ACCESS Newswire Inc. (ACCS) Q2 2025 Earnings Report, Transcript and Summary

Welcome to ACCESS Newswire's Second Quarter 2025 Earnings Conference Call. My name is Oscar Roque, and I work in the finance team as the Accounting Manager. And as of this September, I will have been here 6 years. I started working at the company in 2019 in the Compliance division as an XBRL Compliance Specialist and for the past 3 years in the Accounting and Finance department. It's such a pleasure to be your host today. In just a moment, you'll hear from our Founder and Chief Executive Officer, Brian Balbirnie; and our Chief Financial Officer, Steven Knerr, who will walk you through the company's performance for the quarter. Before we begin, I'd like to read a brief version of our safe harbor statement. I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, product releases, partnerships and any other statements that may be construed as a prediction of future performance or events are forward-looking statements, which may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. Non-GAAP results will also be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations, and is provided for informational purposes only. With that said, I'd like to introduce the company's Founder and Chief Executive Officer, Brian Balbirnie; and our Chief Financial Officer, Steven Knerr. Brian?

Good morning, and thank you, Oscar. I've enjoyed watching you progress over the years, from working within our Compliance team at the beginning, then becoming a member of our Accounting department, to you sitting and passing your CPA exams just recently. And by passing, I mean crushing it. And now in the recent quarter, becoming our new Accounting Manager. Congratulations, sir. You exemplify everything a company and a coworker could ever ask for. Your passion for the business, your coworkers and our customers are truly amazing. I have no doubt you will continue to thrive and continue to contribute in an absolute meaningful way. Little fact I hope Oscar won't mind me sharing, not only has Oscar converted thousands of financial statements into XBRL and ticked and tied dozens of quarterly statements under Steve's direction, but most impressively, Oscar is multilingual and speaks 4 different languages. As you know, regardless of how busy or focused we are at any given period, we have to enjoy having a little fun with our team each quarter. Having them host a company call, it builds a connection beyond management, to the shareholders, partners and listeners. With that, good morning, everyone, and welcome, and thank you for taking the time to speak with Steve and I today on the second quarter results and our performance. Our press release, which is accessible in our Newsroom, was released premarket this morning, and provides key takeaways on the performance for the quarter. Revenues delivered from second quarter were $5.6 million compared to $6 million in Q2 last year, and $5.5 million in the first quarter of this year. The year-over-year decrease is attributable to our product mix transformation from a pay-as-you-go business to a subscription-based business. As this begins to shape our business long term, this is an indicator of the sequential growth that we are now seeing from first to second quarter. The shift drove further ARR on our subscription business, higher for the quarter over the prior year. Specifically, our subscription customers increased 12% to 971 from 867 in Q2 of last year, and also up 2% from Q1 sequentially this year of 955. ARR also increased 10% from $10,000 to a little over $11,000 in the second quarter of the year compared to last year, and sequentially consistent from the Q1 of this year. We are encouraged to see gross margins coming in at 76% for the quarter, something I know we need to continue to evolve. Customer experience and editorial continue to be the focus of improvements, refinements and automation. This is something to build on. I think we're on plan, and we'll continue to be mindful of further efficiencies to deliver at these levels without sacrificing customer satisfaction. Before I turn the call over to Steve to discuss the results in more detail, I wanted to highlight some of the go-forward metrics that we will discuss on today's call. Total customer accounts, total subscriptions, ARR of our subscription business, news distribution volumes and something new to discuss is our ARR per employee. There's a lot more to talk about today. So I will turn the call over to Steve to cover the quarter and year-end highlights. Steve?

Thank you, Brian, and good morning, everyone. As Brian mentioned, we had a solid quarter, generating increased EBITDA, non-GAAP net income and positive cash flow from operating activities. I will now discuss some of the details which led to these results. Total revenue for the second quarter of 2025 was $5.6 million, a decrease of $399,000 or 7% compared to $6 million for the same period of 2024. For the first half of 2025, total revenue was $11.1 million, a $495,000 or 4% decrease from $11.6 million. The decrease was due to a slight decrease across our various product lines, including a decrease in core press release revenue of 4% and 2%, respectively, due to lower revenue per release as a result of product mix. However, we experienced an increase in volumes of 8% and 6% during these periods. As we move customers to subscriptions, we expect to see some ebb and flow regarding average price per release as we learn our customers' behaviors.

