Earnings Call Transcript - ACCS Q1 2026

Operator, Operator

Welcome to Access Newswire's First Quarter 26 Earnings Conference Call.

Layla Calentery, Product Manager / Host

My name is Layla Calentery, 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 part of the PR Optimizer team, helping customers craft and amplify their stories. Now I am 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 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 is in store for our customers, our company, and myself as we all continue to get better every day. Before we begin, I would 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 will turn the call over to our founder and chief executive officer, Brian R. Balbirnie, and our chief financial officer, Steven Knerr. Brian?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

Thank you, Layla, and good morning, everyone. And thank you for joining us to discuss Q1 26 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 am 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 thousand sequentially from Q4 of last year, and down $149 thousand year over year. That is not where we want to be, and I want to acknowledge that plainly. Top-line 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 give us a good amount of confidence in our business. First, our customer retention. This is a number I am generally proud of. We moved from retention rates in the high eighties in 2025 to 92% in 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, that the products we launched are resonating with our customers. Churn was the story we talked about as a risk 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. Ninety-two percent 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 Model Context Protocol analytics, which we have previously called "Kill the Report." Just in social monitoring alone, we have seen a 20% ARR lift in subscribing customers. We see that pattern continuing as we move all of our paying subscriptions to higher tiers to include these product advancements. I will talk more about that later after Steven's prepared remarks. Third, and before I hand it to Steven, I want to be transparent about the cost posture heading into the back half of the year. We are watching the macro environment carefully. There are headwinds in the broader industry, and we want to make sure that we are prepared. We are actively reviewing our SG&A structure to identify further efficiencies. Operating expenses in Q1 came in at $4.7 million, down $580 thousand or 11% from the prior quarter, and down $281 thousand or 6% year over year. This is meaningful progress. We intend to hold this discipline and find additional levers if the environment warrants. 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%. This shift is one of the most important structural changes happening in our business. It is happening because our platform is earning that recurring commitment from our customers. Steven, over to you, sir.

Steven Knerr, Chief Financial Officer (CFO)

Thank you, Brian, and good morning, everyone. I will take you through the Q1 26 financial results in detail. Total revenue for Q1 26 was $5.3 million, a decrease of $472 thousand or 8% compared to Q4 25, and a decrease of $149 thousand or 3% compared to Q1 25. We will address the revenue dynamic directly. Q1 carries inherent seasonality given the post-holiday 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 26 was approximately $4.4 million, down from $4.8 million in Q4 25, consistent with normal seasonal volume patterns and consistent with Q1 25. As part of this, our PR platform and media suite revenue increased $200 thousand, up 23% sequentially and year over year. That growth reflects the early monetization of our new subscription tiers and the strength of platform adoption. Revenue from our Pro plan was flat compared to Q4 25, however, decreased $126 thousand or 46% from Q1 25. Gross margin for Q1 26 was 74% compared to 77% in Q4 25 and 78% in Q1 25. The sequential decrease in gross margin percentage reflects the 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 26, down $580 thousand or 11% from Q4 25 and down $281 thousand 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 thousand from Q4 25 and down $172 thousand year over year. Product development expenses came in at $560 thousand, down $60 thousand sequentially and down $173 thousand compared to the same quarter of the prior year due to higher capitalized costs and lower contractor expenses. During Q1 26, we capitalized $99 thousand compared to $61 thousand during 2025 and $23 thousand during 2024. Sales and marketing expenses were $1.68 million, essentially flat sequentially and up modestly year over year as we invested in the pressrelease.com brand and continued trade show activity. Operating loss for Q1 26 was $718 thousand, a slight improvement from Q4 25 and a shade lower than Q1 25. On a GAAP basis, net loss from continuing operations was $611 thousand in Q1 26, compared to $509 thousand in Q4 25 and $765 thousand in the prior year. The improvement reflects both cost discipline and reduced interest expense relative to the prior year. On a non-GAAP basis, EBITDA for the period was relatively flat. Adjusted EBITDA for the period was $564 thousand or 11% of revenue compared to 10% of revenue in the prior period, and compared to $881 thousand or 15% of revenue in a prior comparable period. 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 continue to generate adjusted free cash flow. Cash flow from operations increased to $871 thousand for Q1 26 compared to $258 thousand in the prior year and $747 thousand in a prior comparable period. 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.

