Welcome everybody. How is everybody? I am sorry I am late. I got stuck talking to a bunch of folks, and I couldn't get away. For the folks that don't know me, my name is Brian Balbirnie. I am the CEO of ACCESS Newswire, one of the founders of the company, and I hope to spend now about 18 minutes talking about the business, and then I will walk you through a quick question-and-answer session .
We all know what the forward statements are. We Don't need to read them. We are going to talk about who we are, what we do, why we do what we do, with a little bit of financial data on the screen for you to look at. Hopefully, you can see it easily. This will be available on our website this afternoon, and then any follow-up, I can email it to anybody.
Sequential revenue growth up 5% over the prior quarter. We are talking about Q2 numbers now, okay? We haven't reported Q3 numbers. ARR per subscription up 15%. We've gone to $12,718 per subscriber. We've got 1,100 and change subscribers on our platform today. Guided probably 1,300 to 1,500 by year's end. This is the convergence business that we'll talk about and what it is that we do.
We brought to market a lot of new products. Social monitoring. If you walk through the main lobby today, you see a big TV up there. There are 101 companies, all of which are presenting here today. We are tracking every social sentiment of each one of those companies, their symbols, their executives, and putting together sentiment scoring against each of them. We shamefully were at the bottom, and now we are at the top today. We'll see how it ends up for everybody.
I am going to pause there because those are the quick highlights. What is ACCESS Newswire and what does it do? You've likely seen us in the dateline of press releases that you read for public companies or even private companies that you read news on. We make money in two ways. The first is our investor relations subscription platform. Companies come to us to build their investor relations system, CMS system on their website. So wherever you visit ir.thatcompany.com, we power that for about 475 public companies. The growing large and mega cap is where our focus is today, compared to companies in the space here today. You think about Moderna, BlackBerry, Sherwin-Williams, Pinnacle Bank. Some of the largest brands in the world in every sector use us to power their IR systems, including their quarterly calls.
The calls that you listen to, that analysts are asking questions, that you may ask questions on, those are our operators. That's our infrastructure and our technology that does that. All of that revenue sits in our subscription business. So part of that 1,100 and change customers that we talked about are investor relations-focused customers, all public companies or de-SPACs or just new IPOs. Georgia Banking Company is a new one that's going public this week on Nasdaq. Been a client of ours for about 90 days. We built out everything for them in the IR capacity. On the other side of the fence is our public relations business. You typically will think PR as press releases. For us, it's public relations.
It's about a part of a press release, but it's more about what social monitoring, media monitoring, journalist pitching, journalist database, constituent pitching, and brand monitoring all collided into one platform that we sell to our public and private customers. When you think about ARR, I hate to use these acronyms and terms to be a SaaS-y business, but if you think about ARR for a customer in the public space that buys both of our solutions, they typically spend about $25,000 a year to have both. We'll talk about the reasons why of what that is. We went through revenue a little bit. Again, these are Q2 stale numbers, but we're in a position now that we're November 12th, that we'll print Q3 numbers.
We had messaged last quarter that we said to our shareholder base that we would return to growth in the back half of the year, increase our adjusted EBITDA, increase our subscriptions, and improve our gross margins.
I'm not going to tell you what the results of those are, but those are the four tracking things that we said that we would do for folks. I'm going to skip through some of the financial slide data a little bit. One of the things that I want to talk about here in gross margin, because I've been very high on increasing our gross margin percentages, and we've got two ways. Thank you. We've got two ways that we can lever this gross margin impact. One is the reality of life. It's AI. Can we automate the editorial process to save human headcount to look at press releases?
We'd all expect that we could do that, but we don't do that. The quality of the product that we put out for our customers, the ACCESS Verified content that you ingest is very important to us. That is an area that we could swell gross margins to 80% by going to AI or higher, but we're not going to do that.
We generate higher than average gross margins in the public relations space from a news distribution standpoint. The average last known that we could track was about 68%, is what it is for the most of them. We feel like we're doing a good enough job there. The second is rising distribution costs. This used to be a business that people loved content. It would take content. Now it's a pay-for-play game. We balance pay for play. You'll see gross margins jump around.
