X.XX percentage the share or income XXXX EBITDA. adjusted non-GAAP in was impacting increase same in of As $XXX,XXX million, per the $X.X share driven both XX% items first EBITDA net XXXX. by adjusted The quarter was XXXX of QX for XXXX. revenue, of income

to over statement. sheet balance Switching and the flow cash the

the as next decreased backlog, which $X.X million March compared recognize XXXX to Our was This deferred by months driven discuss XX, will of $X.X as XX, revenue XXXX. shortly. balance, of December we to million which is XX to Brian slightly over revenue expect primarily

resulted payment cash flow the the onetime of flow a generated the free for quarter flow XXXX. to Cash positive QX adjusted termination of $XXX,XXX from for to On in flow of of QX of during the related cash early $XXX,XXX acquisition. the of quarter QX company. an we for $XXX,XXX of the impacted consecutive $XXX,XXX XXXX operations for $XXX,XXX flow to cash from XXXX note of cash statement, XXrd the primarily compared compared operations Newswire XXXX. was in payable associated of This This with QX is by

I of will updates who will the provide business, have back Brian the to planned it over new some turn now everything remainder in on we else and for pipeline, the the year. products

Brian Balbirnie

Thank you, Tim.

subscribers shaping what to quarter up could we're and look products the and quarter making for first amazing year lineup. most was customer progress not gross another pleased important increased an revenues Our sustained Direct. in the with and our record We be here growth, product more margins, to be Issuer is forward to of

I business, driven As Tim $X.X quarter both drove in and performance news revenue the XX%. distribution were mentioned, in million $X.X for solid over of quarter, just our which the with revenues margins million, for gross by

distribution XX% business of overall XX% business Communications the business our our represents up saw total for X% our also Our quarter. and of Conversely, we year-over-year. Compliance on news revenues gains

news Newswire we're businesses daily will business quarters. who We're business contribute to the used have We but a see provider share new that communications taking winning the to even in incumbent, not are accounts market from more also new distribution continue only never before. the coming

our that clear it marking This still a in continuing is is good a shows industry indicator grow. to as

our to Moving customers.

we who and XX about customers in we our XXXX If customers previously talked had during reported had beyond. classifying to a only of period contracts customers said, XXXX whereas what about that you did way measurement, active account call the and during in who the recall, With had we talked with different us on last for was quarter. in work month

the a true with products, the us included our many is, which quarter Newswire, that Therefore, to move and future numbers said, same of XXXX KPI of align a up year. core Improving doing sense deals in X,XXX annual have that period continued we with customers the market. our give upmarket this grew it in peers with to compared sequentially are will in deals customers that customers ended what record Being to began communications signing dates. last our XX,XXX, in with quarter XX% as from X,XXX QX XX%. the start and we

mind perform QX. some our about call, But expected, that only quarter we that seeing for In keep talk last in quarter. not the anticipated seeing did two in happen in was the we months customers work and of that we

We you on. that update wanted to this report something that happy was to are we the case and

period signing the revenue in up the year We to during contracts for with organization success customers Moving ended start quarter subscriptions. deferred X,XXX revenues reported subscribing did same not the had Conversely, this to we that the These active or dates. has year. we deals develop to compared seeing customers trend quarter our with whereby a sales show for today. last XXX the are future also period products,

revenues, about talking begin to going going and are forward. we Therefore, deferred backlog

are $X,XXX in drive $X,XXX and we higher. This revenue Additionally, to per value. subscription year subscriber to in results compared QX in $X,XXX contract have increase average continued XX% QX The last year-over-year a in is QX.

business implement we complete are our our we platform core We grow entirely as double-digit teens at at continue to look confident will when XXXX communications subscription strategy.