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

Steven, thank you. Let me take a few minutes to give you the operating picture of what we are focused on for the rest of the year. As I said earlier, revenue growth is the priority, and I want to be specific about the levers that we are pulling. First, the new products we brought to market in Q4 and into Q1 are now in full commercialization mode. Social monitoring has been enabled as both a subscription upgrade and as part of our new Access PR subscription plans. This is generating incremental ARR. The $200 per month lift per upgrading subscriber that we discussed last quarter is real. As of Q2, it has begun, and we are seeing that 20% ARR lift as I mentioned earlier in the opening remarks. The benefit across customers initially introduced: 60% opted to take advantage of this benefit, generating an implied $550 thousand in ARR that we expect to see over the next 12 months. Second, Access Verified, our AI-powered editorial assistant, is now customer-facing and receiving strong early feedback. Customers have reported meaningful time savings and improved confidence in their content prior to distribution. This is not just a feature. It is a competitive differentiator that no other wire service can match in this depth. We have several upgrades and iterations of this product scheduled for the year, and we expect it to be a meaningful add-on driver to our plans. We envision both this and the next topic coming together closely as a single offering over the next 12 months. That is our Model Context Protocol, which we say MCP for short. It is our in-depth analytics report that I have called for the last two quarters "Kill the Report." Our very own AI-assisted content performance and analytics engine is live for customers right now. We made good on this commitment. The feedback from our initial customers over the last couple weeks who were granted an MVP at no cost to take a peek and experience the difference between our transparent real-time intelligence reporting and the legacy opaque distribution reports has been exactly what we expected. This is a market-differentiating product, and we expect it to drive both retention and upsell. There will be incremental revenue from this product for our entire customer base where customers can elect to buy the analytics engine on a per-release basis or on a subscription basis. We are confident, like our social monitoring solution, this new AI assistant content performance and analytics engine will deliver immediate revenue here in Q2 and help drive ARR toward our guided goals as well as provide our customers something they just cannot replace anywhere else. I explained this to our customers the other day: it is the report that you thought you should have gotten for decades in this business and we are the first to bring it to you. Also, as we grow our customer base, we want to consider tools and technologies we might never build that we feel partners can do a better job of delivering for our customers. This is really an expansion of the trusted relationships we have had on the public side for over a decade. Exchanges like the New York Stock Exchange, OTC Markets, and London Stock Exchange have been a part of our platform. Now we are just going after brands that have additional trusted platforms in both public and private companies. This marketplace that we talked about last quarter is fully operational and Hootsuite is leading the way as our first integration partner, with additional partnerships coming in the pipeline. The ability to schedule, publish, and analyze social content within the same platform used to distribute press releases is something our enterprise customers have been asking for. We expect this integration to contribute to new enterprise acquisitions in the second half of the year. We are also continuing to work with Hootsuite on cross-selling opportunities to better arm each other's customers with best-of-breed products. Moving along to subscribers, we continue to focus on quality of subscriptions over raw count, but we did sell more this quarter, coming in at 110 new customers in Q1, and we saw the retention improvement I highlighted earlier. Our pipeline for our Access EDU program is beginning to convert with schools and their associated PR agencies entering paid subscriptions. EDU investment is a long-term growth channel for us, and we are beginning to see early revenue signals. In Q1, ARR increased 15% year over year from $11 thousand to $12 thousand. We also ended the quarter up in total subscriptions, ending the period at 1.12 thousand subscribers, up 17% from 955. Sequentially, ARR increased 2%, and our subscribers increased 10%. The combination of these results has helped us manage our customer acquisition costs and improve them over last year, something we continue to believe we can improve as our brands gain more traction in the markets. Our subscription business retention rate continues to improve and the number of new customers is growing. That is translating into higher EBITDA margins, sustained growth, and improved gross margins. The latter we need to improve, but volumes are key to the majority of our PR business as a fixed cost. We do track our customer acquisition cost by subscriber and non-subscriber. For the quarter ended March, customer acquisition cost per subscriber was $5.29 thousand, and per non-subscriber was $2.28 thousand. We are seeing much lower customer acquisition costs in our pressrelease.com business, but it is too new for us to have a baseline yet to discuss. We plan to do that by year's end. For the remainder of 2026 and into 2027, we have a significant amount of new innovation advancements coming to our subscription business. Most notably is a full amplification of a story — how and where it can be told at the right time to the right audiences. We have already tested a good bit of this on our Model Context Protocol platform, and have gained significant excitement from industry experts. We are committed to what we started this year: to out-innovate our peers, deliver value to our customers beyond the press release, and continually innovate where our customers ask. In closing, yes, revenues were down slightly year over year, and yes, we experienced some macro industry volume fluctuations, but our customer accounts continue to deliver. Our ARR increased, the number of subscribers grew, and our technology is being delivered at a higher rate than ever before. Lastly, for the quarter, we continue to repurchase our common shares and have a little more than half of our repurchase plan left. We look forward to completing the plan and instituting further repurchases this year. We are focused, and our teams continue to work hard to improve our customer acquisition costs, retention, and overall new customer activity as well as expand our core product features. In combination, we believe this will allow us to continue to generate cash flows from operations, increase our EBITDA margins, and increase our overall market share.

