NRC HEALTH (NRC) Business

Item 1. Business

Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can generally be identified as such because the context of the statement includes phrases such as National Research Corporation, doing business as NRC Health (“NRC Health,” the “Company,” “we,” “our,” “us” or similar terms), “believes,” “expects,” “may,” “could,” “anticipates,” “estimates,” “plans,” “creates,” “intends,” or the use of words such as “would,” “will,” “may,” “could,” “goal,” “focus,” or “should,” or other words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. In this Annual Report on Form 10-K, statements regarding the value and utility of, and market demand for, our service offerings, future opportunities for growth with respect to new and existing customers, our future ability to compete and the types of firms with which we will compete, future consolidation in the healthcare industry, future adequacy of our liquidity sources, future revenue sources, future revenue, expenses, and margins, future revenue estimates used to calculate total recurring contract value, the expected impact of economic factors, including interest rates and inflation, future capital expenditures, and the timing, amount, and sources of cash to fund such capital expenditures, future stock repurchases and dividends, the expected impact of pending claims and contingencies, the future outcome of uncertain tax positions, our future use of owned and leased real property, and the expected impact of global conflicts, among others, are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which could cause actual results or outcomes to differ materially from those currently anticipated. Factors that could affect actual results or outcomes include, without limitation, the following factors:

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Shareholders, potential investors, and other readers are urged to consider these and other factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included are only made as of the date of this Annual Report on Form 10-K and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as required by the federal securities laws.

General

For nearly 45 years, NRC Health has led the charge to humanize healthcare and support organizations in their understanding of each unique individual. NRC Health’s commitment to Human Understanding® helps leading healthcare systems improve their operations through understanding each person they serve not as point-in-time insights, but as an ongoing relationship. Guided by its uniquely empathic heritage, NRC Health’s patient-focused approach, unmatched market and consumer preferences research, and action-oriented enablement solutions are transforming the healthcare experience, creating strong outcomes for patients and entire healthcare systems.

Our expertise is Human Understanding®. We believe that every healthcare encounter is fundamentally a human experience. That’s why our holistic healthcare experience management framework is designed to drive the most human healthcare experiences for everyone. Patients. Consumers. Clinicians. Employees. Communities. Our comprehensive platform includes a next-generation suite of Artificial Intelligence (“AI”)-enabled products that create a natural way to collect, analyze, and deliver feedback. By leveraging advanced technology and deep insights, we ensure each interaction becomes a meaningful moment of connection and care.

Our ability to measure what matters most and systematically capture, analyze, and deliver insights based on self-reported information from patients, families, and consumers is critical in today’s healthcare market. We believe access to, analysis of, and acting on our extensive individual-driven information is increasingly valuable as healthcare providers need to better understand and engage the people they serve to create long-term relationships, build loyalty, and improve processes.

Our expertise includes efficient capture, transmittal, analysis, and interpretation of critical data elements from millions of healthcare consumers and thousands of clinicians. Using our solutions, our healthcare system customers gain insights into what people think and how they feel about their organizations in real-time, allowing them to build on their strengths and implement service recovery with greater speed and personalization. We also provide legacy experience-based solutions and shared intelligence from industry thought leaders and the nation’s largest member network focused on healthcare governance and strategy to member boards and executives.

Our portfolio of subscription-based solutions provides actionable information, analysis, and workflow enablement tools to healthcare organizations across a range of mission-critical, constituent-related elements, including patient experience, service recovery, care transitions, employee engagement, reputation management, rounding, and brand loyalty. We partner with customers across the continuum of healthcare services and believe this cross-continuum positioning is a unique and an increasingly important capability as the evolving healthcare landscape drives its constituents towards a more collaborative and integrated service model.

We have a broad and diversified customer base that is distributed across the United States. Our ten largest customers collectively accounted for 20%, 17%, and 15% of our total revenue in 2025, 2024, and 2023, respectively.

We believe we have achieved a market leadership position through our nearly 45 years of industry innovation and experience, as well as our long-term, recurring revenue relationships (solutions that are used or required by a customer each year) with many of the healthcare industry’s largest organizations. Since our founding in 1981, we have focused on meeting the evolving information needs of the healthcare industry through internal product development, as well as select acquisitions. We are a Delaware corporation headquartered in Lincoln, Nebraska.

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Human Understanding Solutions

Healthcare experiences are human experiences. NRC Health has built a comprehensive experience management stack to create a differentiated platform with the goal of driving the most human healthcare experiences for everyone – from patients and caregivers to consumers and communities.

Our digital solutions consist of four primary solution categories – Patient Experience, Consumer Experience, Employee Experience, and Market Experience –which can be implemented both collectively as an enterprise solution or individually to meet specific needs within the organization.

