National Research (NRC) Q1 2026 earnings summary

Executive summary

• Q1 2026 achieved record Total Recurring Contract Value (TRCV) of $152.1 million, up 13% year-over-year, with revenue growth for the first time since 2023, reaching $34.8 million.

• New sales bookings surged over 200% year-over-year, driven by the largest multi-year deal in company history, with customer retention at multi-year highs.

• Gross retention rate reached its highest level in over seven years, reflecting improved customer engagement and product enhancements.

• Operating income declined 35% to $5.6 million due to increased executive compensation and technology investments.

• The company is focused on expanding its platform, driving actionable insights, and supporting healthcare organizations in a challenging market.

Financial highlights

• Q1 revenue was $34.8 million, up 4% year-over-year, with TRCV at $152.1 million, up 13% year-over-year and 5% sequentially.

• Adjusted EBITDA was $9.4 million (27% margin), up 230 basis points sequentially but down from 30.8% in the prior year.

• Adjusted net income was $4.6 million, with adjusted EPS of $0.21, up $0.05 sequentially.

• Free cash flow rose nearly 50% year-over-year to $5.3 million ($0.24 per share), with free cash flow margin at 15.4%.

• Net income fell to $3.2 million from $5.8 million year-over-year, with diluted EPS at $0.14.

Outlook and guidance

• The landmark multi-year deal will be implemented in two phases, with Phase I (Experience platform) going live in Q3 2026 and Phase II (Enablement platform) in Q3 2027.

• Near-term margin expansion will be limited by implementation costs and a $9.4 million Q2 expense from executive equity award amendments, but margins are expected to expand in Q3 and beyond.

• Long-term EBITDA margin is targeted to return to the low 30s in the midterm and potentially mid-30s longer term, assuming mid- to high single-digit top-line growth.

• Management expects existing liquidity and cash flows to be sufficient for foreseeable capital and debt needs.