It was 75% the prior quarter. It was 73% last quarter. It will be 75% or 76% next quarter, and then down to 74% the quarter after that. You end up with distribution costs driving some of that, but you think of this as a mid to high gross margin business. Anybody that knows or looks at the market cap or is a shareholder in the room knows the business today continues to generate cash. Continues to have adjusted EBITDA earnings, continues to do buybacks to buy its own stock back, and continues to be at an all-time low on market cap value. I think there's contributing reasons as to why. One of the reasons why, about eight months ago, was the erosion of what one would typically think a SaaS subscription business to be, and they determined it to be called SaaSpocalypse.
Every single company that was in the SaaS business was getting eroded by market cap, and all of us as shareholders were selling off these businesses. We got stuck in a few of those, because I know several of our shareholders have left and exited the position because of the assumption that that's what we are. Although we use the term SaaS in our business, I would tell you, it's not software as a service, it's services as a service. It's our editors that are doing the work.
Our people are building our IR platforms for our customers and delivering the human capital for the engagement that we all do on earnings calls. It's a services-based software application. Without our people, customers can't do the work. I think we were displaced in an area that we shouldn't have been, and we're really not there.
It's my job to be sure that people understand that. This is a human capital business. Anybody that's in the room that services a public issuer knows that it's us that makes the business work. It's not the product, it's the people. That's the most important part of what we've got to continue to make sure people understand.
The second part is a slide that I'll talk about in a few minutes, that some of you have probably used in other industries. I may have the worst analogies, and I apologize if I do, but it really talks about what a melting ice cube looks like and what it is. Businesses that fit into what a melting ice cube is. We generate cash, like we said. We sit at about $3 million in cash on the balance sheet at any given time.
We spend about $1 million a year of our cash accumulation in stock repurchasing. We will likely continue to do that and evaluate areas to both invest in the business strategically to drive growth in the future, as well as continue to buy stock back at these levels, which is ahead of what I already said.
This buyback was put into place at the beginning of the year. I think if you read down on one of the bullets, as if I even gave you forward-looking guidance, as of Friday, the repurchase plan did 146,000 shares, about $977,000 of the $1 million, and approximately 4% of the issues outstanding. For folks in the room, that's good for us. We're taking out shares in the market that folks don't want, and we're reutilizing that and retiring it to treasury and not holding it on our balance sheet.
We're reducing the shares issued and outstanding. New product mix. We're clear on what the business does. We're the third to fourth largest news distribution outlet.
We are one of the highest consumption in-app rated PR platforms according to G2 now. What that means is a customer comes in, buys a press release, or has a subscription for press releases, and then turns around and buys some of these additional products that we have that I'll talk a little bit about. This in-app purchase helps us drive the average spend per customer, the average unit economic per transaction, and helps give the customer more defendability. I bring these five up because these are five that our competitors don't do. We've got about 14 inside of our ACCESS Toolbox today. The one is called ACCESS Verified. We don't charge a customer for ACCESS Verified.
When a customer comes in and distributes a press release with us for the first time or every time, but more particularly the first time, we analyze the industry and sector, the contact, the company, the information in the body of the press release, and a quick background and validation check on the business and the person that's in the contact of the press release. The reason why we do that is to thwart out any possible bad actors. Bad actors are folks that come to us trying to run a press release that says they're involved in XYZ company. Since I'm standing on stage where a Tesla guy did his pitch last night, we'll say Tesla, and they've invented something new, but yet they have an email address that gives you the impression you think it's Tesla.
The number of press releases that come to market from a bad actor every single day is growing significantly. The ACCESS Verified solution ensures that we deliver accurate content to our distribution partners, that us as readers can know that it's been trusted and validated. The next one that we released here just recently was the ACCESS Events platform. It is our event booking management system, earnings call platform, and earnings advisory system all wrapped up into one.
Anybody here a public issuer or do work for public issuers? Got a couple. Here's the benefit. Today, this is no discredit to any other vendor, regardless of who they are. You call your webcast company and say, "I'm going to do earnings on the 12th of November." They deliver you a URL and a phone number with a bunch of pins.
You then call your IR person, and you build a press release for it. Then you call some other vendor and supplier to do something else. Then maybe an 8-K or a 6-K gets added to that, and then you've got to figure out how to distribute that electronically to people.
Our ACCESS Events platform takes all of the individuals that you've ever met with in our system, automatically notifies them of the date and time and pre-registration for the event. It constructs an earnings advisory release for you automatically. It helps build the framework for your earnings release. It then sends that information to your compliance provider that does the 8-K, because remember, we're not in the compliance business anymore. And then it measures all of the analytics out of all of those actions of all of your shareholders and all of the journalists and media that do it.