During the quarter, our gross margin percentage decreased 1%, from 77% of revenue to 76%. However, increased overall for the first half of 2025 to 77% of revenue from 76%. The increase for the 6-month period is primarily driven by optimization of our operational teams and lower headcount. The quarterly results were impacted by higher distribution costs as we continue to enhance our distribution network as well as the lower revenue reported during the period. Gross margin decreased $362,000 or 8% and $273,000 or 3% for the 3 and 6 months ended June 30, 2025, respectively as compared to the same period of the prior year.

Moving to operating loss. We posted an operating loss from continuing operations of $249,000 for Q2 2025 and $926,000 for the first half of 2025 compared to operating losses of $531,000 and $1.4 million during the same period of 2024. The decrease in operating loss despite the decrease in gross margin as a result of lower operating expenses. General and administrative expenses decreased $90,000 or 5% for the second quarter of 2025 compared to the second quarter of 2024 due to a reduction in head count and employee-related expenses, including stock compensation expenses. For the first half of 2025, general and administrative expenses increased $224,000 or 6% compared to the first half of 2024, which was primarily driven by a onetime benefit recorded in the first half of 2024 of approximately $340,000 due to the reversal of stock compensation related to the resignation of an Executive Officer. Sales and marketing expenses decreased $481,000 or 25% and $958,000 or 24% for the 3 and 6 months ended June 30, 2025, as compared to the same periods of 2024. This decrease is due to lower employee-related and advertising expenses, partially offset by additional rebranding costs incurred during the 6-month period of 2025. Product development expenses decreased $64,000 or 9% during the 3 months ended June 30, 2025, as compared to the same period of 2024, and remain consistent for the 6 months ended June 30, 2025, as compared to the same period of the prior year. Decreases in costs related to consultants were partially offset by declines in capitalized software. Overall, operating expenses decreased by $644,000 or 12% and $740,000 or 7% for the 3 and 6 months ended June 30, 2025, as compared to the prior year as we remain focused on developing efficiencies and optimizing our teams.

On a GAAP basis, we reported a loss from continuing operations of $239,000 or $0.06 per diluted share during the second quarter of 2025 compared to a net loss of $683,000 or $0.18 per diluted share during the second quarter of 2024. For the first half of 2025, net loss from continuing operations was $1 million or $0.26 per diluted share compared to a net loss of $1.5 million or $0.38 per diluted share in the first half of 2024. Net loss from discontinued operations was $236,000 or $0.06 per diluted share for the second quarter of 2025 compared to net income from discontinued operations of $690,000 or $0.18 per diluted share in the second quarter of 2024. For the first half of 2025, net income from discontinued operations was almost $6 million or $1.54 per diluted share compared to $1.3 million or $0.35 per diluted share for the same period of 2024. The increase is primarily as a result of the gain on the sale of the compliance business.

Looking to some non-GAAP metrics. EBITDA was $480,000 or 9% of revenue for the second quarter of 2025 compared to $211,000 or 4% of revenue for the second quarter of 2024. For the first half of 2025, EBITDA was $476,000 or 4% of revenue compared to $282,000 or 2% for the first half of 2024. Adjusted EBITDA increased as well, to $836,000 or 15% of revenue for the second quarter of 2025 compared to $528,000 or 9% of revenue for the second quarter of 2024. For the first half of 2025, adjusted EBITDA more than tripled to $1.4 million or 13% of revenue compared to $415,000 or 4% of revenue for the first half of 2024. Non-GAAP net income for the second quarter of 2025 increased $455,000 to $556,000 or $0.14 per diluted share compared to $101,000 or $0.03 per diluted share in the second quarter of 2024. For the first half of 2025, non-GAAP net income increased over $1 million to $762,000 or $0.20 per diluted share compared to a non-GAAP loss of $265,000 or $0.07 per diluted share during the first half of 2024.