that Last see to and standalone and out tell of this X% pick revenues our the news XX% This up and up industry and the is begin backlog subscriptions business volumes. an contract talked well. something as see quarter to in expect move we as do move indicator we're seeing QX, around would early and QX year. continue as see deferred ACCESSWIRE that we we did year-over-year However, throughout such, dates you slowdowns start success numbers sequentially. end was to we as I about

strategy, our market. ability here success acquisition to has of in Part attributable the also price to new to but our customer continue been the take

we illustrated Newswire of savings As of QX of cost we transaction November see acquisition the since year. be the expected have fully full year, to this last in mentioned,

in about today QX. million for full beyond. discussed incrementally $X last finish I benefited well coming product seen the revenues in P&L QX our would will the previously the savings core as XX this sets call partial and from QX benefit year and But this We to be June talking in communication of quarter like as year. the

that you have that for assets ability As some Newswire we know, us open to certain the transaction the addressable time. most afforded of we up market quite fully the acquired looking have total in been

these analysts, media integrated distribution engine. products as of includes new will well AI include According Communication over and as products value as as space pitching, news a has market database, monitoring, social Storytelling well $X industry a media These that to the the media billion. recommendation

in million proprietary is record. about alone $XXX link Media and we have something combined sets published professional by our have talked a and in our tune data intuitively we with to distribution that process that lot the writers past. articles journalists specific In media News product, each Database

Media other rankings enabling the from confidence available market. key components contact Database be believe engagement, in other standalone These uniquely for further the deliverability. products will a separate product lineup. are with in will as and subscription products We of This or completeness bundled we our us

products Media to a have Campaign customizable to also and and into or campaign is pitch It We allows and Database. an use, Manager with that our one-to-one targeting our easy pitching solution to customers pitching group. added

we would like. progress, virtual we as to as proven As companies add the in professionals giving to event products, live pitches will they many ability media also do our as

will key marketers launching PR products this believe company are and new We critical be as as professionals to announcements. well who

IR category. pivot we will our because and product can this be core At will year architecture the utilize Relations do to Investor both believe also this XXXX, to some PR. in later point able we datasets the We from in

plan the could outcomes to monitoring. but step, of reporting as measure in critical. why, them will is analysis benchmarks a not This is be great And adding engines as first monitoring Monitoring we measuring in a it is and story doing our is and lastly, against a place it course, outcomes the without be. telling impactful

we PR together. Our them. PR to the strategy of to product knowledge this recognize will manage having for why bring value process want the a tie customers communications unified our a team Optimizer Hence products that

It to the and Lastly, I'm passionately system the But ways customers. we market quality, say prominent engine. I'm do to lifting. is of the Not recommendation to and wanting great just want a our will. bringing helps help that very with something ideate produce with that their stories. help new the to we about, we sell products all trusted personally talked This we content to of heavy technology help our find don't doing to engaging will customers most them excited subscriptions about our

-- it easy ChatGPT authoring that will be say as added doing It that. to but be a tool, our easy to would everyone's we

of careful also is be You using and sure consideration terms messaging, it's to a the not building get to storytelling, only someone unique what for. make should the you content, yourself. but And else's pay use in businesses you're the brand there and protection

and it in lot ChatGPT that a we Conversely, have these of a exhibits to is great, built risks interested something we're market. assistant. but and bringing willing not writer

call her Let's and me. AI

all AI and to our you industry, customers and and series using AI AI think can engine, get intelligent your company work for me of AI create write our go to to information, whereby story. a you paragraph, your me to databases plugin an starting of short I your you questions, all will to answer amazing place be you for that me, tell of an a available and will and use, our

our recommendations tonality suggestions giving this of the all us set change release be other attributes. to the to quarter free plus customers industry traffic provide and The by full The key for fly is link on engagement your to first of phase will to outcomes, advancement customers. ability next and dozens

Some upgrade and we sharing with of when release AI you quarter of be we next will which me. the

with super are target to vital exciting These value $X,XXX annual pass subscriptions to XX,XXX and these to communications products the platform additions today drive us getting subscription of a will that in our new There our get to growth beyond. and result. want a We and business. help to as long-term

customer for revenues, with the was it today forward in well the results product our as remain We and always, per talking business, average spending margins We confident and and follow-up the calls. platforms, our in to growing. revenue as wins, you doing discussing As you teams, a subscriber time the nice our quarter. look to as

us we look updates serve more in to continue to forward you next brands market well Our the as sharing with quarter.

portion of Operator, Q&A can call. the the we please begin

Operator

be time we'll Certainly. a Instructions]. question-and-answer At session. this conducting [Operator