You can do that in about 30 seconds. The cost of that is probably 10% less than what you're paying five or six other vendors, but the time value of money comes back to you in efficiency in what you get. That's what ACCESS Events is. There's an upgrade charge for that. Something that we're really pushing hard this year, and there's a reason why, is the ACCESS Toolbox. This is the first step of what we'll release by the end of this year to customers to give them the ability to build something more than just a press release. Because to be fair, a press release is nothing but words on a computer screen or on your phone that may or may not mean something to you today.
The problem that this industry has, to be fair, is that we are all measured by the number of units of press releases we put to market, not the value we provide to the customer. For the past six months, we've been looking at this, saying this race that we're in to have dominance over volume is the stupidest North Star that this entire industry could have. It determines success when it's not.
The success for what the customer wants is their outcome. Most of these customers running press releases don't understand what the outcome is, what they're looking to achieve. Our entire sales process has been reinvented in the past 90 days to turn around from the customer's perspective to say: What are you trying to achieve? What's your goal? We always forget about the most obvious thing, right?
Because us, as salespeople, we just want to sell. In this space, it's good to get customers, and it's good to generate revenue. We built a toolbox of systems to allow the customer to help build their outcome. If I'm a private company, I put my press release out. I don't know if my headline is the best headline, but I can flip a switch on, and the system will tell me. Customers now say to us, "How do we know that you're right?" We say, "Well, we've distributed like 1 million press releases, and we know the engagement of every single press release over the last 10 years of not only us, but every one of our competitors. We know exactly what people want to read. We know what journalists want.
We know what financial people want." They've got these tools to optimize their headlines, optimize their sub-headlines, optimize their content. For the financial folks in the room, you upload your earnings press release, and if any of you have gone through this, Eddie, I know you have, we tick and tie these things till we're crazy, right? Balance sheet income, cash flow statements. We do earnings per share, the tabular data compared to the textual data. We hope that our auditors or our CFOs catch everything at the 8-K, the press release, and the 10-Q has. Our audit analytics platform has been tested by 22 CPA-registered firms, 10 of which are PCAOB certified, and about 50 CFOs for the past six months.
You can inject your earnings press release to our platform, and we will tick and tie and verify every particular data point in that document in about a minute and a half. It gives you the added benefit of verification of data that you're sending to the wire is truthful, correct, and accurate. Because as a CFO, the last thing you want is to go to your CEO or board and say you missed a rounding error, and you actually made $0.11 a share in earnings, not a cent in share of earnings. All of these tools are available, some of which are free, some of which are add-ons and upgrades.
If we look back at our ACCESS Insights & Analytics report that we released about 120 days ago, about 11% of our current customers that come into our platform that don't subscribe to the product buy up for the ACCESS Insights & Analytics reports.
The point is that the business is being driven now more so than ever by outcomes. When you Googled yourself years back, Google was the place to go. It was all about SEO. If you're a business, it's about PPC. Today, that's not the case. It's all about AEO and GEO. It's all about listicles. It's all about ability for a customer to show up in a citation or a search when somebody asks something in an LLM prompt. We are the second verified provider of the most AI content from press releases in the entire market. PR Newswire is the first. They're great at it.
They're our competitor that we need to go after and do better. We're hopeful that these tools will help enable our customers to be able to provide the better quality information for us to improve that. That's where we're headed as a business is to find out what the outcomes are for what folks are looking for. Again, number of customers that buy our products on a recurring basis about 1,162 at the end of last quarter. I had messaged two things to the market that we would get to about $15,000 in ARR by the end of the year, and we would get to about 1,500 subscribers by the end of the year. Although this is forward-looking data, I'm here to tell you that those two numbers aren't going to be met. That's not going to happen.
Our subscriber numbers will probably hit about 1,300, 1,350. Our ARR number will continue to climb, and we'll get close to the $15,000 number. There's a reason why. We've deliberately brought down the price of our subscription platform and entirely changed how we sell it and why we sell it and who we sell it to. This market that we're here today servicing, we're all interested in finding the gem in the room, right? That one to five companies that we all can walk away with the conviction that says, "I love the guy. I love the business. I love the industry. I'm going to go invest." Maybe there's five. The other ones are trying, right? We don't sell to this space as much as we used to.
