ACCESS Newswire reported second-quarter 2025 results (quarter ended June 30, 2025) on August 12, 2025, with Founder and CEO Brian Balbirnie and CFO Steve Knerr framing the period as steady progress in the company's transition from a pay-as-you-go press-release business to a subscription and ARR model. Revenue was $5.6 million, down 7% year over year from $6 million but up 3% sequentially from the first quarter's $5.5 million, which management said shows the core business finding its footing. Profitability improved markedly on cost reductions: EBITDA more than doubled to $480,000 (9% of revenue), adjusted EBITDA rose to $836,000 (15%) and more than tripled to $1.4 million for the first half, and non-GAAP net income increased $455,000 to $556,000, or $0.14 per diluted share. The company generated positive operating cash flow of $135,000 and adjusted free cash flow of $250,000, reversing prior-year outflows, as total operating expenses fell 12% and gross margin held at 76%. Strategically, ACCESS Newswire completed the sale of its compliance business (a first-half gain that lifted discontinued-operations net income to nearly $6 million), merged its Newswire and ACCESSwire brands, and grew ARR per employee to $216,000 from $205,000 in early 2024. Management reaffirmed year-end goals of over 1,500 subscribers and moving toward 75% recurring revenue, while flagging second-half launches in customer-facing AI validation, social media partnerships, and a webcasting upgrade.
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. 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 Balbirnie, and our Chief Financial Officer, Steve Knerr, 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 Balbirnie, and our Chief Financial Officer, Stevn Knerr. 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. By passing, I mean crushing it. 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 absolutely 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 me today on the second quarter results and 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 the second quarter were $5.6 million, compared to $6 million in Q2 last year and $5.5 million in the 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 the first to the 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 $9.71 from $8.67 in Q2 of last year, and also up 2% from Q1 sequentially this year of $9.55. ARR 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-GAAP 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, it 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 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 30th, 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% in 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. For 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 of 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 30th, 2025, as compared to the same period of 2024, and remain 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 GAAP basis, we reported a loss from continuing operations of $239,000 or $0.06 per diluted share during the second quarter of 2025, compared to a net loss of $683,000 or $0.18 per diluted share during the second quarter of 2024. For the first half of 2025, net loss from continuing operations was $1 million or $0.26 per diluted share, compared to a net loss of $1.5 million or $0.38 per diluted share in the first half of 2024. Net loss from discontinued operations was $236,000 or $0.06 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 $0.14 per diluted share, compared to $101,000 or $0.03 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 $0.20 per diluted share, compared to a non-GAAP loss of $265,000 or $0.07 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 -$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 -$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?
Thank you, Steve. I wanted to acknowledge the dedication of our team and the continued trust of our customers. While we continue to see industry headwinds in the quarter, we also achieved measurable progress in the areas that matter most for our long-term strategy: growing recurring revenue, improving operational efficiencies, and continuing to enhance the value of every customer relationship. The revenue trends and sequential growth that we're seeing in the quarter, as Steven and I said a few minutes ago, total revenue for the second quarter came in at $5.6 million, representing a 3% sequential increase from Q1. Year-over-year, we were down 7% compared to $6 million in the same quarter last year. We anticipated that given the focus spent on post-close compliance business service agreements, but the sequential growth tells a more important story.
We're finding our footing again, and the underlying demand of our core business is healthy. The average revenue per employee and operational leverage is something else I'd like to talk about. One of the most encouraging metrics this quarter is our annual recurring revenue per employee, or ARR. This is an important measurement for us in the business as it reflects both our productivity and the scalability of our business model. Over the past several quarters, we have been disciplined about staffing levels while continuing to invest in automation and efficiency tools while shedding our compliance business. The result is that our ARR per employee has grown meaningfully, even in a challenging revenue environment. This is not just a cost control story; it's about building a business that can scale profitably as we add more customers without adding additional equivalent headcount.
It's about creating operational leverage so that each incremental dollar of ARR carries more margin to the bottom line. ARR on a full-time basis for FTE came in at $216,000 for the period ended June 30th, a business KPI we believe we can continue to increase by year's end. For context, according to Virtual Research, SaaS median ARR per full-time equivalent comes in at about $283,000, and top-performing enterprises deliver a little over $300,000 per employee. As a comparison, at the beginning of 2024, ARR per employee was $205,000. Obviously, key to this is top-line revenue growth and continued operational efficiencies, but we feel strongly we can deliver top SaaS performance over the next 18 months-24 months. Our shift towards subscriptions. Another major focus area is our ongoing transition to a more subscription-driven revenue mix.
Historically, a meaningful portion of our revenues had been tied to project-based and transactional activity. While those can be high margin and valuable, they are still less predictable. We know that for our sustained growth and shareholder value creation, we need a higher percentage of our business coming from renewable subscription-based contracts. We've been systematically repositioning our offerings, our sales process, and even our pricing structure to support this shift. This includes bundling services in a way that creates more value for the customer while locking in multiple period commitments. It also means investing in onboarding and customer success so that once a client comes in, they see enough immediate value to stay for years, not just months. This is an area that we need to continue to get better at and feel confident in our platform and our people to deliver.
