Executive Summary / Key Takeaways

• Strategic Transformation Underway: ACCESS Newswire (ACCS) has undergone a significant rebrand and divested its compliance business, refocusing entirely on its communications platform for public relations (PR) and investor relations (IR) to drive long-term, sustainable growth.
• Subscription Model Driving Value: The company is rapidly transitioning to a subscription-first model, with new subscriptions in Q1 2025 averaging $14,059 in Annual Recurring Revenue (ARR), exceeding its year-end guidance. ACCS aims for 1,500 total subscriptions by year-end and expects to achieve 75% recurring revenue by the end of 2025, well ahead of its 2026 target.
• Operational Efficiency & Profitability Gains: Despite a slight revenue decline in Q2 2025 due to market volatility, ACCS demonstrated strong operational improvements, with gross margins reaching 76% in Q2 2025 and Adjusted EBITDA increasing to $836,000, driven by headcount optimization and AI-powered tools.
• Technological Edge & Innovation: Proprietary AI tools like the "press release content validator" (expected 10% efficiency gain) and an enhanced AI writer (AIMee) are differentiating ACCS, with a vision to create a "centralized communications ecosystem" for comprehensive storytelling.
• Competitive Momentum: ACCS is gaining market share in a retracting industry, seeing increased pipeline, pricing improvements, and inbound customer interest, positioning itself as a strong contender against larger, more generalized players.

A New Chapter: ACCESS Newswire's Focused Communications Strategy

ACCESS Newswire Inc., formerly known as Issuer Direct Corporation, has embarked on a profound strategic transformation, culminating in its rebrand on January 27, 2025. This pivotal shift saw the company divest the majority of its compliance business on February 28, 2025, for $12.5 million, significantly reducing its debt by 78% and streamlining its operations. The move signals a clear commitment to becoming a "focused lean communications business," concentrating solely on the dynamic and evolving market for public relations and investor relations solutions.

The company's core business now revolves around a dynamic customer platform that empowers businesses to connect, engage, and build their brands. This platform is designed to streamline PR and IR, helping organizations manage events, enhance communication, and strategically distribute messaging to key stakeholders worldwide. ACCESS Newswire primarily targets small and mid-market private and public companies, defined as those with between 2 and 2,000 employees. This strategic focus allows ACCS to tailor its offerings and compete effectively in a segment often underserved by larger, more generalized providers.

Technological Differentiation and the Future of Storytelling

At the heart of ACCESS Newswire's strategy lies its commitment to technological innovation, which serves as a critical differentiator and competitive moat. The company's cloud-based platform underpins its entire suite of services, offering a robust and scalable infrastructure for its diverse product lines.

A key technological advancement is the press release content validator, an internally developed, industry-first enhancement to its editorial process. This proprietary language model detects keywords, phrases, and acronyms that might violate content guidelines or network policies, flagging them for review. This tool is already yielding significant internal benefits, with management expecting up to a 10% efficiency gain for its editorial teams, allowing them to handle greater volumes without compromising quality. The company plans to make this feature available to customers in the latter half of 2025, enabling them to "pre-validate their voice in the press release" and ensure compliance before submission.

Complementing this is AIMee, an enhanced AI writer and recommendation engine, designed to improve message tonality and project engagement across various audiences. This AI-powered capability helps customers craft more impactful communications, a crucial advantage in today's crowded media landscape. The Webcaster Platform, another core technology, is a cloud-based solution for live and on-demand streaming of events, capable of hosting thousands of webcasts annually. This platform's architecture provides significant operational efficiency and scalability for virtual meetings, earnings calls, and investor events.

Furthermore, ACCESS Newswire's investor relations content network offers a robust series of data feeds—including news, stock, fundamentals, regulatory filings, and corporate governance—aggregated from major exchanges globally. The clear benefit of this network is its deep integration with other offerings, allowing companies to automatically link publicly distributed content to their corporate websites and targeted groups. The Media Room product, with its custom newsroom page builder and brand asset manager, directly addresses the needs of journalists who, according to a 2023 TekGroup survey, highly value media rooms with digital media, press kits, and video.

