NRC Health

Hello, everyone. Thank you for joining us and welcome to NRC Health Q1 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Jordan Freeman, VP of Finance. Jordan, please go ahead.

Thank you, Operator. Welcome to NRC Health's earnings conference call for the first quarter ended March 31st, 2026. I wanted to first let you know that we posted our earnings press release to the investor relations section on our website. On the call today, we have NRC Health's CEO, Trent Green, and CFO, Shane Harrison. Before getting started, I'd like to emphasize that this call will include statements related to the expected future results of our company, which are therefore forward-looking statements. Our actual results may differ materially from our expectations due to a number of risks and uncertainties, including those described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including definitions and reconciliations between GAAP financial information and non-GAAP financial information, is provided in the corresponding earnings press release, which is posted on NRC's Investor Relations website. A replay of this call will also be posted to the same website. With that, let me turn this call over to our CEO, Trent Green.

Thank you, Jordan. Good afternoon, everyone, and thank you for joining us for NRC Health's first quarter 2026 earnings call. Today, I'll start with an overview of our Q1 performance, highlight the momentum we're seeing in the business, and discuss the next chapter of the NRC health story. We kicked off 2026 with strong sales and adjusted EBITDA performance. Our total recurring contract value, or TRCV, increased 13% year-over-year to an all-time high of $152 million, which is $8 million higher than where we finished Q4 2025. Q1 new sales bookings were up over 200% year over year, driven primarily by a landmark deal I'll describe in a moment. Augmenting the strong sales performance was improved customer retention, where our gross retention rate reached its highest level in over seven years, driven by product and feature enhancements, more consistent engagement with our customers, and clearer articulation of the outcomes our solutions deliver. Revenue returned a positive year-over-year growth for the first time since 2023, increasing 4% to $35 million, and we improved our adjusted EBITDA margin sequentially by 2 points to 27%. A key highlight from the quarter was the signing of the largest deal in NRC Health's history. This agreement is both a validation of our strategy and a proof point of our differentiation in the market. Importantly, this was not an experience measurement purchase. It was an experience improvement decision based on our demonstrated capability to turn experience insights into tangible action that drives outcomes. We believe this customer selected NRC Health based on several factors. First, our solution's breadth. This organization purchased multiple SKUs across our experience and enablement product families. reflecting confidence in our ability to support a broad set of use cases on a unified platform. Second, our expertise and outcomes. They were specifically seeking in-the-moment patient feedback, higher survey response rates, and clear guidance and tools to support process improvement, areas where we have a proven track record. Third, how we work. This customer was seeking straightforward pricing and a streamlined contracting process, along with a highly effective ongoing support model. You'll hear more from Shane in a few moments about the financial implications of this deal. As encouraging as these results are, they're only part of the story. They reflect deliberate choices about who we serve, how we show up for our customers, and how we intend to grow over the long term. On April 1st, we celebrated our 45-year anniversary as a company, which prompted a simple question. What does the next chapter of NRC Health look like? Since day one, NRC has been driven by a simple but demanding belief. Healthcare improves when every patient, family member, and caregiver is understood as an N of one. That belief, which we call human understanding, remains foundational for our next step of enabling the actions that drive change. The environment our customers operate in makes that foundation more important than ever. Health systems are facing sustained financial pressure, workforce fatigue, rising consumer expectations, rapid technology change, and continued consolidation. Expectations are rising while margin for error is shrinking. In that context, our role is to bring clarity and increasingly to drive action. Our value proposition remains grounded in three elements, insight, engagement, and enablement. Insight provides a continuous view into what people expect and experience. Engagement aligns leaders and teams around what needs to change. And enablement is where improvement happens through tools, workflows, and operating practices that translate insight into better performance. Enablement is where our differentiation is most evident. Many players in our space can generate data and dashboards. We believe far fewer can help a health system act on what the data is telling them, especially when the answers are nuanced, uncomfortable, or financially significant. Our opportunity is to combine healthcare specific intelligence with relationships, governance best practices, and enablement tools to support real behavior change across the thousands of care sites that rely on our platform. Looking ahead, we've outlined a few clear commitments. First, we aim to be the trusted guide for what I would call healthcare built certainty, giving our customers confidence that what they measure is accurate, defensible, secure, and tied to better outcomes. Second, we're committed to honoring the end of one heart of NRC Health at scale, ensuring that AI and automation reinforce, not erode, the expectation that every patient, family, and employee is seen and understood. Third, we're investing to strengthen enablement, building on solutions like rounding and the governance institute to add operational tools that make continuous improvement part of the daily fabric of our customers' organizations. Underpinning all of this is how we think about stewardship for owners, associates, customers, and ultimately patients. Our shareholders should see disciplined execution, thoughtful capital deployment, and a long-term mindset. Our associates should experience a culture where stewardship is lived in how we lead and operate. Our customers should feel continuity, humility, and a focus on building their capabilities. And we remain mindful that in healthcare, outcomes are fundamentally human, measured in dignity, trust, and lives improved. I didn't step into this role to change the story of NRC Health. I stepped in to extend it. Our goal is to be known not only for measuring experience, but for helping our customers turn human understanding into measurable, repeatable improvement with rigor, with defensibility, and with humanity intact. With that strategic context in mind, let me turn the call over to Shane to walk through our first quarter financial results. Shane?