NRC Health recently released its Form 10-Q for the quarter ended June 30, 2026. The Lincoln, Nebraska-based company provides subscription-based analytics and insight tools to U.S. healthcare organizations, including patient experience, employee experience, consumer experience, market experience, and governance offerings. Its products are designed to collect and analyze self-reported information from patients, families, consumers, and employees to help customers track experience, reputation, loyalty, and care transitions.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
For the three months ended June 30, 2026, NRC Health reported revenue of $35.4 million, up 4% from $34.0 million a year earlier. Direct expenses rose 5% to $13.6 million, while selling, general and administrative expenses jumped 29% to $22.9 million. Depreciation and amortization increased 22% to $2.1 million.
The company posted an operating loss of $3.2 million in the quarter, compared with operating income of $1.6 million in the prior-year period. Total other expense widened 29% to $1.3 million, and the company recorded an income tax benefit of $1.3 million versus a tax provision of $0.7 million a year earlier. Operating margin fell to negative 9% from positive 5%.
Revenue growth in the quarter came mainly from $1.2 million of higher recurring revenue from existing customers and $0.9 million of higher revenue from new customers, partially offset by $0.7 million of new contra-revenue tied to sales where NRC Health acted as an agent for third-party solutions.
Direct expenses were 38% of revenue in both periods. NRC Health said the increase was driven mainly by higher survey delivery services, contractor services, and computer subscription costs tied to continued technology and development spending.
Selling, general and administrative expense rose sharply because of $7.1 million of higher stock-based compensation related to executive leadership, plus about $0.5 million of higher salary expense for executives not present in the prior-year period. Those increases were partly offset by $3.2 million of lower executive leadership transition bonus expense. NRC Health also cited higher travel and software subscription costs.
For the six months ended June 30, 2026, revenue increased 4% to $70.2 million from $67.6 million. Direct expenses rose 5% to $27.2 million, and SG&A increased 29% to $36.4 million. Depreciation and amortization climbed 31% to $4.3 million.
Operating income fell 77% to $2.3 million from $10.2 million a year earlier. Total other expense increased 32% to $2.5 million, and the company recorded a tax benefit of $0.1 million compared with a tax provision of $2.6 million in the prior-year period. Operating margin declined to 3% from 15%.
Six-month revenue growth was driven by $2.8 million of higher recurring revenue from existing customers and $0.5 million of higher revenue from new customers, partly offset by $0.7 million of contra-revenue from agented third-party solution sales.
Direct expenses were 39% of revenue in both periods. NRC Health said the increase reflected survey delivery services, contractor services, and computer subscription costs associated with technology and development investments.
SG&A rose by $8.3 million, led by $8.5 million of higher stock-based compensation tied to executive leadership. The company said this increase was mainly related to previously disclosed amendments to certain executive equity awards and is not expected to recur. Higher executive salaries, travel, regulatory-related accruals, and corporate expense timing also contributed.
Total recurring contract value at June 30, 2026 was $151.9 million, up 11% from $137.0 million a year earlier. NRC Health said the increase was primarily due to sales to new and existing customers.
Cash provided by operating activities was $8.6 million for the first six months of 2026, up 56% from $5.5 million in the same period of 2025. As a result of these announcements, the company's shares have moved 1.23% on the market, and are now trading at a price of $19.74. If you want to know more, read the company's complete 10-Q report here.