Looking ahead, ACCESS Newswire envisions its platform evolving into a "centralized communications ecosystem." This ambitious vision aims to allow customers to create, enrich, post, target, and monitor messages across all mediums, extending beyond traditional press releases. The product and development teams are also working on an "industry-first advancement" to narrow stories into an editorial format that brings a company's views and missions to life in a "near real-time spokesperson-ish kind of way." These innovations are designed to solidify growth channels, enhance customer value, and significantly differentiate ACCS in the market.

Competitive Landscape and Strategic Positioning

ACCESS Newswire operates in a competitive, yet evolving, market for PR and IR services. The company positions itself as a specialized, mid-tier player with a strong appeal to small and mid-market clients seeking integrated, compliance-oriented solutions. While the overall newswire industry is experiencing retraction in both revenues and volumes, ACCESS Newswire is notably growing its PR volumes and revenues, establishing itself as the #3 volume player in the market. This counter-cyclical growth, coupled with "pipeline, pricing improvements and the number of inbound customers interested almost at an all-time high," underscores the effectiveness of its focused strategy.

Comparing ACCESS Newswire to its key competitors reveals distinct advantages and areas of focus:

• Against Cision (CISN): Cision offers a broader suite of media intelligence and PR software. ACCESS Newswire's streamlined, user-friendly platform and efficient event production, particularly for IR-specific services, provide a qualitative edge for its target market. While Cision excels in the depth of media monitoring and analytics due to its scale, ACCS's integrated, compliance-oriented ecosystem and specialized tools (like the retained NYSE-subsidized whistleblower hotline) foster strong loyalty in niche regulatory environments.
• Against OTC Markets Group (OTCM): OTCM, through GlobeNewswire, is a strong competitor in news dissemination. ACCESS Newswire differentiates with more tailored tools for event management and shareholder communications, such as its professional conference software and Webcaster Platform, offering greater operational efficiency for virtual meetings. ACCS's focus on compliance and webcasting makes it a more versatile partner for integrated IR solutions, whereas OTCM emphasizes trading-related services and broader market visibility.
• Against R.R. Donnelley & Sons Company (RRD): RRD provides a wide range of commercial printing and digital communication services. ACCESS Newswire's cloud-based platforms offer more advanced, user-intuitive features for virtual events and digital-first IR solutions. This technological agility allows ACCS to exploit RRD's legacy operations and exposure to print industry declines, positioning ACCS for stronger cash flow from its subscription model.

The company's strategy to convert existing "value pack" customers (who currently purchase bundles of press releases) into subscription clients is a key driver for its growth. Management also notes "very acquisitive tones" in the market, suggesting potential for strategic M&A that could further bolster its competitive standing.

Financial Performance and Liquidity: A Leaner, More Efficient Engine

The strategic divestiture and rebrand have significantly impacted ACCESS Newswire's financial profile, leading to a leaner, more efficient operational structure.

For the three months ended June 30, 2025, total revenue from continuing operations was $5.621 million, a 7% decrease from $6.020 million in the same period of 2024. For the six months ended June 30, 2025, revenue was $11.097 million, down 4% from $11.592 million year-over-year. This decline is attributed to "less public company activity in the period," which management believes is a market-driven volatility that will improve later in the year. Despite the overall revenue dip, the core press release business saw an 8% increase in volume for the three months ended June 30, 2025, even as revenue decreased 4% due to product mix.

Crucially, profitability metrics show strong improvement. Gross margin percentage increased to 76% for the three months ended June 30, 2025, and 77% for the six months, compared to 77% and 76% respectively in the prior year periods. Management expects gross margins to remain robust, trending between 75% and 78% for the remaining quarters, driven by staff realignment and operational optimization from tools like the press release content validator. The operating loss for the three months ended June 30, 2025, significantly narrowed to $249,000 from $531,000 in the prior year, reflecting these efficiency gains.

