ACCESS Newswire Inc.

Welcome to Access Newswire's second quarter 2025 earnings conference call. My name is Oscar Roque, and I work in the finance team as the accounting manager. And as of this September, I will have been here six years. I started working at the company in 2019 in the compliance division as an XBRL compliance specialist, and for the past three years in the accounting and finance department. It's such a pleasure to be your host today. In just a moment, you'll hear from our founder and chief executive officer, Brian Bowery, and our chief financial officer, Steve Nur, who will walk you through the company's performance for the quarter. Before we begin, I'd like to read a brief version of our safe harbor statement. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial position, 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. Non-GAAP results will also be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. With that said, I'd like to introduce the company's founder and chief executive officer, Brian Valverni, and our chief financial officer, Steve Nur. Brian?

Good morning, and thank you, Oscar. I've enjoyed watching you progress over the years from working within our compliance team at the beginning, then becoming a member of our accounting department to you sitting and passing your CPA exams just recently. And by passing, I mean crushing it. And now in the recent quarter, becoming our new accounting manager. Congratulations, sir. You exemplify everything a company and a coworker could ever ask for. Your passion for the business, your coworkers, and our customers are truly amazing. I have no doubt you will continue to thrive and continue to contribute in an absolute meaningful way. Little fact I hope Oscar won't mind me sharing. Not only has Oscar converted thousands of financial statements into XBRL and ticked and tied dozens of quarterly statements under Steve's direction, but most impressively, Oscar is multilingual and speaks four different languages. As you know, regardless of how busy or focused we are at any given period, we have to enjoy having a little fun with our team each quarter. Having them host a company call builds a connection beyond management to the shareholders, partners, and listeners. With that, good morning everyone and welcome and thank you for taking the time to speak with steve and i today on the second quarter results in our performance our press release which is accessible in our newsroom was released pre-market this morning and provides key takeaways on the performance for the quarter revenues delivered from second quarter were 5.6 million compared to 6 million in q2 last year and 5.5 million in first quarter of this year the year-over-year decrease is attributable to our product mix transformation from a pay-as-you-go business to a subscription-based business. As this begins to shape our business long-term, this is an indicator of the sequential growth that we are now seeing from first to second quarter. The shift drove further ARR on our subscription business higher for the quarter over the prior year. Specifically, our subscription customers increased 12% to 971 from 867 in Q2 of last year and also up 2% from Q1 sequentially this year of 955. AR also increased 10% from $10,000 to a little over $11,000 in the second quarter of the year compared to last year, and sequentially consistent from the Q1 of this year. We are encouraged to see gross margins coming in at 76% for the quarter, something I know we need to continue to evolve. Customer experience and editorial continue to be the focus of improvements, refinements, and automation. This is something to build on. I think we're on plan and will continue to be mindful of further efficiencies to deliver at these levels without sacrificing customer satisfaction. Before I turn the call over to Steve to discuss the results in more detail, I wanted to highlight some of the go-forward metrics that we will discuss on today's call. Total customer counts, total subscriptions, ARR of our subscription business, news distribution volumes, and something new to discuss is our ARR per employee. There's a lot more to talk about today, so I will turn the call over to Steve to cover the quarter and year-end highlights. Steve.