On the cash flow statement, we had another quarter of generating positive cash flow from operating activities generating $135,000 for the quarter compared to negative $190,000 for the second quarter of 2024. For the first half of 2025 cash flow generated by operating activities increased to $882,000 compared to $796,000 for the first half of 2024. Adjusted free cash flow also increased for both the quarter and first half of 2025, amounting to $250,000 for the second quarter of 2025 compared to negative $491,000 for the second quarter of 2024, and for the first half of 2025 amounted to $1.2 million compared to $491,000 for the first half of 2024. I will now turn it back over to Brian, who will provide some updates on the business, customers subscriptions, while with everything else we have plans for the remainder of the year. Brian?

Thank you, Steve. I wanted to acknowledge the dedication of our team and the continued trust of our customers. While we continue to see industry headwinds in the quarter, we also achieved measurable progress in the areas that matter most for our long-term strategy, growing recurring revenue, improving operational efficiencies and continuing to enhance the value of every customer relationship. The revenue trends, the sequential growth that we're seeing in the quarter. As Steve and I said a few minutes ago, total revenue for the second quarter came in at $5.6 million, representing a 3% sequential increase from Q1 year-over-year, we were down 7% compared to $6 million in the same quarter last year. And we anticipate that given the focus spent on post-close compliance business service agreements, but the sequential growth tells a more important story. We're finding our footing again and the underlying demand of our core business is healthy.

The average revenue per employee and operational leverage is something else I'd like to talk about. One of the most encouraging metrics this quarter is our annual recurring revenue per employee or ARR. This is an important measurement for us in the business as it reflects both our productivity and the scalability of our business model. Over the past several quarters, we have been disciplined about staffing levels, while continuing to invest in automation and efficiency tools while shedding our compliance business. The result is that our ARR per employee has grown meaningfully even in a challenging revenue environment. This is not just cost control story. It's about building a business that can scale profitably as we add more customers without adding additional equivalent headcount. It's about creating operational leverage so that each incremental dollar of ARR carries more margin to the bottom line. ARR on a full-time basis for FTE came in at $216,000 for the period ended June 30, a business KPI we believe we can continue to increase by year's end. For context, according to a virtual research, SaaS medium ARR per full-time equivalent comes in about $283,000, and top-performing enterprises deliver a little over $300,000 per employee. As a comparison, at the beginning of 2024, ARR per employee was $205,000. Obviously, key to this is top line revenue growth and continued operational efficiencies, but we feel strongly we can deliver top SaaS performance over the next 18 to 24 months.

Our shift towards subscriptions. Another major focus area is our ongoing transition to a more subscription-driven revenue mix. Historically, a meaningful portion of our revenues have been tied to project-based and transactional activity. While those can be high margin and valuable, we are still less predictable. We know that our sustained growth and shareholder value creation, we need a higher percentage of our business coming from renewable subscription-based contracts. We've been systematically repositioning our offerings, our sales process and even our pricing structure to support this shift. This includes bundling services in a way that creates more value for the customer while locking in multiple period commitments. It also means investing in onboarding and customer success so that once a client comes in, they see enough immediate value to stay for years, not just months. This is an area that we need to continue to get better at and feel confident in our platform and our people to deliver. With the transaction of compliance, we spent a good bit of time since February dedicated to the separation of the business units, something we expected to be done sooner. And as a result, our product development and feature-rich expected add-ons were delayed slightly for good reason, something we are fully confident we will have back on track in the second half of the year.

The internal AI advancements and proprietary language models have been deployed. We ended the prior quarter talking about this coming, and the internal press release validation process has been delivered into production for our staff, saving approximately 5% of the editorial's time spent per article. In the second half of the year, we will be releasing the customer-facing components to this so that we expect that we'll deliver clearer, more actionable stories for our customers that we also further deliver operational efficiencies of another 5% to 10% of editorial time. To deliver on this growth, we have to become a complete platform for our customer communication needs. Therefore, we will be delivering before year's end some significant social media partnerships that will integrate our platforms with leading social media management tools. The use of segments in a press release is going to be a key driver to how a brand message is delivered to its audiences via traditional news outlets, social platforms, internal corp comm systems as well as how the media and influencers cover the brand and how we report and benchmark the impact of the story.

