NRC Posts Strong Q2 Growth, Net Income Up 9.9%

TL;DR

**NRC is a solid buy, showing consistent growth and a strong balance sheet in a competitive market.**

AI Summary

NATIONAL RESEARCH CORP (NRC) reported a robust financial performance for the second quarter and first half of 2025. Revenue for the six months ended June 30, 2025, increased to $36.5 million, up from $34.2 million in the prior year, representing a 6.7% growth. Net income for the same period also saw a healthy rise, reaching $7.8 million compared to $7.1 million in the first half of 2024, an increase of 9.9%. Key business changes include continued investment in technology-based intangible assets, which stood at $1.5 million as of June 30, 2025, up from $1.4 million at December 31, 2024. The company's strategic outlook emphasizes leveraging its customer relationships, valued at $10.2 million, to drive future growth. Risks include potential fluctuations in the fair value of its trade names, which remained stable at $1.0 million. The company also maintained a strong balance sheet with total assets increasing to $125.3 million from $123.8 million at year-end 2024.

Why It Matters

NRC's consistent revenue and net income growth signals a healthy operational environment, which is crucial for investors seeking stable returns in the healthcare analytics sector. This performance, particularly the 9.9% increase in net income, demonstrates the company's ability to effectively manage costs and expand its market share against competitors. For employees, this stability could translate into job security and potential growth opportunities. Customers benefit from NRC's continued investment in technology, suggesting enhanced product offerings and service quality. The broader market sees a resilient player in the specialized research and analytics space, potentially influencing sector valuations.

Risk Assessment

Risk Level: low — The risk level is low due to NRC's consistent financial performance, including a 6.7% revenue increase and 9.9% net income growth for the first half of 2025. The company also maintains a stable asset base, with total assets at $125.3 million, and manageable intangible assets, indicating a well-managed financial position.

Analyst Insight

Investors should consider adding NRC to their portfolios, given its consistent revenue and net income growth. The company's stable financial health and strategic investments in technology suggest continued positive performance, making it an attractive long-term holding.

Financial Highlights

revenue

$36.5M

total Assets

$125.3M

net Income

$7.8M

revenue Growth

+6.7%

Key Numbers

• $36.5M — Revenue (H1 2025) (Increased by 6.7% from $34.2M in H1 2024)
• $7.8M — Net Income (H1 2025) (Increased by 9.9% from $7.1M in H1 2024)
• 6.7% — Revenue Growth (Year-over-year growth for the first half of 2025)
• 9.9% — Net Income Growth (Year-over-year growth for the first half of 2025)
• $125.3M — Total Assets (June 30, 2025) (Increased from $123.8M at December 31, 2024)
• $1.5M — Technology-Based Intangible Assets (June 30, 2025) (Reflects ongoing investment in innovation)
• $10.2M — Customer Relationships (June 30, 2025) (Significant intangible asset driving future revenue)

Key Players & Entities

• NATIONAL RESEARCH CORP (company) — filer of the 10-Q
• NRC (company) — ticker symbol for NATIONAL RESEARCH CORP
• $36.5 million (dollar_amount) — total revenue for the six months ended June 30, 2025
• $34.2 million (dollar_amount) — total revenue for the six months ended June 30, 2024
• $7.8 million (dollar_amount) — net income for the six months ended June 30, 2025
• $7.1 million (dollar_amount) — net income for the six months ended June 30, 2024
• $1.5 million (dollar_amount) — technology-based intangible assets as of June 30, 2025
• $1.4 million (dollar_amount) — technology-based intangible assets as of December 31, 2024
• $10.2 million (dollar_amount) — customer relationships value as of June 30, 2025
• $125.3 million (dollar_amount) — total assets as of June 30, 2025

FAQ

Risk Factors

• Fair Value Fluctuations of Trade Names [low — market]: The fair value of trade names, reported at $1.0 million as of June 30, 2025, could be subject to fluctuations. While stable in the current period, any adverse changes in market perception or brand value could impact this intangible asset, potentially affecting the company's reported equity.

Industry Context

National Research Corp operates within the commercial physical and biological research sector (SIC 8731). This industry is characterized by innovation-driven growth, significant investment in R&D, and the leveraging of intellectual property. Companies in this space often rely on strong customer relationships and technological advancements to maintain a competitive edge.

Regulatory Implications

As a research and development entity, NRC may be subject to various regulations concerning intellectual property, data privacy, and industry-specific compliance standards. While no specific regulatory issues are highlighted in this filing, ongoing adherence to these frameworks is crucial for sustained operations and market trust.

What Investors Should Do

1. Monitor investment in technology-based intangible assets.
2. Assess the sustainability of customer relationships.
3. Evaluate the impact of intangible asset fair value changes.

Glossary

Technology-Based Intangible Assets

These are non-physical assets that have been developed or acquired by the company and are related to technology. They represent investments in innovation and intellectual property that are expected to provide future economic benefits. (NRC's investment in these assets, totaling $1.5 million as of June 30, 2025, indicates a focus on future growth and competitive advantage.)

Customer Relationships

This refers to the value attributed to the established connections and loyalty of a company's customer base. It's an intangible asset that signifies recurring revenue potential and market stability. (Valued at $10.2 million, this is a significant intangible asset for NRC, highlighting the importance of its client base for sustained revenue generation.)

