ACCESS Newswire Inc.

Welcome to Access Newswire's second quarter 2026 earnings conference call. My name is Forrest McConnell and I'm a product manager here at Access Newswire on the IR product team. I've been with the company since 2021, initially joining what was then our onboarding team, which has since evolved into our customer experience team. Today, I lead our investor relations products and services across websites, newsrooms, and shareholder engagement, supporting hundreds of our public company customers, as well as emerging companies preparing to enter the public markets. Additionally, my team and I also manage the New York Stock Exchange subsidy whistleblower product and implementation for some of the world's largest and most recognizable brands. My time here at Axis has been incredibly rewarding, and I couldn't be more excited about what's ahead. For our customers, for our company, and for my team as we continue to grow and evolve our products and services. 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 as they 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 Balbirnie, and our Chief Financial Officer, Steven Knerr.

Thank you, Forrest, and good morning, everyone, and thank you for joining us to discuss our second quarter 2026 results. Let me start with the headline number. Second quarter revenues were $5.6 million, up 5% sequentially from $5.3 million in the first quarter, and essentially consistent with the second quarter of last year. Core price release revenue increased 2% year over year, which tells us that the underlying engine of this business remains healthy. That was offset, however, by lower revenues from our webcast business, where we saw fewer virtual annual meetings and less reseller activity. I want to spend a moment on where we made up real progress. Average ARR per subscription customer was 12,718 at the end of the quarter, up from $11,039 a year ago, a 15% increase and another quarter of ARR growth. This is the clearest evidence that our platform strategy, moving customers onto higher value tiers, continues to work. That progress is being driven by the products that we built and have brought to market over the last 90 days. Our social monitoring platform and our new insights and analytics report are both live, and early adoption is encouraging. We expect to release several more products before year's end, and our focus is now turning that innovation into subscriber and revenue growth in our subscription business. Steve is going to walk you through the numbers in detail, and then I'd like to touch on a few topics from the first half of this year and what our priorities are for the second half of the year.

Thank you, Brian, and good morning, everyone. I will now take you through the second quarter and first half 2026 financial results. Total revenue for the second quarter of 2026 was $5.6 million, an increase of approximately $291,000, or 5%, compared to Q1 2026, and essentially unchanged compared to Q2 2025. The sequential increase was primarily driven by a 10% increase in volume from our core press release business, Reflecting the seasonal pattern we typically see following the first quarter, core press release revenue increased 2% compared to Q2 2025, while lower revenue from our pro plan customers partially offset that growth. Webcasting revenue was also lower compared to Q2 2025 due to fewer virtual annual meetings and reseller activity. For the first six months of 2026, total revenue was $10.9 million, down $152,000, or 1%, from $11.1 million in the first half of 2025. The year-over-year decline was primarily attributable to lower webcasting and pro-plan revenue. Importantly, revenue from our core press release business increased 1% for the first half of 2026 compared to the same period last year. Gross margin for Q2 2026 was $4.1 million, or 73% of revenue, compared to $4 million, or 74% of revenue in Q1 2026, and $4.3 million, or 76% of revenue in Q2 2025. The first half of 2026, gross margin was $8.1 million, or 74% of revenue, compared to $8.6 million, or 77% of revenue in the first half of 2025. The year over year decline in gross margin percentage primarily reflects higher press release distribution costs from a combination of new partners, price increases from existing partners, and additional usage under variable contracts. As Brian will discuss, we have implemented initiatives designed to reduce cost of revenues by approximately $150,000 in the back half of the year. Moving to operating expenses, total operating expenses were $4.4 million in Q2 2026, down slightly from $4.5 million in Q2 2025. For the first six months, total operating expenses were $9.1 million, down approximately $0.4 million, or 4% from $9.5 million in the first half of 2025. We continue to balance cost discipline with targeted investment in areas we believe can support future growth. General and administrative expenses were $1.35 million in Q2 2026, down $402,000, or 23% year over year. For the first half of 2026, G&A expenses were $3.1 million, down $574,000, or 15%. The decrease reflects lower non-recurring expenses, stock-based compensation, and bad debt expense, as well as lower insurance and office costs following the sale of the compliance business and our move to a remote work environment. Sales and marketing expense was $1.9 million in Q2 2026, up $427,000, or 29% compared to Q2 2025. For the first half of 2026, sales and marketing expense was $3.6 million, up $514,000, or 17%. This increase reflects our deliberate investment in advertising and trade shows as we work to convert our product innovation into customer and revenue growth. Product development expense was $533,000 in Q2 2026, down $122,000, or 19% year-over-year, and $1.1 million for the first half of 2026, down $295,000, or 21%. The decrease was primarily due to higher capitalized software costs. We capitalized $110,000 of software development costs in Q2 2026 and $209,000 for the first six months of 2026. compared to $0 and $23,000, respectively, in the comparable periods of last year. The costs mostly reflect the investment we made in our social monitoring and insight and analytics enhancements that we rolled out during the second quarter, as well as some additional enhancements Brian will speak more about. Operating loss for Q2 2026 was $307,000 compared to $249,000 during the second quarter of 2025. For the first half of 2026, operating loss was $1 million, compared to $926,000 in the first half of 2025. The year-over-year change was primarily driven by a lower gross margin, partially offset by lower operating expenses. On a gap basis, net loss from continuing operations was $354,000, or $0.09 per diluted share, for Q2 2026, compared to $239,000, or $0.06 per diluted share, during the second quarter of 2025. For the first six months, net loss from continuing operations was $965,000, or $0.25 per diluted share, compared to $1 million, or $0.26 per diluted share in the first half of 2025. On a non-GAAP basis, EBITDA was $0.5 million, or 8% of revenue for the second quarter of 2026, compared to $0.5 million, or 9% of revenue during the second quarter of 2025. Justed EBITDA was $0.6 million, or 11% of revenue, for Q2 2026, compared to $0.8 million, or 15% of revenue, in Q2 2025. Non-GAAP net income was $0.3 million, or 0.8 cents per diluted share during the second quarter of 2026, compared to $0.6 million, or 0.14 cents per diluted share in a prior year quarter. Adjusted free cash flow was $50,000 for Q2 2026, compared to $250,000 in Q2 2025. For the first half of 2026, EBITDA amounted to $0.5 million, or 4% of revenue, consistent with the first half of 2025. Adjusted EBITDA was $1.2 million, or 11% of revenue, compared to $1.4 million, or 13% of revenue in the prior year period. Non-GAAP net income was $0.7 million or $0.18 per diluted share compared to $0.8 million or $0.20 per diluted share last year. Adjusted free cash flow was $1 million for the first half of 2026 compared to $1.2 million for the first half of 2025. Cash flow from operations was $173,000 in Q2 2026 compared to $135,000 in Q2 2025. We ended the quarter with just under $3 million in the bank, and Brian will talk a little further about our share repurchase activity, which was ongoing during the quarter. The deferred revenue balance, which we expect to recognize over the next 12 months, was $5.1 million as of June 30, 2026, compared to $5.3 million at December 31, 2025. As we enter the second half of the year, our financial priorities remain consistent. Maintain operating discipline, invest selectively behind the products, and GoToMarket initiatives that can drive revenue and subscription growth and continue to strengthen the economics of the business. The progress in subscription ARR per customer, continued positive adjusted EBITDA, and our focus on cost efficiencies gives us a solid foundation as we work to improve top-line performance. With that, I will turn it back over to Brian.