ACCESS Newswire (NYSEAMERICAN:ACCS) CEO Brian Balbirnie outlined the company’s subscription growth, product expansion and customer-retention efforts during a company presentation, while acknowledging that its previously stated year-end subscriber target is unlikely to be met.
Balbirnie said second-quarter revenue rose 5% sequentially and annual recurring revenue per subscription increased 15% to $12,718. The company had more than 1,100 subscribers on its platform at the end of the reported period, including customers using its investor relations and public relations offerings.
He said ACCESS Newswire had not yet reported third-quarter results at the time of the presentation, but reiterated that the company had previously told shareholders it expected to return to growth in the second half of the year, improve adjusted EBITDA, increase subscriptions and expand gross margins.
Investor Relations and Public Relations Platforms
Balbirnie described the company’s business as having two primary revenue streams. Its investor relations subscription platform powers investor-relations websites and earnings-call infrastructure for approximately 475 public companies, according to the CEO. He cited Moderna, BlackBerry, Sherwin-Williams and Pinnacle Bank among companies using the platform.
The company’s public relations business extends beyond press-release distribution, he said, incorporating social monitoring, media monitoring, journalist databases, brand monitoring and outreach tools for public and private companies.
Customers that use both the investor-relations and public-relations solutions typically spend about $25,000 annually, Balbirnie said. He characterized ACCESS Newswire’s model as a services-based software business rather than a conventional software-as-a-service company, emphasizing the role of editors and staff in building client platforms and supporting earnings calls.
“Without our people, customers can’t do the work,” Balbirnie said.
Gross Margins, Cash Generation and Buybacks
Balbirnie said the company seeks to improve gross margins but does not intend to rely on artificial intelligence to replace editorial review of press releases. While AI could potentially raise margins to 80% or more by reducing human headcount, he said the company considers its editorial process and ACCESS Verified content standards important to customers.
He attributed quarter-to-quarter variations in gross margin partly to distribution costs, which can fluctuate as media outlets increasingly operate under pay-for-play arrangements. Balbirnie described the company as a mid- to high-gross-margin business that continues to generate cash and adjusted EBITDA.
The company typically holds about $3 million in cash on its balance sheet, he said, and spends roughly $1 million annually on share repurchases. As of the prior Friday, ACCESS Newswire had repurchased 146,000 shares for about $977,000 under a $1 million buyback program, representing approximately 4% of shares outstanding, according to Balbirnie.
New Products Focus on Customer Outcomes
Balbirnie highlighted several product initiatives, including ACCESS Verified, which examines a press release’s company, contact information and content to identify potential bad actors before distribution. He said the company stops roughly 10 suspected fraudulent press releases per week.
The company also launched ACCESS Events, an event-management and earnings-call platform designed to automate notifications, registration, earnings advisories, release preparation and analytics. Balbirnie said the product is intended to consolidate tasks that public companies often handle through several vendors.
Another offering, the ACCESS Toolbox, gives customers tools to optimize headlines, subheadlines and release content based on engagement data. Its audit analytics feature can review earnings releases and reconcile data points across financial statements, according to Balbirnie. He said the platform had been tested by 22 CPA-registered firms, including 10 PCAOB-certified firms, and approximately 50 CFOs over the prior six months.
About 11% of current non-subscribing customers have purchased ACCESS Insights & Analytics reports, Balbirnie said.
Updated Subscription Expectations
Balbirnie said ACCESS Newswire will likely finish the year with roughly 1,300 to 1,350 subscribers, below its prior target of 1,500. He also said annual recurring revenue per subscriber is expected to approach, but not reach, the company’s earlier $15,000 year-end objective.
The lower subscriber expectation reflects a deliberate move away from serving as many smaller companies in the event-driven microcap market, he said. The company plans to introduce subscription products beginning at about $249 per month, paid annually, compared with current monthly pricing that can range from $1,200 to $2,000.
- Customer retention improved from about 82% when the subscription business began to 94% this year, Balbirnie said.
- The company is guiding for retention of about 96% by year-end.
- Net dollar retention was 104% at the end of the second quarter, according to Balbirnie.
- Recurring services-based revenue accounted for about 60% of total revenue, with the company targeting 80% by the end of 2027.
Balbirnie said the company sees an opportunity among newly incorporated private businesses, particularly side-hustle ventures, which it targets as potential customers. He rejected the characterization that the press-release distribution market is a “melting ice cube,” citing the company’s cash generation, margins and expansion into new customer segments and services.
About ACCESS Newswire (NYSEAMERICAN:ACCS)
ACCESS Newswire is a communications technology company that provides press release distribution and media outreach services for businesses, public companies, investor relations professionals and public relations agencies. Its platform is designed to help organizations distribute corporate announcements, financial news, regulatory disclosures and other information to journalists, investors and the broader public.
The company’s services include multimedia news release distribution, newsroom and content management tools, media targeting, audience engagement and analytics.
