ACCESS Newswire Inc.

Welcome to Access Newswire's first quarter, 2026 earnings conference call. My name is Leila Kalantari and I am a product manager here at Access Newswire. I have been with the company since 2022, initially from the newswire.com business where I was a part of the PR optimizer team, helping customers craft and amplify their stories. Now I'm a part of the product team, where I help ideate and shape some of the most exciting tools at the core of our industry's need. I also have been involved with our amazing EDU program, training professors and bringing our product to over 100 universities and thousands of students. My time here at Access has flown by, and I could not be more excited about what's in store for our customers, our company, and myself as we all continue to get better every day. Before we begin, I'd like to remind everyone 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 predictions of future performance or events are forward looking statements. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such statements. We will also discuss certain non-GAAP financial measures, which are provided for informational purposes and should be considered in addition to, not as a substitute for GAAP results. With that, I'll turn the call over to our Founder and Chief Executive Officer, Brian Balberny, and our Chief Financial Officer, Steve Nehr. Brian?

Thank you, Layla, and good morning, everyone, and thank you for joining us to discuss Q1 2026 results. It has been a pleasure to see you grow here at Access, Layla. I could not be more grateful for your customer-first passion. You are a big part of our product and CX teams, and I'm sure I am speaking for the rest of the company when I say thank you so much. With that, let me be direct with you from the onset. Q1 revenues came in at 5.3 million, down 472,000 sequentially from Q4 of last year, and down 149,000 year over year. That is not where we want to be, and I want to acknowledge that plainly. Topline growth is the mandate for 2026, and Q1 tells us we have to continue to push harder on new customer acquisition and volume. We are not satisfied with that number, and I will outline specifically what we are going to do about it. That said, there are several signals from Q1 that do give us a good amount of confidence in our business. First, our customer retention. This is a number I am genuinely proud of. We moved from retention rates in the high 80s in 2025 to 92% in Q1 of 2026. This is a fundamental shift in the health of our subscription business. Retention at this level tells us that customers are finding value in our platform and that our customer experience investments are working and that the product we launched are resonating with our customers. Churn was the story we talked about as risks in our Q4 call, and that is no longer the dominant story. The move to quarterly and annual billing, the rebuild of our customer success teams are paying off. 92% retention is a result that we can build upon. Thank you both to our sales and CX teams for some great work since last year. Let's continue to learn, grow, and get better here. I am confident that we can reach our retention goals by year end. To be clear, that is greater than 95%. Second, ARR per subscriber has now increased for seven of the last eight quarters. This quarter, we continued that trend, reflecting the ongoing success of our trade-up and trade-in activities and early monetization of our new product tiers. Customers are now beginning to upgrade to our access PR that includes social monitoring, access verified, and soon this current quarter will be our new dynamic agent, MCP Analytics, that we have previously called Kill the Report. Just in social modeling alone, we have seen a 20% ARR lift in subscribing customers. We see that pattern continuing as we move all of our PR subscriptions to higher tiers to include these amazing new product advancements. I will talk more about that later after Steve's prepared remarks. Third, and before I hand it to Steve, I want to be transparent about the cost posture heading into the back half of the year. We are watching the macro environment carefully. These are headwinds in the broader industry, and we want to make sure that we are prepared. We're actively reviewing our SG&A structure to identify further efficiencies. Operating expenses in Q1 came in at 4.7, down $580,000, or 11% from the prior quarter, and down $281,000, or 6% year over year. This is meaningful progress. We intend to hold this discipline and find additional levers if the environment warrants it. We can manage costs without cutting into product innovation that is driving our platform differentiation and growth in our sales teams. The subscription story, however, continues to move in the right direction. Subscription revenues as a percentage of total revenue grew again this quarter, reaching approximately 60%. That shift is one of the most important structural changes happening in our business, and it is happening because our platform is earning that reoccurring commitment from our customers. Steve, over to you, sir.

Thank you, Brian, and good morning, everyone. I will take you through the Q1 of 2026 financial results in detail. Total revenue for the first quarter of 2026 was $5.3 million. a decrease of $472,000, or 8%, compared to Q4 2025, and a decrease of $149,000, or 3%, compared to Q1 2025. We will address the revenue dynamic directly. Q1 carries inherent seasonality given the post-year-end timing, and press release volumes tend to be lower in Q1 relative to Q4. That said, we know we need to improve on the top line and are executing accordingly. Core press release revenue for Q1 2026 was approximately $4.4 million, down from $4.8 million in Q4 2025, however, consistent with normal seasonal volume patterns and consistent with Q1 2025. As part of this, our PR platform and media suite revenue increased $200,000, up 23% sequentially and year over year. That growth reflects the early monetization of our new subscription tiers and the strength of platform adoptions. Revenue from our probe plan was flat compared to Q4 2025, however decreased $126,000, or 46%, from Q1 2025. Gross margin for Q1 2026 was 74%, compared to 77% in Q4 2025 and 78% in Q1 2025. The sequential decrease in gross margin percentage reflects a lower revenue base and a modest increase in cost of revenue due primarily to increased distribution costs. We believe gross margin will recover as volume and subscription revenue grow. The long-term trajectory of this metric remains upward. The structural advantages of our fixed cost distribution and AI-assisted editorial operations are intact. Moving to operating expenses, total operating costs were $4.7 million in Q1 2026, down $580,000 or 11% from Q4 2025, down $281,000 or 6% year-over-year. This reflects disciplined cost management across the organization. General and administrative expenses were $1.8 million in Q1, down $181,000 from Q4 2025, and down $172,000 year-over-year. Product development expenses came in at $560,000, down $60,000 sequentially, and $173,000 compared to the same quarter of the prior year due to higher capitalized costs and lower contractor expenses. During Q1 of 2026, we capitalized $99,000 compared to $61,000 during Q4 of 2025 and $23,000 during Q1 of 2025. Sales and marketing expenses were $1.68 million, essentially flat sequentially and up modestly year over year as we invested in a PressRelease.com brand and continued trade show activity. Operating loss for Q1 2026 was $718,000. a slight improvement from Q4 2025 and a shade lower than Q1 2025. On a GAAP basis, net loss from continuing operations was $611,000 in Q1 2026 compared to $509,000 in Q4 2025 and $765,000 in Q1 of 2025. The improvement reflects both cost discipline and reduced interest expense relative to the prior year. On a non-GAAP basis, EBITDA for Q1 of 2026 and Q1 of 2025 was relatively flat, compared to $251,000, or 4% of revenue in Q4 of 2025. Adjusted EBITDA for Q1 of 2026 and Q1 of 2025 was $564,000, or 11% and 10% of revenue, respectively, compared to $881,000, or 15% of revenue in Q4 of 2025. The sequential decline in adjusted EBITDA is primarily a function of lower revenue in the quarter. We ended the quarter with a solid cash position and continued to generate adjusted free cash flow. Cash flow from operations increased to $871,000 for Q1 of 2025, compared to $258,000 in Q4 of 2025 and $747,000 in Q1 of 2025. Our deferred revenue balance remains healthy, reflecting the forward-committed nature of our subscription business. Looking at our SG&A posture, as Brian mentioned, we are actively evaluating further efficiencies. We have demonstrated the ability to reduce costs without compromising the product roadmap. With potential industry headwinds on the horizon, we want to be positioned to act quickly if needed. The operational discipline we have built over the past 18 months gives us the flexibility to do that. I will now turn it back over to Brian.