• Total Revenue: $7 million for Q3 2024, $21.6 million for the first nine months of 2024, an 8% and 16% decrease respectively compared to 2023.
• Annual Recurring Revenue (ARR): Increased by nearly $1 million from the prior quarter and over $1.4 million year over year.
• Average Revenue per Subscriber: Grew 7% year over year to $10,114 per customer.
• Gross Margin: $5.2 million for Q3 2024, $16.1 million for the first nine months of 2024, with percentages decreasing to 74% and 75% respectively.
• Operating Income: $156,000 for Q3 2024, $438,000 for the first nine months of 2024.
• Net Loss: $466,000 or $0.12 per diluted share for Q3 2024, $598,000 or $0.16 per diluted share for the first nine months of 2024.
• Non-GAAP Net Income: $641,000 or $0.17 per diluted share for Q3 2024, $1.8 million or $0.47 per diluted share for the first nine months of 2024.
• EBITDA: $590,000 or 8% of revenue for Q3 2024, $2.6 million or 12% of revenue for the first nine months of 2024.
• Adjusted EBITDA: $1.4 million or 20% of revenue for Q3 2024, $3.6 million or 17% of revenue for the first nine months of 2024.
• Cash Flow from Operations: $1.5 million for Q3 2024, $2.3 million for the first nine months of 2024.
• Subscriptions: Total subscriptions reached 1,121, a 9% increase from the previous quarter and 7% year over year.

• Warning! GuruFocus has detected 5 Warning Signs with ISDR.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Issuer Direct Corp (ISDR) achieved a 9% increase in total subscriptions by the end of the third quarter, reaching 1,121 subscriptions.
• Annual recurring revenue (ARR) grew by nearly $1 million compared to the prior quarter and over $1.4 million compared to last year.
• Customer average revenue per subscriber increased 7% year over year to $10,114 per customer.
• The company is focusing on a transition towards a recurring revenue model with new media suite products, which is expected to drive future growth.
• Issuer Direct Corp (ISDR) is planning significant upgrades and new features for its platform in 2025, including global media database expansion and AI-supported video creation services.

Negative Points

• Total revenue decreased by $616,000 or 8% for the third quarter and $4.2 million or 16% for the first nine months of 2024 compared to the same periods of 2023.
• Communications revenue decreased by $597,000 or 10% for the quarter, primarily due to lower average revenue per release and decreased volumes from newswire brands.
• Gross margin percentages decreased to 74% and 75% for the three and nine months ended September 30, 2024, compared to 76% and 77% for the same periods of 2023.
• Operating income decreased significantly to $156,000 for the third quarter compared to $593,000 in the same period of 2023.
• Issuer Direct Corp (ISDR) reported a net loss of $466,000 for Q3 2024, compared to net income of $273,000 in Q3 2023.

Q & A Highlights

Q: Can you provide more details on the subscription growth and its impact on ARR? A: Brian Balbirnie, CEO, explained that the company sold approximately 200 new PR platform subscriptions in Q3, contributing $1.4 million in ARR, a 14% year-over-year increase. The new subscriptions resulted in a 92% retention rate going into Q4, with 70% of these subscriptions leading to a net dollar retention of 125%, or $640,000 in increased annual spend. Additionally, 30% of these subscriptions came from new customers, adding approximately half a million dollars in ARR.

Q: What are the key features and upgrades planned for the media suite platform in 2025? A: Brian Balbirnie, CEO, outlined several planned upgrades, including expanding the media database globally, significant upgrades to distribution and engagement reports, additional broadcast media and podcast integrations, and strategic partnerships with social media management platforms. The company also plans to enhance its AI solution, Amy, and introduce an AI-supported video creation service for press releases.

Q: How is the company addressing the decline in revenue from compliance and communications streams? A: Steve Knerr, CFO, noted that the decrease in revenue is due to declines in ACCESSWIRE and newswire brands, as well as a decrease in webcasting and events business. The company is focusing on transitioning to a recurring revenue model with new media suite products and subscription platforms, which is expected to drive future growth.

Q: What is the company's strategy for expanding its market share in the press release distribution industry? A: Brian Balbirnie, CEO, stated that the company is focused on disrupting the industry by putting customers first, offering flexible pricing and platform options, and transitioning to a subscription business model. The company has increased its market share to 20.28% as of Q3 and plans to continue growing by enhancing its media suite platform and expanding its product offerings.

Q: How does the company plan to leverage AI and technology advancements in its offerings? A: Brian Balbirnie, CEO, emphasized the company's commitment to integrating AI and natural language modeling into its offerings. This includes AI-supported video creation for press releases and tools that extend traditional press releases into full media, social snippets, and earned media pitching products. The company aims to enhance customer engagement and provide actionable insights through these technological advancements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.