When we used to come to these events, I could say to Chris all the time, "Chris, 90 of the 100 companies are customers." Today, I can say that there's about 20. That's not for anything else than us being deliberate about where we're headed and what we're doing. By virtue of that, subscriber numbers come down. It is a marketplace that we're trying to not focus on as much as we have focused in the past. You'll look to see our subscription products be much different starting next year. They're going to begin about $249 a month paid annually compared to somebody paying $1,200 to $1,500 to $2,000 a month today. We firmly believe that there's scale in the business at that price point. We've done the research to show that.
We are going to have new KPIs and benchmarks for next year on where we believe that we go. My ops team will tell you, my sales team will tell you, they are significantly proud about this slide. I should actually have them come out from the booth and talk about this. When we entered the subscription business a couple of years ago, our retention probably was about 82%.
We were losing a significant amount, and every day we would sometimes lose more than we gained. In a very short time this year, we moved the number to 94. We are guiding that to about 96 by the end of the year, and we feel comfortable that we will get there based on what we are currently doing. Net dollar retention is a good barometer for you to be looking at for us. That number falls below 101, there is a problem.
We are at 104 at the end of Q2. We are probably consistent with that of where we are headed now for the back half of the year. Our recurring product services based business is about 60% of our overall revenue. By the end of 2027, we have said this, and we are very confident in this guidance number, that 80% of our revenue will come from that category. It makes our business easier to predict. It makes our ability to forecast much quicker, and our ability to pivot much faster.
What have we got? Industry tailwinds. Gartner came out with research that I talked about in Q2 that said that this industry was going to blow up because of AI. They published this report, and anybody from Gartner in the room, I am sorry. Anybody listening online, I am sorry, but the report was a rip-off.
We spent way too much money on this thing, and we got no data validity out of it. What they are really trying to say is the public relations industry, these little small mom and pop public relations firms, are set to explode, meaning they are going to be acquired and merged into larger enterprises to help service the space because AI is disrupting what these sole practitioners can do. It had absolutely nothing to do with our industry, even though their analysts said it did. If you take that a step back, we still firmly do believe in the last part of this, and I know a lot of you in the room identify with this. It is the Gen Z millennial generation and what we did 20 years ago compared to what we do today. It is much different.
The honorability of going to work 9:00 to 5:00, doing your 40, getting two weeks vacation, and getting a good salary is now being replaced with, "I will do that in a flex time, but in between, I got a side hustle here or there, maybe two or three of them." These folks, these individuals, are growing by significant numbers. Those folks are driving about a 12% increase in incorporations every single year for the past three years straight. Meaning the number of businesses that are incorporating in this country every single month, quarter, or year. We track that data. Those individuals that are starting new businesses get targeted by us, and that is where a good amount of our private company growth comes from today.
80% of the folks that we acquire in that space, it is all a side hustle. Every last one of them.
It's not a full-time business. It's not a merger of 10.
The majority is a side hustle business that somebody's trying to start to figure out if that can be the replacement income from the current career that they have today. We're going to continue to foster that. Nobody in our industry focuses on these individuals, so we feel like it's fertile ground for us to get there. I'm only bringing this slide up because I've been told this by five or six people over the past several weeks, is like, "I'm really worried that the wire business is a melting ice cube." When you sit there as somebody that runs a business in this space, you think, "Why do they think that?" Because when the Regulation Fair Disclosure Act was rewritten and Twitter came along, everybody thought wire businesses were done. The reality is I'm out of time.
I talk too much. The short place here is that everything that we're building is not a melting business. Melting businesses don't generate cash. Typically, melting businesses don't have good gross margin, and melting businesses don't have emerging customers in larger spaces. We do. Let's follow up on this. I'm down to one or two questions really quickly. I'm sorry. No questions. We got one. One. One minute, you guys. One minute. The presentation starts in five minutes.
Brian, real fast.
Yes.
You mentioned these fake PRs. I remember getting blindsided when somebody in 2006, years ago, had it happen. How in the world in this space are fake PRs coming through, still getting into the system?
They come through every single day. We probably stop about 10 a week.
How many have
Take the biggest company really quickly, UnitedHealthcare. Let's just use that name. Let's switch two letters in the domain and go register it, then build a footer that looks exactly like the email footer from somebody really at UnitedHealthcare. Let's send in a press release to a news provider saying you are the PR exec at UnitedHealthcare. When that salesperson looks at that, they are excited. They got UnitedHealthcare.
Sure.
Right? Editors are like, "Wow, we got UnitedHealthcare.
Fascinating.
What happens?
We are officially out of time. If you have any additional questions, if we could take those outside. Thank you so much.
Thank you.