NATIONAL RESEARCH CORP

NATIONAL RESEARCH CORP (NRC Health): Unpacking the 2025 Financial Performance

Discover the key financial highlights, strategic direction, and potential risks for NATIONAL RESEARCH CORP (NRC Health) from its fiscal year ended December 31, 2025.

Business Overview: NRC Health empowers healthcare organizations to improve patient and employee experiences, boost quality, and strengthen financial performance. As a leading provider of technology-enabled solutions, the company offers a suite of tools including patient experience surveys, employee engagement platforms, real-time feedback systems, and advanced analytics. These solutions help healthcare providers deliver better care and build stronger relationships with patients and staff.

Financial Performance: NRC Health delivered strong financial results in 2025:

• Revenue: Total revenue climbed to approximately $150 million, an 8% increase from $139 million in the previous fiscal year. This growth stemmed mainly from higher subscription renewals, expanded services with existing clients, and new customer acquisitions.
• Net Income: Net income rose 12% to $25 million, up from $22.3 million in 2024, a result of effective cost management and revenue expansion.
• Diluted Earnings Per Share (EPS): Diluted EPS increased to $1.10 from $0.98 in 2024.
• Operating Cash Flow: The company generated robust operating cash flow of $30 million, ensuring strong liquidity for ongoing operations and strategic investments.

Risk Factors: While NRC Health holds a strong market position, investors should consider potential risks that could affect its future performance:

• Customer Retention and Pricing Pressure: The company continuously works to retain customers, renew service contracts, and manage demands for lower prices or reduced services. Losing significant customers could materially impact revenue.
• Intense Competition: The healthcare experience solutions market is highly competitive. New entrants and potential consolidation among existing competitors could increase price competition, raise customer acquisition costs, and pressure profit margins.
• Product and Technology Performance: The effectiveness and reliability of NRC Health's solutions are vital. Failing to meet customer expectations or adapt to technological advancements could negatively affect customer satisfaction and sales.
• Acquisition and Partnership Integration: Strategic acquisitions and partnerships are part of the growth strategy. However, these ventures might not achieve the expected synergies, business growth, or profitability.
• Macroeconomic and Geopolitical Factors: Global events like pandemics, economic downturns, or geopolitical conflicts could disrupt operations, reduce customer spending, and negatively impact financial results.
• Healthcare Industry Dynamics: Changes within the healthcare industry, such as provider consolidation, shifts in care delivery models, or evolving reimbursement policies, could influence demand for NRC Health's services.
• Regulatory and Legislative Changes: New federal or state healthcare laws, budget changes, or other regulatory shifts could create compliance burdens or alter the operating environment for NRC Health and its customers.
• Talent Acquisition and Retention: Attracting and retaining key management personnel and skilled employees is crucial for innovation and operational success.
• Intellectual Property Protection: Protecting proprietary technology and intellectual property from infringement or unauthorized use by competitors remains an ongoing challenge.

Financial Health: As of December 31, 2025, NRC Health maintained a robust balance sheet. The company held approximately $70 million in cash and equivalents and reported no significant long-term debt, which positions it strongly for future growth. The $30 million in operating cash flow generated during the year further ensures ample liquidity for ongoing operations and strategic investments.

Future Outlook: NRC Health continues its mission to improve the human experience in healthcare. The company plans ongoing investments in its platform and strategic initiatives to drive sustainable growth and enhance shareholder value in the coming fiscal year. Key initiatives include:

• Product Innovation: Investing in research and development to enhance existing solutions and introduce new offerings. These will leverage AI and advanced analytics to provide deeper insights for healthcare providers.
• Customer Expansion & Retention: Deepening relationships with its extensive client base through value-added services and expanding its footprint by acquiring new healthcare system clients.
• Operational Efficiency: Continuously optimizing internal processes to improve profitability and scalability.

Competitive Position: NRC Health holds a strong competitive position as a leading provider of technology-enabled solutions in the healthcare experience market. The company aims to sustain its market leadership by offering superior customer service, robust data security, and a comprehensive suite of solutions that meet the evolving needs of the healthcare industry. While intense competition from new entrants and potential consolidation exists, NRC Health's strategy emphasizes innovation and customer value to maintain its competitive edge.

Market Information:

• As of February 28, 2026, NRC Health reported approximately 22.7 million shares of common stock outstanding.
• The total market value of its common stock held by non-affiliates was approximately $194.8 million as of June 30, 2025.