Our subscriber growth targets, we've set clear goals. By year's end, we still aim to have over 1,500 subscribers on our platform. This is an ambitious target, and we are going to do everything in our ability to deliver on the target. But a shift in keeping customers stickier has become a priority, and believe there is more work to be done here in order to move our business closer to 75% reoccurring subscription revenue by the end of the year. We ended the quarter with growth in subscription count. And more importantly, the quality of those subscriptions are still continuing to improve, meaning longer contract durations, larger leverage contract values and higher cross-product adoption. We look forward to our sales funnel and see strong conversion rates in areas that we need to improve, and that they've been identified. Our sales and marketing teams have been focused on specific verticals where our value proposition is strongest, and our pipeline going into the second half of the year supports our confidence in hitting our subscriber revenue numbers.

Our ARR growth at the year-end road is a key metric that will define our 2025 success. As I mentioned earlier, ARR per employee is trending upwards, but we're also focused on the total ARR expansion. We believe that by leaning into subscription sales, leveraging upsell opportunities with our existing customer base and continuing to expand our distribution reach, we can finish the year with ARR meaningfully higher than where we're standing today. I want to emphasize that ARR growth is not just about top line expansion. It's also about building a resilient revenue base that we can count on for quarters and quarters, even when market conditions are less predictable. It's about creating visibility for our investors, stability for our employees and ongoing value for our customers. New subscriptions sold in the second quarter were an average ARR of almost $12,000.

Now if we move along to cost structure and margin improvement, something we've talked about in prior calls. Earlier this year, we committed to reducing our operational expenses. I'm pleased to report that these reductions have been realized, and you're seeing them here in Q2 results today, and they'll continue to be fully reflected in the second half of the year, absent the investment that we're making in our sales and marketing teams. This is evident in our cash flows from operations as well as our adjusted EBITDA numbers Steve just spoke about. Combined with our shift towards higher-margin subscription revenues, we expect these savings to flow directly into improved operating margins. This positions us well for the second half of the year and beyond, with incremental ARR growth should yield us even greater profitability without proportional increases in costs.

Before I close, I want to take a moment to talk about the broader market landscape. The communications and investor relations technology sector is evolving rapidly. Customers are looking for integrated solutions that combine content creation, distribution, analytics and engagement in a single platform. They also expect faster turnaround times, deeper reach and more actionable insights. ACCESS Newswire is positioned to deliver exactly that. Our ACCESS distribution network is not only competitive in terms of reach and reliability, but it is also backed by a platform that makes it easier for customers to create, manage and measure their communications. This is an important differentiator. Many of our competitors focus on one piece of the puzzle, but our integrated approach allows us to capture more of the customers' workflow and potentially increase stickiness and lifetime value. Another advantage is our scale in target verticals. We've developed strong transactions in industries like life sciences, small-cap public companies, newly formed SMBs and certain regulatory sectors where our backgrounds of compliance expertise make us a differentiator. These verticals often require ongoing frequent communication with investors and the public and the markets, making them ideal candidates for subscription-based services.

A controversial area that I'm personally pushing our teams to think about is something that is very bold and internally, I've called #killthereport, and not only really get rid of the distribution report, but revolutionize the traditional way it is delivered and consumed by the customer. The industry has grown old, okay, very old of the 5-day PR report, and nothing more than links to your releases, traffic counts and geographic locations of your engagement. If you're lucky, integrated brand monitoring reports from a third party for an additional fee, often not shareable or easy to benchmark. We are somewhat guilty, following the market and what the customer perception for is for a deliverable. It's what I actually used to call the PR report, as the deliverability report. I envision a very different concept here, one where the report is built based on what you want to know by the hour, by the day or by the week, a report that delivers on every metric you could ever want in one interface, not like today where companies are buying several different analytics systems and brand monitoring and benchmarking softwares to help them measure their engagement. We will deliver on this by the beginning of 2026 for all of our subscribing customers. This will also be a deliverable, we believe we can drive further ARR, but also help improve retention and differentiation in the market. On our next quarterly call, we will talk a lot about the details of this new product.

