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• Operating Loss - Operating loss was $677,000 for Q1 2025, as compared to $862,000 during Q1 2024. Operating expenses decreased $96,000 to $4.95 million. The decrease was primarily due to a reduction in headcount in our sales organization as well as lower advertising costs. These decreases were partially offset by a one-time stock compensation benefit recorded in Q1 2024.

• Loss from continuing operations - On a GAAP basis, net loss from continuing operations was $765,000, or $0.20 per diluted share, for the three months ended March 31, 2025, compared to $783,000, or $0.21 per diluted share, for the three months ended March 31, 2024.

• Net income from discontinued operations, net of tax - On a GAAP basis, net income from discontinued operations was $6,152,000, or $1.60 per diluted share during Q1 2025, compared to $644,000, or $0.17 per diluted share during Q1 2024. The increase was primarily due to a gain recorded on the sale of the compliance business of $6.0 million, net of taxes.

• Operating Cash Flows - Cash flows from operations for Q1 2025 were $809,000 compared to $77,000 in Q1 2024.

• Non-GAAP Measures - Q1 2025 EBITDA was $(4,000), compared to $245,000, or 4% of revenue, during Q1 2024. Adjusted EBITDA was $564,000, or 10% of revenue, for Q1 2025 compared to $61,000, or 1% of revenue, for Q1 2024. Non-GAAP net income for Q1 2025 was $206,000, or $0.05 per diluted share, compared to a loss of $365,000, or $0.10 per diluted share, during Q1 2024. Adjusted free-cash flow was $1,029,000 for Q1 2025 compared to $(126,000) for Q1 2024.

Key Performance Indicators:

• As of March 31, 2025, we had 12,020 customers who had an active contract during the past twelve months, compared to 11,903 as of March 31, 2024.

• Subscription customers increased by 81 to 955.

• Average ARR for subscriptions per customer at the end of the quarter was $11,139, up from $9,300 as of March 31, 2024.

Non-GAAP Financial Measures

The non-GAAP adjustments referenced herein relate to the exclusion of stock-based compensation, amortization of acquisition-related intangible assets. and other expenses the Company believes to be non-recurring. A reconciliation of GAAP to non-GAAP historical financial measures has been provided in the tables at the end of this press release.

We believe that the use of EBITDA from continuing operations, Adjusted EBITDA from continuing operations, non-GAAP net income (loss) from continuing operations, non-GAAP net income (loss) from continuing operations per share, free cash flow and adjusted free cash flow is helpful to its investors. These measures, which are referred to as non-GAAP financial measures, are not prepared in accordance with generally accepted accounting principles in the United States, or GAAP. Our management uses these non-GAAP financial measures as tools for financial and operational decision making and for evaluating our own operating results over different periods of time.

EBITDA from continuing operations is calculated by excluding depreciation and amortization, interest expense, net, and income taxes from the loss from continuing operations. Adjusted EBITDA also excludes certain other expenses which the Company believes to be non-recurring as well as the gain or loss on the change in fair value of our interest rate swap. Non-GAAP net income (loss) from continuing operations is calculated by excluding stock-based compensation expense and amortization expense for acquisition-related intangible assets from loss from continuing operations and certain other adjustments noted in the tables below. Non-GAAP net income (loss) from continuing operations per share is calculated by dividing non-GAAP net income (loss) from continuing operations by the weighted-average diluted shares outstanding as presented in the calculation of GAAP net income (loss) from continuing operations per share. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company's non-cash expenses, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between its operating results from period to period. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by our management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of its related amortization can vary significantly and are unique to each acquisition and thus we do not believe they are reflective of ongoing operations.

Free cash flow, a non-GAAP measure, represents cash flow from continuing operating activities less purchase of property and equipment and capitalized software. Adjusted free cash flow also deducts certain cash payments which the Company believe to be non-recurring in nature. We consider free cash flow and adjusted free cash flow to be liquidity measures that provide useful information to investors about the amount of cash generated or used by the business.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in the industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on our reported financial results.