Thank you, Brian, and good morning, everyone. As Brian mentioned, we had a solid quarter, generating increased EBITDA, non-gap net income, and positive cash flow from operating activities. I will now discuss some of the details which led to these results. Total revenue for the second quarter of 2025 was $5.6 million, a decrease of $399,000, or 7%, compared to $6 million for the same period of 2024. For the first half of 2025, total revenue was $11.1 million, a $495,000 or 4% decrease from $11.6 million. The decrease was due to a slight decrease across our various product lines, including a decrease in core press release revenue of 4% and 2% respectively, due to lower revenue per release as a result of product mix, However, we experienced an increase in volumes of 8% and 6% during these periods. As we move customers to subscriptions, we expect to see some ebb and flow regarding average price per release as we learn our customers' behaviors. During the quarter, our gross margin percentage decreased 1% from 77% of revenue to 76%. However, increased overall for the first half of 2025 to 77% of revenue from 76%. The increase for the six-month period is primarily driven by optimization of our operational teams and lower headcount. The quarterly results were impacted by higher distribution costs as we continue to enhance our distribution network, as well as the lower revenue reported during the period. Gross margin decreased $362,000, or 8%, and $273,000, or 3%, for the three and six months ended June 30, 2025, respectively, as compared to the same period of the prior year. Moving to operating loss, we posted an operating loss from continuing operations of $249,000 for Q2 2025 and $926,000 for the first half of 2025, compared to operating losses of $531,000 and $1.4 million during the same periods of 2024. The decrease in operating loss despite the decrease in gross margin is a result of lower operating expenses. general and administrative expenses decreased $90,000 or 5% the second quarter of 2025 compared to the second quarter of 2024 due to a reduction in headcount and employee related expenses, including stock compensation expenses. The first half of 2025, general and administrative expenses increased $224,000 or 6% compared to the first half of 2024, which was primarily driven by a one-time benefit recorded in the first half of 2024 approximately $340,000 due to the reversal of stock compensation related to the resignation of an executive officer. Sales and marketing expenses decreased $481,000 or 25% and $958,000 or 24% for the three and six months ended June 30th, 2025 as compared to the same periods of 2024. This decrease is due to lower employee related and advertising expenses partially offset by additional rebranding costs incurred during the six-month period of 2025. Product development expenses decreased $64,000, or 9%, during the three months ended June 30, 2025, as compared to the same period of 2024, and remained consistent for the six months ended June 30, 2025, as compared to the same period of the prior year. Decreases in costs related to consultants were partially offset by declines in capitalized software. Overall operating expenses decreased by $644,000, or 12%, and $740,000, or 7%, for the three and six months ended June 30th, 2025, as compared to the prior year, as we remain focused on developing efficiencies and optimizing our teams. On a gap basis, we reported a loss from continuing operations of $239,000, or six cents per diluted share, during the second quarter of 2025, compared to a net loss of $683,000, or 18 cents per diluted share, during the second quarter of 2024. For the first half of 2025, net loss from continuing operations was $1 million, or 26 cents per diluted share, compared to a net loss of $1.5 million, or 38 cents per diluted share, in the first half of 2024. Net loss from discontinued operations was $236,000, or 6 cents per diluted share, for the second quarter of 2025, compared to net income from discontinued operations of $690,000, or $0.18 per diluted share, in the second quarter of 2024. For the first half of 2025, net income from discontinued operations was almost $6 million, or $1.54 per diluted share, compared to $1.3 million, or $0.35 per diluted share, for the same period of 2024. The increase is primarily as a result of the gain from the sale of the compliance business. Looking to some non-GAAP metrics, EBITDA was $480,000 or 9% of revenue for the second quarter of 2025 compared to $211,000 or 4% of revenue for the second quarter of 2024. For the first half of 2025, EBITDA was $476,000 or 4% of revenue compared to $282,000 or 2% for the first half of 2024. Adjusted EBITDA increased as well to $836,000 or 15% of revenue for the second quarter of 2025 compared to $528,000 or 9% of revenue for the second quarter of 2024. For the first half of 2025, adjusted EBITDA more than tripled to $1.4 million or 13% of revenue compared to $415,000 or 4% of revenue for the first half of 2024. Non-GAAP net income for the second quarter of 2025 increased $455,000 to $556,000 or 14 cents per diluted share compared to $101,000 or 3 cents per diluted share in the second quarter of 2024. For the first half of 2025, non-GAAP net income increased over $1 million to $762,000 or 20 cents per diluted share compared to a non-GAAP loss of $265,000 or 7 cents per diluted share during the first half of 2024. On the cash flow statement, we had another quarter of generating positive cash flow from operating activities, generating $135,000 for the quarter compared to negative $190,000 for the second quarter of 2024. For the first half of 2025, cash flow generated by operating activities increased to $882,000 compared to $796,000 for the first half of 2024. Adjusted free cash flow also increased for both the quarter and first half of 2025, amounting to $250,000 for the second quarter of 2025, compared to negative $491,000 for the second quarter of 2024, and for the first half of 2025, amounted to $1.2 million, compared to $491,000 for the first half of 2024. I will now turn it back over to Brian, who will provide some updates on the business, customers, subscriptions, along with everything else we have planned for the remainder of the year. Brian?