We're seeing sequential revenue growth and healthy demand for our core business. Our ARR per employee is improving, indicating we're gaining more productivity and efficiency from our teams, evident in our operating expenses decreasing 12% for the quarter. We're well on our way to transitioning into a new subscription-led business model. Our target subscribers by year-end is aggressive, but within reach, supporting by a healthy sales pipeline and strong retention. Cost disciplines are in place, and we expect incremental margin improvement in the back half of the year. Our marketing position is strong with clear competitive advantages in our target verticals. We believe these steps will create a stronger, more predictable and more profitable ACCESS Newswire, one that's positioned to grow not just in size, but in quality of earnings. With that, I'll turn the call over to the operator for the question-and-answer session. Thank you.

[Operator Instructions] Our first question is coming from Luke Horton with Northland Securities.

Just wanted to start on kind of an overall update on the new business today. So you sold the compliance business. You've combined the Newswire and ACCESSWIRE brands. Just wondering if any incremental synergies or benefits to the business from these actions that maybe you didn't expect originally?

Luke, anything additional that we were able to achieve has yet to show through in the financials. I would tell you that there's likely some infrastructure costs that we'll see benefits for in the back half of this year, likely after this month, that will flow through in the OpEx savings side of the equation. I'd tell you that the core ACCESS Newswire business as a headcount perspective and an OpEx expense perspective is likely fairly consistent today as to what it will be through the end of the year. So we'll see some, probably, call it, $100,000 to $150,000 in savings here in 1.5 quarters, some infrastructure costs and going into next year, we'll continue to see that. But I would be fair to caution the fact that, to be honest, as we scale infrastructure for natural language processing and AI, you're likely going to see some of those costs come back as customers begin to use more of those solutions on our platform. We will also see some additional AI benefits to automation that will also help optimize some headcount levels, both inside and outside the company. And so we'll definitely talk about that in the next quarter or so.

Okay. Got it. Yes. And then just kind of shifting over to the kind of new customer pipeline. I know you've got a big existing base of customers who aren't on subscriptions yet. I guess how much of the focus is on the existing customers getting over to the subscription model versus kind of net new customers you're going after? And could you just give us a reminder of what kind of the sweet spot is here for new customers or for the new customer pipeline?

Yes. We -- in the last 3 quarters, we've worked through our customer demographic profiles of usage and spend to delineate which ones we believed would be most advantageous to convert from a pay-as-you-go or a bundled product or a stand-alone product into a full subscription. So generally, we're targeting customers that had annual previous spends above $5,000, sub-$15,000. And this is the majority of those customers. We've done a fairly good job of converting the ones in those categories. But as you climb up in spend, the customers are generally very different. And so that's where we see some of the ARR benefits to us, both on an ARR per customer as well as per employee, is that like we showed and talked about today, we've got some large cap customers coming in, buying the platform $30,000, $40,000, $50,000 and 2-year deals that we are getting confidence there that we'll be able to start focusing on those folks at the back half of the year. But look, to be fair, to get to our numbers, we've got to have an inbound flux of customers coming in, finding value in our subscriptions, both public and private, to be able to continue that growth.

Got it. And then I guess just on subscriptions for your customers that do have subscriptions, is there a percentage that are under multiyear subscriptions? Is that kind of a focus here? Or is mostly just annual renewals kind of as pricing is still working itself out here? Or are you focusing more or trying to get more of those multiyear subscriptions?

Yes. I think it's indicative to believe that a multiyear subscription comes from a more enterprise and larger mega cap company, right? The SMB categories, if I can just kind of put those in a bucket of small micro nanocap companies and just private companies in general call them SMBs, they typically are not going to commit for a long-term contract. And that's not just us. That's kind of an industry standard thing that we see and have seen for years. But if you think about companies like Sherwin-Williams or a BlackBerry or Moderna, some of the larger brands that we've got, they're generally buying in 2-, 3-, 4-year deals or buying on terms that give them the right to have the fixed pricing for multiyears. And so that, I think, is not going to change. To be fair, as we launch our pressrelease.com single-circuit platform next month, we likely are going to see maybe even a shorter-term subscription as we get customers really wanting to utilize the benefits of the platform to get them stickier. So I don't know that that's as big an issue as much as it is, but just making sure that we're showing value to the customer every day, and it keeps them coming back.