Operator, Operator

I am going to turn the call over to the operator for questions. At this time, we will be conducting a question-and-answer session. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset. One moment please while we poll for questions. And the first question today is coming from Luke Horton from Northland Securities. Luke, your line is live.

Luke Horton, Analyst, Northland Securities

Hey, guys. Thanks for taking the questions. Brian, just wanted to start off with the product development front. I guess, what are you most excited about here in 2026 with the product suite, whether that be Access Verified, the MCP analytics reporting, and social monitoring? How would you rank excitement level amongst product development?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

That is a good question. It is a tough one to answer fairly. I would have to say, from a shareholder perspective, social monitoring is the most exciting because it is already proven that we have gotten conversion to the trade-up — getting customers to increase spend and get value from that platform. It is good to build products and great to put them to market fast and iterate them, but it is really rewarding to see that actually gain traction from a revenue contribution perspective. Access Verified is a strong intelligence tool to help our customers and our editors create and validate content more quickly. That is a real differentiator in the market. The reporting product, "Kill the Report," is important. This industry is old and antiquated and needs to change. We have tried to be the new incumbent to follow and be like others in the industry, but we do not want to be like them anymore. We expect "Kill the Report" to be as impactful as social monitoring this year. I am very excited about where we are headed and what our product development and operations teams are building for the latter part of this year. We are taking every ecosystem we interact with, our partners, and the needs of our customers into account. Our customers include investor relations and corporate communications teams with significant budgets for PR and marketing communications tools. We are not going to replace systems like HubSpot or Hootsuite, but there is an ecosystem of content curation and amplification that we have built, and we are excited to take that product to market. That will strengthen our ability to go upstream and engage across industries, bringing customers into our platform at a much higher rate, which would reduce our cost to acquire a customer and extend profitability long-term. So it is tough, but I think I led in as best order as I could, Luke.

Luke Horton, Analyst, Northland Securities

Okay. No. Yeah. Great. I appreciate that. And then from a sales effort, how do you balance — you added new subscribers during the quarter, but also the social monitoring platform gave a 20% lift in ARR. How do you balance trying to acquire net new customers versus cross-sell or upsell opportunities?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

Those teams work hard. A salesperson or territory manager's role is to engage every customer they have, along with marketing efforts to increase spend, increase subscriptions, and demonstrate value in new products. They are also responsible for new customer acquisition. They must attend events; we are doing a lot more events today than we ever have before and that is paying off in our pipeline. When you analyze the numbers, there are not enough touches — we need more people. We hired more people in the prior quarter to help drive outbound activity. What matters most is customers. The more customers we have, volumes increase and everything else takes care of itself. That allows our sales and development people to build relationships, increase ARRs, and increase utilization. It does not come without expense; salespeople wear a lot of hats. The priority last quarter was to sell good-quality subscription customers and get to customers about our new ARR add-ons. They did that well. We just need to do everything else too.