With the transaction of compliance, we spent a good bit of time since February dedicated to the separation of the business units, something we expected to be done sooner. As a result, our product development and feature-rich expected add-ons were delayed slightly for good reason, something we are fully confident we will have back on track in the second half of the year. The internal AI advancements and proprietary language models have been deployed. We ended the prior quarter talking about this coming, and the internal press release validation process has been delivered into production for our staff, saving approximately 5% of the editorial time spent per article.
In the second half of the year, we will be releasing the customer-facing components to this so that we expect it will deliver clearer, more actionable stories for our customers, that we also further deliver operational efficiencies of another 5%-10% of editorial time. To deliver on this growth, we have to become a complete platform for our customer communication needs. Therefore, we will be delivering before year's end some significant social media partnerships that will integrate our platforms with leading social media management tools. The use of segments in a press release is going to be a key driver to how a brand message is delivered to its audiences via traditional news outlets, social platforms, internal corp com systems, as well as how the media and influencers cover the brand and how we report and benchmark the impact of the story.
Our subscriber growth targets, we've set clear goals. By year's end, we still aim to have over 1,500 subscribers on our platform. This is an ambitious target, and we are going to do everything in our ability to deliver on the target. A shift in keeping customers stickier has become a priority, and I believe there is more work to be done here in order to move our business closer to 75% recurring subscription revenue by the end of the year. We ended the quarter with growth in subscription count, and more importantly, the quality of those subscriptions is still continuing to improve, meaning longer contract durations, larger leveraged contract values, and higher cross-product adoption. We look forward to our sales funnel and see strong conversion rates in areas that we need to improve and that they've been identified.
Our sales and marketing teams have been focused on specific verticals where our value proposition is strongest, and our pipeline going into the second half of the year supports our confidence in hitting our subscriber revenue numbers. Our ARR growth to the year-end road is a key metric that will define our 2025 success. As I mentioned earlier, ARR per employee is trending upwards, but we're also focused on the total ARR expansion. We believe that by leaning into subscription sales, leveraging up sale opportunities with our existing customer base, and continuing to expand our distribution reach, we can finish the year with ARR meaningfully higher than where we're standing today. I want to emphasize that ARR growth is not just about top-line expansion, it's also about building a resilient revenue base that we can count on for quarters and quarters, even when market conditions are less predictable.
It's about creating visibility for our investors, stability for our employees, and ongoing value for our customers. New subscriptions sold in the second quarter were an average ARR of almost $12,000. Now, if we move along to cost structure and margin improvement, something we've talked about in prior calls, earlier this year, we committed to reducing our operational expenses. I'm pleased to report that these reductions have been realized, and you're seeing them here in Q2 results today, and they'll continue to be fully reflected in the second half of the year absent the investment that we're making in our sales and marketing teams. This is evident in our cash flows from operations, as well as our adjusted EBITDA numbers Steve just spoke about. Combined with our shift towards higher margin subscription revenues, we expect these savings to flow directly into improved operating margins.
This positions us well for the second half of the year and beyond. With incremental ARR growth, it should yield us even greater profitability without proportional increases in costs. Before I close, I want to take a moment to talk about the broader market landscape. The communications and investor relations technology sector is evolving rapidly. Customers are looking for integrated solutions that combine content creation, distribution, analytics, and engagement in a single platform. They also expect faster turnaround times, deeper reach, and more actionable insights. ACCESS Newswire is positioned to deliver exactly that. Our ACCESS distribution network is not only competitive in terms of reach and reliability, but it is also backed by a platform that makes it easier for customers to create, manage, and measure their communications. This is an important differentiator.
Many of our competitors focus on one piece of the puzzle, but our integrated approach allows us to capture more of the customer's workflow and potentially increase stickiness and lifetime value. Another advantage is our scale in target verticals. We've developed strong transactions in industries like life sciences, small-cap public companies, newly formed SMBs, and certain regulatory sectors where our backgrounds of compliance expertise make us a differentiator. These verticals often require ongoing, frequent communication with investors and the public and the markets, making them ideal candidates for subscription-based services. A controversial area that I'm personally pushing our teams to think about is something that is very bold and internally I've called #KillTheReport, and not only really get rid of the distribution report but revolutionize the traditional way it is delivered and consumed by the customer.
The industry has grown old, very old, of the five-day PR report and nothing more than links to your releases, traffic counts, and geographic locations of your engagement. If you're lucky, integrated brand monitoring reports from a third party for an additional fee, often not shareable or easy to benchmark against. We are somewhat guilty following the market and what the customer perception is for a deliverable. It's what I actually used to call the PR report as the deliverability report. I envision a very different concept here, one where the report is built based on what you want to know by the hour, by the day, or by the week. A report that delivers on every metric you could ever want in one interface, not like today where companies are buying several different analytic systems and brand monitoring and benchmarking software to help them measure their engagement.