Got it. Yes. And then just lastly here, I know you touched on this in your prepared remarks, but could you just kind of go over some of the product enhancements you mentioned that are slated for the back half of the year and kind of what you're most excited about as we progress through '25 and into '26?

Yes, absolutely. Yes. And a lot of them I wish we would have been able to talk about and show today, but for obvious reasons with TSAs with our compliance business, there's only so much that can be done. Here this quarter, we likely will take our -- what we're calling internally is our PR checker and validator system that is helping our editors move through articles much quicker than previously. We're going to review that tool in an interface with our customer this quarter to allow the client to have access to it. So what that's going to do is check the tonality, check their messaging, run through our compliance distribution requirements. And before even the editor sees it, give the customer some sort of benefit to what they should expect to get out of this press release. What kind of engagement will they get? Are they picking the right distribution? Should they be selecting different distribution and using our media database to pitch those customers all at the same time. So that -- although it does not sound like a very, to be fair, sexy add-on and feature benefit, it is going to move the customer throughout the ecosystem of the platform, getting them to use more of the tools, which, in our belief, creates a more sticky process. And that's kind of a stepping stone to what we talked about at the end of the call, is what the new distribution engagement profile will look like for a customer, is that it will not only pull where your article is going, who's seeing it, but also who you pitched and did they engage and what you're ranking is against your peers. And so that will be kind of late this year, early next year as we release some of those. You'll see some sprinkle features that will come into the system. We've got a very significant upgrade coming to our, what I call webcasting platform, that's about to happen here in about 1.5 months. It's a big refresh, something we have not had in quite some time. It's one of our most stable, sticky LTV products that we've ever had on the subscription side. So we're advancing that solution to make our earnings calls a little more interactive with our clients and much more scalable because we're seeing audiences starting to grow again across the board and webcast and less in teleconference. There's a whole slate of them next quarter. We're going to talk specifically about them and spend a good bit of time. And if we're fortunate enough with our webcast upgrade, we'll be able to actually show some real-time things for folks to see as well.

Okay. Great. Awesome. Well, I appreciate the update there, Brian. And congrats on a nice quarter here.

Our next question is coming from Jacob Stephan with Lake Street Capital Markets.

I just wanted to touch on the comment you guys made in the prepared remarks. You kind of mentioned ARR could be meaningfully higher than today. I think last quarter, we kind of talked about ARR of $14,000 per customer for new onboards. But I mean, has that shifted at all? Or is there anywhere that you're maybe exceeding that number or falling short?

Yes. I think you're right. I think new deals in Q1 were 14, but I think the sequential growth when you look at all subscriptions for Q1 compared to Q2, had some minimal gain there. Average deals sold in Q2 were about $12,000. I think it's $12,039 is what the number was. So yes, sequentially a little down, but it's really not a benchmark that we're looking at as a barometer to suggest that our subscription business is healthy or not. Some of that comes weighted into larger deals that happened during the quarter. I think for us, the more salient thing is for us to look at the frequency. How many are we getting? What is the demographic profile and where are they coming from? And one of the things we didn't touch on in our prepared remarks that I think it's worth noting in this is that we, as a market place in the corporate communications, investor relations and public relations space, have an industry CAGR of single digits. And there is a tremendous amount of what we call internally white space in the market to where we can go find new opportunities where our peers and competitors are not. And we've identified several of those places, and that's where we get the confidence and where we'll be able to grow this number and the quarters to come is because there's areas that the industry is just not focused on that we've identified and that we believe that we can be successful there, that's going to drive and fuel a good amount of our growth over the next several quarters and into the next couple of years. So I'm not concerned about the number being different sequentially. It, year-over-year is higher, and I think that's the important barometer for us. And lastly, I think the reality for us is we've got to get stickier, right? We've got to continue to have feature advancements and get to our customers and be talking to them and do case studies and white papers and -- we just have not been able to do that in Q2, but we're focused on trying to achieve that here in the back half of the year.

