NRC Health Restores Profit After Second-Quarter Loss

The Tip Desk · October 27, 2026 · 3 min read

Third-quarter revenue reached $38.4 million, up 11% from a year earlier, and GAAP net income was $4.7 million, or $0.21 a share.

NRC Health (NRC), a healthcare experience improvement solutions company, reported third-quarter revenue of $38.4 million, up 11% from a year earlier, after 4% year-over-year growth in both the first and second quarters of 2026.

GAAP net income was $4.7 million, or 12% of revenue, and $0.21 a share on 22.0 million fully diluted shares. Adjusted net income matched the GAAP figure at $4.7 million.

That result reversed a GAAP net loss of $3.3 million in the second quarter, when adjusted net income had been $6.9 million, or 19% of revenue, after previously announced accelerated vesting of stock and associated cash bonuses. Adjusted EBITDA was $10.9 million, or 28% of revenue.

Chief executive Trent Green said the company delivered sequential margin expansion, that a large customer went live on schedule, and that several long-standing customers renewed under multi-year agreements. He said the expanding contract base would convert into revenue and that operating leverage would translate into greater profitability and free cash flow over time.

Total Recurring Contract Value was $154.1 million, up 9% year-over-year, after 11% year-over-year growth in the second quarter and 13% in the first. Management describes TRCV as a leading indicator of future revenue.

Direct expenses were $15.4 million. Selling, general, and administrative expenses were $12.0 million. Operating income was $8.9 million. Interest expense was $1.5 million.

Net cash from operating activities was $8.0 million, or 21% of revenue, and free cash flow was $7.0 million. Those figures followed $1.4 million of operating cash flow and $0.1 million of free cash flow in the second quarter, which the company said reflected about $2.9 million of cash payments tied to that quarter’s adjustment items. Capital expenditures were $1.0 million.

Cash and cash equivalents were $3.6 million at September 30, 2026. Deferred revenue was $20.3 million. Notes payable, net of the current portion and unamortized debt issuance costs, were $98.1 million. Shareholders’ equity was negative $9.1 million.

In the quarter the company borrowed $15.0 million on notes payable and $14.0 million on a revolving loan, and paid $15.0 million on the revolving loan. It spent $16.0 million to repurchase shares for treasury and paid $3.5 million of dividends.

The board declared a quarterly cash dividend of $0.16 a share on October 14, 2026, matching the $0.16 dividend declared in the second-quarter release. The dividend is payable January 8, 2027, to shareholders of record on December 29, 2026.

Green’s comments on the large customer going live, multi-year renewals, and the expected conversion of the contract base into revenue were the company’s account of the quarter’s operating turn. The 11% revenue increase, the return to GAAP profitability after the second-quarter loss, and the $154.1 million TRCV stock were the reported results that framed that account.