The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Investors should review the reconciliation of non-GAAP financial measures to the comparable GAAP financial measures included below and not rely on any single financial measure to evaluate our business.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
($ in '000's, except per share amounts)
CALCULATION OF EBITDA & ADJUSTED EBITDA

(1) This adjustment gives effect to one-time corporate projects, including acquisition and integration expenses, incurred during the periods.
(2) For the three months ended March 31, 2025, this adjustment gives effect to the change in fair value of our interest rate swap of $69,000 as well as corporate re-brand costs of $132,000 and non-recurring accounting fees of $35,000. For the three months ended March 31, 2024, this adjustment gives effect to the change in fair value of our interest rate swap of $205,000, partially offset by non-recurring accounting costs of $35,000.
(3) The adjustments represent stock-based compensation expense from continuing operations related to awards of stock options, restricted stock units, or common stock in exchange for services. Although we expect to continue to award stock in exchange for services, the amount of stock-based compensation is excluded as it is subject to change as a result of one-time or non-recurring projects. For the three months ended March 31, 2024, this amount includes a benefit as a result of the resignation of an executive officer.

CALCULATION OF NON-GAAP NET INCOME (LOSS)

1) The adjustments represent the amortization of intangible assets related to acquired assets and companies.
2) The adjustments represent stock-based compensation expense from continuing operations related to awards of stock options, restricted stock units, or common stock in exchange for services. Although we expect to continue to award stock in exchange for services, the amount of stock-based compensation is excluded as it is subject to change as a result of one-time or non-recurring projects. For the three months ended March 31, 2024, this amount includes a benefit as a result of the resignation of an executive officer.
3) For the three months ended March 31, 2025, this adjustment reflects the change in fair value of our interest rate swap of $69,000, one-time corporate projects, including acquisition, divestiture and integration costs of $129.000, corporate re-brand costs of $132,000 and non-recurring accounting fees of $35,000. For the three months ended March 31, 2024, this adjustment gives effect to the change in fair value of our interest rate swap of $205,000, partially offset by one-time corporate projects, including acquisition and integration expenses, incurred during the period of $100,000.
4) This adjustment gives effect to the tax impact of all non-GAAP adjustments at the current Federal rate of 21%.
5) This adjustment gives effect to discrete items that impact income tax expense. For the three months ended March 31, 2025 and 2024, this relates to additional expense associated with vesting of stock-based compensation awards.

CALCULATION OF FREE CASH FLOW AND ADJUSTED FREE CASH FLOW

1) This adjustment gives effect to one-time corporate projects, including acquisition and integration expenses, paid during the periods.
2) For the three months ended March 31, 2025, this relates to payments related to our corporate re-brand and other non-recurring accounting fees. For the three months ended March 31, 2024, this relates to payments for non-recurring accounting fees during the period.

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About ACCESS Newswire Inc.

We are ACCESS Newswire, a globally trusted Public Relations (PR) and Investor Relations (IR) solutions provider. With a focus on innovation, customer service, and value-driven offerings, ACCESS Newswire empowers brands to connect with their audiences where it matters most. From startups and scale-ups to multi-billion-dollar global brands, we ensure your most important moments make an impact and resonate with your audiences. To learn more visit www.accessnewswire.com.

Forward-Looking Statements

Certain statements in this press release are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company's expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "commit," "estimate," "predict," "potential," "outlook," "guidance," "target," "goal," "project," "continue to," "confident," or the negative of those terms or other comparable terminology. The forward-looking statements in this press release include, among other things, our belief that the sale of our Compliance business positions us well as a focused standalone Communications platform subscription company, our goal of having 80% of our revenue come from subscription customers by the end of 2025 and our belief that the stage has been set for faster growth in the quarters ahead.

Please see the Company's documents filed or to be filed with the Securities and Exchange Commission at www.sec.gov, including the Company's Annual Reports filed on Form 10-K, including the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and Quarterly Reports on Form 10-Q, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this report. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For Further Information:

ACCESS Newswire Inc.
Brian R. Balbirnie
(919)-481-4000
brianb@accessnewswire.com

Hayden IR
Brett Maas
(646)-536-7331
brett@haydenir.com

Hayden IR
James Carbonara
(646)-755-7412
james@haydenir.com

ACCESS NEWSWIRE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

ACCESS NEWSWIRE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share amounts)

ACCESS NEWSWIRE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

SOURCE: ACCESS Newswire Inc.

View the original press release on ACCESS Newswire