Adjusted EBITDA from continuing operations saw a substantial increase, reaching $836,000 for the three months ended June 30, 2025, up from $528,000 in the same period last year. This improvement highlights the positive impact of cost reductions and operational streamlining post-divestiture. The sale of the compliance business also generated a significant gain, contributing $5.916 million to net income from discontinued operations for the six months ended June 30, 2025, and enabling a 78% reduction in the company's long-term debt.

Liquidity and cash flow generation are also strengthening. Cash generation from continuing operations increased to $809,000 in Q1 2025 from $77,000 in Q1 2024. Adjusted free cash flow for Q1 2025 was $1.029 million, a significant turnaround from negative $126,000 in Q1 2024. While current liabilities from continuing operations exceeded current assets by $2.61 million as of June 30, 2025, management expresses confidence in its ability to renegotiate its credit agreement and continue generating cash. The company's Revolving Line of Credit (LOC) stands at $1.50 million, with no outstanding balance as of June 30, 2025.

Outlook and Strategic Initiatives

ACCESS Newswire's management has provided clear, ambitious guidance for the remainder of 2025, underpinned by its strategic transformation and technological roadmap. The company aims to reach 1,500 total subscriptions by the end of the fiscal year, a target heavily reliant on the continued success of its ACCESS PR platform. This offering, which typically starts at $9,000 ARR and can tier up to over $17,000, is expected to be the primary driver of subscription growth, already accounting for approximately 75% of current subscription revenues.

The company has already surpassed its guidance for new average recurring revenue (ARR), with new subscriptions signed in Q1 2025 averaging $14,059, a substantial increase from $9,300 in Q1 2024. Management anticipates being "very close" to deriving 75% of its revenues from recurring subscriptions by the end of 2025, significantly ahead of its initial 2026 target. This accelerated timeline reflects strong execution in converting customers to its platform model.

Key strategic initiatives for the remainder of 2025 include:

• Expanding products and adapting to industry changes.
• Expanding its customer base and newswire distribution.
• Investing in technology advancements and upgrades, including the further development of its AI-powered tools and the "storytelling platform" vision.
• Evaluating acquisitions in areas of strategic focus.
• Generating profitable sustainable growth and robust cash flows from operations.

To support these initiatives, ACCESS Newswire plans to invest in its sales and marketing teams, with "likely two to three new salespeople to be added this quarter" and additional marketing headcount. This targeted investment aims to accelerate business growth now that the rebranding and divestiture are complete.

Risks and Considerations

While ACCESS Newswire's strategic shift presents a compelling growth narrative, investors should consider several risks. The company remains susceptible to market-driven volatility, particularly affecting public company activity, which can impact revenue from its core press release business. Broader global economic and political uncertainties, including conflicts, inflation, and rising interest rates, could also influence demand for its services.

The company's current liabilities exceeded current assets by $2.61 million as of June 30, 2025, a situation management believes is manageable through cash generation and credit agreement renegotiation. Additionally, the recently enacted One Big Beautiful Bill Act (OBBB Act) regarding R&D expenditures is currently being evaluated for its potential effects on the company's financial statements.

Conclusion

ACCESS Newswire is undergoing a profound transformation, shedding its legacy compliance business to emerge as a focused, technologically advanced communications powerhouse. The strategic rebrand, coupled with a relentless pursuit of subscription growth and AI-driven innovation, positions the company for a compelling future. Its ability to grow volumes and revenues in a retracting industry, coupled with significant improvements in gross margins and Adjusted EBITDA, demonstrates the initial success of its leaner, more efficient operating model.

With ambitious targets for subscription growth and recurring revenue, supported by a clear technological roadmap and planned investments in sales and marketing, ACCESS Newswire is actively building a formidable competitive moat. The company's integrated platform and specialized IR/PR tools offer a differentiated value proposition, particularly for the underserved small and mid-market segments. While market volatility and liquidity management warrant attention, ACCESS Newswire's strategic rebirth and commitment to technological leadership present a compelling investment thesis for those seeking exposure to a dynamic player in the evolving digital communications landscape.