Securities. question first coming Your Grondahl from is from Mike Northland

live. Your line is

Mike Grondahl

get of Hey quarter. just to want on Brian, clarity. guys, little the bit I congratulations a

up bit industry you the industry? seem clarify again growing guess Are that's the be communications kind weakness call now saying what and to was? wide ACCESSWIRE year-end concerned in On updated less little a commentary you're there with to I the and on caught or and us It of were. was about Newswire passed just of that. back

Brian Balbirnie

We're to I volumes not is signs what a that tell the core standalone a volumes, you, QX They're Mike. just to slightly levels good everyone is yet that they're we Thanks, It's in No would but a minutes Yes. climbed the little up of question. ACCESSWIRE, XX% was doubt I as business indicated as couple be, back. talked ago. forward-looking, historical about This back tracking. they're that seeing continuing would industry are climb. show indicator beginning coming to right.

better incumbent would for headway in to the that for still market wonderful I optimistic continue that reasons us. making share. taking two going One ways, talked they're caution that against is Now, get and as we're about we to we're several

price, well continue So to a volume, regardless as our we are as growing to taking size, about. But industry back. we whether by seeing grow, come relative we as thing volumes good is the is which talked

entrance seeing see year we call late this to last days that new year. last probably the market in customer didn't We at the early and are XX into

corrections. little go thing volumes market is Does indicator bit, watch for much to markets. volumes. is to as We're going been historically, susceptible your not do that in see an are I've you back us of going good what to PR years, early progress financial in to this and may be it's up for a which how We're down things point. as XX in quicker, general, there or impact bouncing could happen a industry insinuate may the long that but industry the

Mike Grondahl

clarify sort Could good price for of XQ that then price to taking repeat 'XX, you're you that's XQ. the ARPU taking I that there. Got you're the 'XX those versus us to those market? us is them, way gave for see XQ refer in numbers out you just would numbers it. then and the maybe indicator best a and of if And the

Brian Balbirnie

have years, I a that began the we kind business, a when not right? for Is think never is were philosophical, historical look, historical just price as this stable and products rather we were of increasing We values that It's the didn't on conversation, stable, product in add to right, products, but subscription conversation. lineup and in right? stable typically increase. stable product able several subscriptions to renewal, weren't to we subscription Yes, consistency, not it's that our and

compliance the to earnings that's price We've done that QX about and IR whistleblower releases, a That's good $X,XXX websites, our this business, is in continue one services, prior ability calls, $X,XXX press to do and in to getting take QX We job we we're believe to a some on call That's the afforded that. subscription have us there. to good going year. the numbers that talked tools the compared side thing. the newsrooms,

we But of price and general. a to what more don't disclose interesting markets in is when average to look press us the we this is release at the

be future so consistently. you to of go So everybody. $XXX as volume XXXX, in kind quarters tell And were to if steadily, price going increased sub this vague I has look for we and would likely late do average we prices. has release press back to I'm But that

average that close if now. price very the so we of number $XXX release. certain market, in remove has segments the And press close to we And significantly are to grown $XXX

And And there we're us, by of need we theme A take to margin is right asked solution? in there's get Newswire to you of investors expensive I and being Could that. more room still rate, a of what at. very like you going that market so see below even plenty aggressive that's have should the the $XXX the market. to XX% us the to, the you else opportunities here? if consistent $XXX where is have markets lot feel you still compression we as force still with they're of in XX% do our price, to to everybody tell at be would

confident that continue still price will to we'll we're business grow. on that We're confident subscription So take our PR.

to it about I As it end call relates of PR a solutions the as reestablishing to include will relates us the and today. some of that market talked the adding products, new that new the way in at subscription

Mike Grondahl

this just lastly, year, products on we highlight you Got that of or would two if rest it. there's And focused one what sort should be as? those of Brian, the

Brian Balbirnie

Yes, a I wouldn't database the I Pitching call it's because to so want to out go as product sell they interesting. and together, think going Media We're them individually, hand-in-hand.

