National Research Corporation (NASDAQ:NRC) Q4 2018 Earnings Conference Call Transcript

Feb 13, 2019 • 11:00 am ET

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National Research Corporation (NASDAQ:NRC) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the National Research Corporation Fourth Quarter and Year-End 2018 Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded, Wednesday, February 13th, 2019.

I would now like to turn the call over to Mr. Michael Hays, Chief Executive Officer. Please go ahead, sir.

Executive
Michael Hays

Thank you, Ash and welcome everyone to National Research Corporation's 2018 fourth quarter and year-end earnings call. My name is Mike Hays, the company's CEO, and joining me on the call today is Kevin Karas, our Chief Financial Officer. Before we continue, I'd ask Kevin to review conditions related to any forward-looking statements that may be made as part of today's call. Kevin?

Executive
Kevin Karas

Thank you, Mike. This conference call includes forward-looking statements related to the company that involve risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about facts that could affect the company's future results, please see the company's filings with the Securities and Exchange Commission.

With that, I'll turn it back to you, Mike.

Executive
Michael Hays

Thanks, Kevin and again welcome everyone. As you may have noted last evening we announced the obtainment of an important goal that being the mix of business among current clients has shifted spin from legacy methods of experienced measurement and CAHPS compliance focus to an investment in our Voice of the Customer platform, with its accompanying embedded tools, such as Transparency that drives revenue and customer communities for coproducing care experiences.

This higher value strategic offering now accounts for $75 million of our contract value, more than half of our business and is emerging as an unmatched advantage of point of sale. After Kevin shares with his prepared remarks regarding our financial performance, we'll discuss how with most of our business now comprised of Voice of the Customer platform, we are likely to evolve.

With that, I turn the call back to Kevin.

Executive
Kevin Karas

Thank you, Mike. Our total contract value at the end of the fourth quarter of 2018 totaled $131.4 million, representing 5% growth over the same period in the prior year. Health care system clients with agreements for multiple solutions, represented 24% of our client base at the end of the fourth quarter of 2018, up from 22% at the same time last year. Subscription-based revenue agreements at the end of the fourth quarter of 2018 represented 95% of total recurring contract value.

Total contract value for our digital Voice of the Customer platform solutions increased to $75 million, compared to $56.6 million at the end of the fourth quarter of 2017. Fourth quarter 2018 revenue was $30.6 million, an increase of 2.5% over the fourth quarter of 2017, comprised entirely of organic growth from adding new customers and