ACCESS Newswire Inc. Q1 2026 earnings call

Welcome to ACCESS Newswire's first quarter 2026 earnings conference call. My name is Layla 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 Access 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 Balbirnie, and our Chief Financial Officer, Steve Knerr. Brian.

Thank you, Layla. Good morning, everyone. 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're 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 7 of the last 8 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 monitoring 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, 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're 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 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 PRO 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 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, and 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, and 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 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 the 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.

Thanks, Steve. 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 product suites we brought to market at the end of Q4 and into Q1 is 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% in ARR lift, as I mentioned earlier in the opening remarks.

The benefit is across the initially introduced ACCESS PR customers, of which 60% opted to take advantage of this benefit, generating an implied $550,000 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. Early customers have reported meaningful time savings and improved confidence in their contents prior to distribution. This is not just a feature. It is a competitive differentiator that not any other wire service can match in its depth. We have several upgrades, iterations of this product scheduled for the year, and we expect to be in a meaningful add-on driver to our plans. We envision both this and the next topic here coming up, coming together closely as a single offering over the next 12 months.

That is our dynamic Model Context Protocol, which we say MCP for short as an industry term. It is our in-depth analytics report that I have coined for the last two quarters as #killthereport, our very own AI-assisted content performance and analytics engine, which 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 up to have this analytics engine on a per-release basis or 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 both ARR to our guided goals as well as provide our customers something that they just can't replace anywhere else. I explained this to our customers the other day. It's the report that you thought you should have gotten for decades in this business, and we're the first to bring it to you. As we grow our customer base, we want to be thoughtful about tools and technologies we might never build that we feel partners can do a better job for our customers.

This is really an expansion of our trusted relationships we have had on the public side for over a decade. Exchanges like New York Stock Exchange, OTC Markets, and London Stock Exchange have been a part of our platform. Now we're 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 and 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 the best-of-breed products.

Moving along to subscribers. 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. The EDU investment is long-term growth channels for us, and we're beginning to see early revenue signals. In Q1, ARR increased 15% year-over-year from $11,139 to $12,803. We also ended the quarter up in total subscriptions, ending the period at 1,119 subscribers, up 17% from 955. Sequentially, ARR increased 2% and our subscribers increased 10%.

The combination of these results have 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 in the numbers of new customers coming in and continues to grow, obviously 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 costs by subscriber and non-subscriber. For the quarter ended March, customer acquisition cost per subscriber was $5,292, and a non-subscriber was $2,279.

We are seeing much lower customer acquisition costs in our PressRelease.com business, but it's too new for us to have a baseline yet to discuss, but plan to do that by year's end. The remaining part of 2026 and into 2027, we have a significant amount of new innovation advancements coming to our subscription business. One most notably is a full amplification of a story and 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 have started this year, and that is that to out-innovate our peers, deliver value to our customers beyond a press release, and continually innovate where our customers ask. In closing, yes, revenues were down slightly year-over-year.

Yes, we experienced some macro industry volume fluctuations, but our customer counts continue to deliver, our ARR increased, and 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, and we look forward to completing the plan and instituting further repurchases this year. We are focused, 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, this will allow us to continue to generate cash flows from operations, increase our EBITDA margins, and increase our overall market share. I'm happy now to turn the call over to the operator for questions.