Luke Horton, Analyst, Northland Securities

Yep. No, that makes sense. And then lastly, average ARR per subscription continues to grow — seven out of the last eight quarters. Could you elaborate on how much of this is coming from price increases versus upgrading to higher product tiers across the platform?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

So in Q1, there were no pricing increases for our existing subscribers. Generally, folks in our industry raise prices all the time, but we did not increase rates for current subscribers. New subscription customers were at higher price points and with higher add-ons. We did increase price for some areas for new deals, but we did not increase price for current subscribers. With social monitoring add-ons, we want value proven to customers before pushing price. It is easier to take price with new customers who see immediate value. We believe long-term ARR will continue to grow, and we are doing a good job of that here in Q2 as well. We do not see that changing in the foreseeable future.

Luke Horton, Analyst, Northland Securities

Okay. Got it. Thanks for that, Brian. And thanks for taking the questions.

Operator, Operator

Thank you. The next question is coming from Jacob Stephan from Lake Street Capital Markets. Jacob, your line is live.

Jacob Stephan, Analyst, Lake Street Capital Markets

Hey, guys. Appreciate you taking the questions. First, I wanted to touch on the revenue decline. When we look at the Pro plan products, customer attrition there, webcasting events, and seasonal weakness, when in the quarter does it start to shift the other direction?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

It is interesting, and the devil is in the details. It is tough in an earnings call to pull everything out quickly. For our Pro plan customers, revenues have changed dramatically over the last year and a half, but we are not necessarily losing those customers. A good percentage of them are buying the Access PR subscription, so we are moving them to a more self-service model versus a fully managed model. As that continues, that Pro plan contribution may continue to decline and become part of Access PR subscribing products. Regarding seasonality, companies on the public side ramp up into Q2. The amount of events, conferences, and activity between Q1 and annual meeting time tends to kick up quickly. Utilization is about 40% of our business today and is driven by that activity. As we increase the percentage of revenue from subscriptions, the seasonality conversation diminishes. Historically, seasonality was more pronounced in our compliance business; it has become minimalized and will become de minimis here shortly. We look forward to guiding this business toward higher ARR percentage so by this time next year we are closer to 80% ARR and see less seasonality. Customers can buy plans that fit their volume needs and we would not have to worry about seasonal shifts. I hope that answers your question.

Jacob Stephan, Analyst, Lake Street Capital Markets

Got it. Understood. Maybe one more: you had an interesting number in your deck — $550 thousand implied ARR. Is that for the entire solution with social monitoring, or can you unpack that for me?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

That is a great question. That is just the revenue dollar value attributable to the social monitoring add-on. It does not affect what they were already spending with us. If a customer was spending $1,000 a year for an Access PR subscription and they opted for social monitoring, their annual spend increased by the social monitoring amount on top of their existing subscription. So that $550 thousand is the aggregate revenue over the next 12 months that we expect to earn from those customers who bought the upgrade; they are still paying for the other parts of the subscription. It is just a component of total ARR.

Jacob Stephan, Analyst, Lake Street Capital Markets

Okay. That is helpful. Last question for me: can you give an update on press release volume and competition? Where do you guys stand today?

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

We have seen volume across the market come down a bit. We are very close to Business Wire in volume, within a tenth of a percent, with Globe and some other services still in the top positions. For us, volume remains an important metric, but we now focus on volume by our core customers and subscribing customers. We want to manage volume coming from subscriptions versus PayGo or inbound e-commerce. Overall, we have not lost meaningful traction; the whole industry has seen a small decline in volume. I expect volume to pick up for the remainder of the year. Looking back three or four years, similar patterns have occurred where volume drops a bit across the board and then recovers. For us, becoming a subscription-first communications business reduces the impact of industry volume fluctuations. I am not overly worried about it.

Jacob Stephan, Analyst, Lake Street Capital Markets

Okay. Got it. I appreciate all the color. Thank you.

Operator, Operator

That concludes today's Q&A session.

Brian R. Balbirnie, Founder & Chief Executive Officer (CEO)

Thank you to everybody joining us today, both on the webcast and the teleconference. I appreciate the questions and follow-ups. I know there will be more as you digest the data. The 10-Q will be filed this afternoon after market close. I will be spending the rest of my day at the Sidoti conference, so if any of you here in New York want to stop by and have a chat, I have a couple of minutes between my one-on-ones. I wish you a good earnings season, and I will talk to you next quarter. Thank you.

Operator, Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.