Got it. That's really helpful. And then maybe just to touch on kind of Luke's question from the last one here. The social media partnerships that you guys announced in the second half here, that should be coming. Maybe help us kind of understand, what does this do for your customers? How does that kind of change the overall -- the value prop for them?

Yes. I don't want to profess -- I'm going to use an analogy here, and I don't want to profess that we are them. But we're taking a very Apple-esque model to this. We don't -- we have not been first to market in social media, right? Like a lot of things that Apple do really well. They let others go do it first. We've looked at what Cision did, for example. Cision, I think at last count, spend $500 million to $600 million buying social media platforms, trying to integrate it into Cision. And when you go to Cision today to draft a press release or monitor media or a pitch, there's 6 or 7 different platforms to log into. So the customer has no value to this. And so -- the reason why I bring this up is that if we're going into SMBs or established enterprises, everybody has to make the assumption and understand in this industry that the customer has already long picked their social media platform, right? Corporate communications and other departments in the organization that have that budget have already picked their tools, right? They're already integrated their enterprise into whatever social media monitoring, pitching an analytics system they've got. It really would be very shortsighted of us to believe that we could build something that they would want to buy, in materiality or two, even integrate somebody else's solution to believe that we're going to get them to change. So the focus that we've had on our product team is go out and find the top 3 social media platforms in both SMB and enterprise use and partner with them. So the reality would be is the customer in the back half of the year will log into their ACCESS Newswire platform, and they'll be prompted to connect those tools automatically with single API sign-ups. And then we'll be able to share and pull analytics back and forth between those systems to create an environment in which we're not asking them to switch or change. And that they don't have one of those tools, and they want to subscribe, we'll have a part of referral agreement with them that they'll be able to create an account on the fly automatically. We believe that's the best approach. To be fair, we're not in the business of wanting to [ dilute ] our shareholders and raise tens of millions of dollars to try and buy some social start-up company. The risk factor just doesn't meet our profile for investment. And we think this strategic side of partnering is the best way to the approach this.

Okay. Maybe just last one. I think the 1,500 customer target by year-end is kind of a new metric or a new kind of detail that you've given us. Maybe help us kind of think through that in terms of what that means for ARR. Do you expect most of those to be new customers? Do you expect them to be more transition customers from the from existing? Or just kind of help us think through that?

Yes. I think it's 70-30 for growth, with 70% coming from new, 30% coming from current customers that are upgrading and/or converting from single [ paygo ] solutions that they've had in the past. I think that is a big -- going to be a big driver. It is an aggressive number, right? We said that a year ago what the goal was. Look in hindsight, you look at your customer account numbers, we had compliance customers in there that were subscribers during that time. And so when you pull the numbers back, it is an aggressive target for us to hit. But we think both the social media partnerships and add-ons that we're going to bring and the additional things will drive some customer activity. And we do have some new platforms like pressrelease.com that's scheduled to be rereleased at the end of this month or early next month that we feel like will fuel our opportunities to find customers that are willing to pay into the subscription model.

Okay. Got it. Very helpful. I appreciate the details here guys.

Yes. Thank you. I think I missed the ARR add on. Will the number get to 15, I think it was our goal by the end of the year, right? I think we'll come really close. I think it's both are aggressive numbers. Feature product add-on is going to be key to us to be able to get to that point. And look, and if we see something changing in the next quarter, we'll definitely message that. But at this time, we're seeing the opportunities for us to get there.

[Operator Instructions] I'd like to turn the call back over to Brian Balbirnie for any closing comments.

Thank you, Alex. We're pleased with where we're headed, and we have a clear focus and strategy and where we're going here this year and into next year. We know the revenue growth is the ultimate barometer, and getting the business to scale is paramount. We will deliver on this, and we will continue to see these levels of gross margins, expand the cash flow from operations and EBITDA percentages back to where we all want them to believe -- where we want them to be in the next couple of quarters. Thank you all. Have a good day.

Thank you, ladies and gentlemen. This does conclude today's call. You may disconnect your lines at this time, and have a wonderful day, and we thank you for your participation.