We you have non-traditional that globe, a for market. feel done like in outlet able more And work outlet be database to you to have a the them. firm a if communication the to be professionals need belief and than to communication journalists that have a done media way needs we in to across it's

email, Our right. be innovative, competitors folks to very not typically It's via media allow to pitch honest.

so it our events events we were our And ways at delivery, really good webcast do right. we and by pre-COVID by our virtual can we're products times products, We that solutions technologies event including it. developing desktop our that launching using built, into

So ability different we and a reach give way. feel the and professionals pitch we to like marketers can PR in

time. will to product combination A I So is important. the of take think monitoring be those going

monitoring You need hold. order media for pitching to in really take database and customers

So will will be even come likely this the later, available that year. though product

about really actually excited and But me. I'm AI

need system is good industry do the thoughtful the where And unique in content. we just AI PR help a that recommendation going. of We way. want engine all to writing think very it evolution I is

here research, product days. buy subscription to available recommendation customers there'll tonality peer to and they'll will call XX the a able engine then be be with that it this free So And up review. in into scoring begin next to be

this I'm they press as they that want compare all I So in words, to compared the it are? it. different? has And same using to Is data a to release. something Am recommendation other engine are writing I'm what my peers. engagement set in getting? I what And getting acronyms

and it them there's them mean about make to it magnified way, ease often, could feel be So easier some their We story we're content if and for do to a could there. tell what that, produce may more that a in to there we it strongly a excited world the for predisposition customer. to

free so to ahead market like creative solutions competitively, what And just the we're ways ChatGPT doing and using is be jumping find to of more there.

as well. product that about excited I'm So

Mike Grondahl

Hey, Got thank it. you.

Brian Balbirnie

Mike. welcome, You're you. Thank

Operator

question Thank Walter from next is R-Squared. Ramsley Instructions] you. Your coming from [Operator

Your line live. is

Walter Ramsley

Congratulations. That I was quite of at Hey, couple surprisingly Brian. mind. got least have, in The a my questions, actually. quarter, a I strong question

seasonality lookout overall Your should put it all, everything any if combine for? business, on there be we that now, the you is

Brian Balbirnie

I to several is next going lesser It a year. it quarters seasonality the call continue to less think less next the and is extent. be here over

we it but done to to Our really compliance hate that the the message seasonality that is business in believe continues I go and but it down it have seasonal -- this, the continue grow that continues, businesses we well. single-digits, helps than that To component We've adjustments will has to say that hopeful, been past. there. extent we're us to of a less

volume from folding PR and communications into are Newswire the now of talked business helps that that and acquiring today business unit. about majority business assets our segment we businesses our coming The as in definitely that the

of going minimize So we to that's feel some this. that

very sequential, here in going predictable, growth, to see the growth, we're begin subscription customer not coming revenue sequential but only quarters. so And growth to also

Walter Ramsley

the changes that Good. there do to Newswire. we other And other you has business savings cognizant with model should Are the in additional company then the Yeah. cost acquired, just of? be that question or

Brian Balbirnie

go through integration, we to of and majority the changes. the do look, had had do all stack Yes, vendor integration, February we the Tech to office finance systems, when from to management. those back with needed we a in what HR, November people November acquired a plan We of plan organization. assets

We of savings we of got revenues had that a as savings. in so, segment. that revenue to benefit through We little We're additional see the out there's that with bit that in we anticipate benefit going the And come of the really business communications The very of do. the we QX. in about, business we QX. cost fully of for us our month QX integration savings further a to essentially cost doing well all hard the in is in need worked talked don't with combination will

tell, the And increases, costs associated as through one-time can right. you with there effect of transaction, the Tim As we're talked some margin those. gross about was

so I be for good real going wise. And revenue be and to think to QX growth a business the baseline is shapes up what really wise earnings both

Walter Ramsley

looks it job anyway, putting all it together, done terrific like the and But you've outlook seems great.

So answering congratulations the again. questions. for Thanks

Brian Balbirnie

you, Thank Walter.

Operator

[Operator Thank Executive our Please hand Brian Chief session. you. and Instructions]. conference Thank Issuer That Q&A now closing Direct the go back of Balbirnie, to I'll concludes you. Founder ahead. for Officer remarks.

Brian Balbirnie

thank Matthew. as We And soon. look you, with for again forward following-up appreciate to Thank participating in. always call. We so. you it today's you to everybody

excited part remains beyond let a you. you are what Issuer the wonderful and Direct. We about go. year We'll for of Thank night. yourself Have

ACCESS Newswire (ACCS) 11 May 232023 Q1 Earnings call transcript