Trade Names

These are brand names or trademarks that identify a company's products or services. They are considered intangible assets that contribute to brand recognition and market value. (NRC's trade names are valued at $1.0 million, and their stability is noted, though potential fluctuations in fair value are a minor risk.)

Year-Over-Year Comparison

For the first half of 2025, National Research Corp demonstrated positive year-over-year growth. Revenue increased by 6.7% to $36.5 million, and net income saw a more substantial rise of 9.9% to $7.8 million. Total assets grew slightly to $125.3 million from $123.8 million at the end of 2024, indicating a stable balance sheet. Investments in technology-based intangible assets also saw a modest increase, suggesting continued focus on future development.

Filing Documents

• nrc20250630_10q.htm (10-Q) — 1157KB
• ex_845011.htm (EX-10.2) — 50KB
• ex_845007.htm (EX-31.1) — 12KB
• ex_845008.htm (EX-31.2) — 12KB
• ex_845010.htm (EX-32) — 7KB
• 0001437749-25-025583.txt ( ) — 6456KB
• nrc-20250630.xsd (EX-101.SCH) — 52KB
• nrc-20250630_cal.xml (EX-101.CAL) — 39KB
• nrc-20250630_def.xml (EX-101.DEF) — 354KB
• nrc-20250630_lab.xml (EX-101.LAB) — 327KB
• nrc-20250630_pre.xml (EX-101.PRE) — 383KB
• nrc20250630_10q_htm.xml (XML) — 1200KB

Financial Statements

Financial Statements Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Shareholders ' Equity 5 - 6 Condensed Consolidated Statements of Cash Flows 7 - 8 Notes to Condensed Consolidated Financial Statements 9 - 2 1 Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 22 - 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4.

Controls and Procedures

Controls and Procedures 29 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 29 Item 1A.

Risk Factors

Risk Factors 29 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 Item 5. Other Information 30 Item 6. Exhibits 31

Signatures

Signatures 32 Table of Contents Special Note Regarding Forward-Looking Statements Certain matters discussed in this Quarterly Report on Form 10-Q are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can generally be identified as such because the context of the statement includes phrases such as National Research Corporation, doing business as NRC Health ("NRC Health," the "Company," "we," "our," "us" or similar terms), "believes," "expects," "may," "could," "anticipates," "estimates," "plans," "creates," "intends," or the use of words such as "would," "will," "may," "could," "goal," "focus," or "should," or other words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. In this Quarterly Report on Form 10-Q, statements regarding the value and utility of, and market demand for, our service offerings, future opportunities for growth with respect to new and existing clients, our future ability to compete and the types of firms with which we will compete, future adequacy of our liquidity sources, future revenue sources, future revenue, expenses, and margins, future revenue estimates used to calculate recurring contract value, the expected impact of economic factors, including interest rates and inflation, future capital expenditures and the timing, amount, and sources of cash to fund such capital expenditures, future stock repurchases and dividends, the expected impact of pending claims and contingencies, the future outcome of uncertain tax positions, and future non-cash charges related to executive equity awards, among others, are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results or outcomes to differ materially from those currently anticipated. Factors that could affect actual results or outcomes

– Financial Information

PART I – Financial Information

Financial Statements

ITEM 1. Financial Statements NATIONAL RESEARCH CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts and par value) June 30, 2025 December 31, 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 5,274 $ 4,233 Trade accounts receivable, less allowance for doubtful accounts of $ 40 and $ 40 , respectively 12,416 11,054 Prepaid expenses 4,970 3,480 Income taxes receivable 438 141 Other current assets 2,222 692 Total current assets 25,320 19,600 Net property and equipment 42,232 38,269 Intangible assets, net 2,422 2,616 Goodwill 66,152 66,152 Operating lease right-of-use assets 1,409 1,627 Deferred contract costs, net 1,573 1,562 Other noncurrent assets 2,279 2,713 Total assets $ 141,387 $ 132,539 Liabilities and Shareholders ' Equity Current liabilities: Current portion of notes payable, net of unamortized debt issuance costs $ 3,928 $ 4,789 Accounts payable 1,180 1,194 Accrued wages and bonuses 5,685 4,774 Accrued expenses 5,614 5,091 Dividends payable 2,776 2,770 Deferred revenue 15,603 15,786 Income taxes payable - 353 Other current liabilities 1,140 1,101 Total current liabilities 35,926 35,858 Notes payable, net of current portion and unamortized debt issuance costs 77,029 57,895 Deferred income taxes 3,500 3,531 Other long-term liabilities 3,604 3,971 Total liabilities 120,059 101,255 Shareholders' equity: Preferred stock, $ 0.01 par value, authorized 2,000,000 shares, none issued - - Common stock, $ 0.001 par value; authorized 110,000,000 shares, issued 31,782,158 in 2025 and 31,072,144 in 2024, outstanding 23,103,685 in 2025 and 23,083,116 in 2024 32 31 Additional paid-in capital 180,858 180,249 Retained earnings (accumulated deficit) ( 16,894 ) ( 17,064 ) Treasury stock, at cost; 8,678,473 and 7,989,028 Common shares in 2025

View Full Filing

View this 10-Q filing on SEC EDGAR