Good day, everyone, and welcome to the National Research Corporation Fourth Quarter and Year-End 2023 Earnings Call. My name is Drew, and I'll be the operator on today's call. All participants will be in a listen-only mode. There will be a Q&A.

[Operator Instructions] At this time, I would like to turn the conference over to Kevin Karas, Chief Financial Officer. Please go ahead when you are ready..

Thank you, Drew, and welcome, everyone, to today's National Research Corporation Earnings Call. Joining me on the call today is Linda Stacy, our Vice President of Finance. Before we continue, I would like to ask Linda to review conditions related to any forward-looking statements that may be made as part of today's call.

Linda?.

Thank you, Kevin. This conference call includes forward-looking statements related to the company that involve risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated.

These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the facts that could affect the company's future results, please see the company's filings with the Securities and Exchange Commission. With that, I'll turn it back to you, Kevin..

doubling our total addressable market across market insights, patient experience, customer experience, and employee experience solutions, being essential to our clients' success by combining our unparalleled healthcare DNA and frontline coaching with innovative new technologies to deliver solutions with return on investment, helping more patients and healthcare providers by aggressively ramping up our sales efforts to gain market share, improving our associates' careers by automating routine tasks and focusing them on their most rewarding and productive activities and delivering more to stockholders through growth, margin expansion and returning excess capital.

National Research Corporation has achieved significant milestones against each of these goals. We have expanded our employee experience and consumer experience capabilities. Core revenue is over 90% of total revenue. Since mid-2022, the sales team has grown by over 20%, while at the same time, overall associate headcount has been reduced by 16%.

Our sales pipeline exceeds $100 million, and recurring new sales were up 18% in the fourth quarter of 2023 compared with the fourth quarter of 2022. From a productivity standpoint, our revenue per FTE was up 10% this year over last year. Our operating margin has improved throughout the year.

Our customer NPS, or Net Promoter Score, hit 75 in the last quarter, which is our highest ever and notable among the world's most respected brands. $55 million in dividends and stock repurchases were returned to stockholders in 2023, helping boost return on equity to 51% and we've distributed another $18 million to stockholders in January of 2024.

Metrics are important, but success in the market is the real test. Our recent win in Advocate Health, now our largest client, emphasized our ability to win a broad-based experience RFP that aligned with insights from customers, patients and employee experiences.

We would not have won without the breadth of solutions, deep healthcare DNA and value add to distinguish NRC from other competitors. Looking ahead, our outlook only gets better. In January, we added a new Chief Revenue Officer, Chief Product Technology Officer and Chief Corporate Development Officer to accelerate the plan going forward.

The executive team has endorsed an aggressive plan based on technology, pace and delivering value to customers. In summary, we believe NRC is well positioned in the market with the right team and strategy to drive meaningful growth and value. Now I'll now turn it over to Linda to discuss the financial results and outlook..

number one, expanding our total addressable market to serve customer needs across the experience continuum as they seek to constantly improve their strategies and execution relative to customer service, care delivery and employee satisfaction; number two, using technology, including AI, to regularly launch innovative products that generate return on investment for our customers through new customer acquisition, patient loyalty, reimbursement rates, retention and other outcomes; number three, accelerating sales pipeline growth and conversion; and number four, expanding efficiency and automation throughout our business to minimize [Audio Dip] our associates' talents to create more opportunity.

From a financial perspective, we expect 2024 earnings – revenue and earnings trends to start relatively flat year-over-year. Higher technology, sales and executive expenses will weigh on sequential margin performance until our expanded product suite and sales pipeline convert to revenue, which is expected to be later in the year.

As our plan matures beyond 2024, our goal is to produce double-digit revenue growth and expanded margins. From a capital allocation perspective, we purchased $15 million of stock and paid $3 million in dividends in January of 2024.

For the remainder of the year, we expect to focus on growth and innovation investments, including the building renovation as well as regular quarterly dividends. That concludes my comments for this morning. And now I'll turn the call back to you, Kevin..

Thank you, Linda. Before opening Q&A, I'd like to say this is likely my last earnings call. It has been a pleasure serving as CFO for the past 13 years and keeping our investors informed about the company. We have a really strong team in place, so you should have a very smooth transition. This completes our prepared remarks.

So Drew, I will now ask you to open the call to any questions..

Operator:.

We have no questions registered at this time. So I'll hand back over to Kevin for any closing remarks..

No, thank you, everyone, for attending our call today and the company looks forward to sharing results again next quarter. Thank you..

That concludes today's National Research Corporation fourth quarter and year-end 2023 earnings call. You may now disconnect your lines..