Market Experience Solutions – Our Market solutions are subscription-based services that allow for improved tracking of awareness, perception, and consistency of healthcare brands; assessment of competitive differentiators; and enhanced segmentation tools to evaluate the needs, wants, and behaviors of communities through competitive assessments. Market Insights is the largest U.S. healthcare consumer database of its kind, measuring the opinions and behaviors of approximately 300,000 healthcare consumers across the contiguous United States annually. Market Insights is a syndicated survey that provides customers with an independent third-party source of information that is used to evaluate market position, brand performance, and consumer choice drivers. Our Market solutions provide customers with on-demand tools to measure brand value and build brand equity in their markets, evaluate, and optimize advertising efficacy and consumer recall, and tailor research to obtain voice of customer feedback to drive branding, growth, and service line initiatives.

Patient Experience Solutions – Our Patient Experience solutions are provided on a subscription basis via a cross-continuum multi-mode digital platform that collects and measures data and then delivers business intelligence that our customers utilize to improve patient experience, engagement, and loyalty. Patient experience data can also be collected on a periodic basis using Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) compliant email, mail, and telephone survey methods for regulatory compliance purposes and to monitor and measure improvement in CAHPS survey scores. CAHPS survey data can be collected and measured as an integrated service within our digital platform or independently as a legacy service offering.

Our Patient Experience solutions provide healthcare systems with the ability to receive and act on customer and employee feedback across all care settings. Experience solutions include patient experience, insights, discharge call workflows, rounding, and other frontline enablement tools. These solutions empower our customers to comply with regulatory requirements and to improve their reimbursement under value-based purchasing models. More importantly, our Patient Experience solutions provide quantitative and qualitative feedback, improvement plans, and coaching insights. By illuminating the complete care journey, our customers can ensure each individual receives the care, respect, and experience they deserve. Developing a longitudinal profile of what healthcare customers want and need allows for organizational improvement and increased customer loyalty.

Our Patient Experience solutions also include tools to drive effective communication between healthcare providers and patients in the critical 24-72 hours post discharge using an automated discharge call workflow supported by our digital platform. Through preference-based communications and alerts, these solutions enable organizations to identify and manage high-risk patients to reduce readmissions, increase patient satisfaction, support safe care transitions, and reduce costs. Tracking, trending, and benchmarking tools isolate the key areas for process improvement allowing organizations to implement changes and reduce costly future readmissions.

Employee Experience Solutions – Employee Experience is a leading indicator of patient experience. Our Employee Experience solutions combine healthcare expertise with advanced technology to strengthen that connection. Our approach includes engagement, pulse, lifecycle, Culture of Safety, and Magnet RN Satisfaction—plus employee rounding that encourages open conversations and uncovers insights beyond surveys alone. Unlike traditional platforms that take months, our solution focuses on enabling in mere weeks, empowering managers and teams with valuable feedback data while the feedback is still meaningful. By unifying patient, employee and Culture of Safety data into an actionable dashboard, leaders can also gain a holistic view that breaks down silos and uncovers patterns to improve workforce wellbeing, enhance patient safety, and drive better outcomes.

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Consumer Experience Solutions – Our Consumer Experience solutions help build loyalty, support organizations in winning and retaining more patients, and reduce friction across the healthcare journey.

A key component of Consumer Experience is our Online Reputation solutions, which enable healthcare organizations to share an accurate and transparent picture of their performance and ensure that timely and relevant content informs better consumer decision-making. Our star ratings solution enables our customers to publish verified five-star reviews and comments derived from patient survey data to complement their online clinician profiles. Sharing this feedback not only results in better-informed consumer decision-making but also supports new patient acquisition and strengthens online clinician reputation. Our review monitoring solution alerts our customers to new reviews on third-party websites and provides workflows for response and service recovery. In addition, our listings management capabilities help ensure clinician and location information remains accurate and consistent across leading consumer and healthcare websites. Using automation and AI-driven recommendations, the offering identifies inconsistencies, surfaces suggested updates, and enables customers to maintain a current and reliable digital presence with little manual effort.

Consumer Experience also includes Community Insights and cross-journey listening through nGage, which bring scalable consumer perspectives into strategic and operational decision-making. Community Insights delivers custom research studies in just a few weeks, helping healthcare leaders identify consumer behaviors, needs, expectations, and experiences. Through nGage, organizations can gather continual feedback across digital and in-person touchpoints, enabling a more complete view of the consumer journey and supporting the design experiences that advance Human Understanding®.

Huey AI - Healthcare experiences are human experiences. Huey, our AI engine built for Human Understanding®, serves as a healthcare experience management companion. Embedded in our integrated experience platform, Huey helps customers make sense of experience data faster, taking on time-consuming tasks so teams can spend more time coaching, strategizing, and focusing on the human side of healthcare.

Governance Solutions

Our Governance Solutions, branded as The Governance Institute (“TGI”), serves not-for-profit health system boards of directors, executives, and physician leadership. TGI’s subscription-based, value-driven membership services are provided through national conferences, publications, advisory services, and an online portal designed to improve the effectiveness of hospital and healthcare systems by continually strengthening their board governance, strategic planning, peer networking, medical leadership, management performance and customer loyalty. TGI also conducts research studies and tracks industry trends showcasing emerging healthcare trends and best practice solutions of healthcare system boards across the country. TGI thought leadership helps our customer board members and executives inform and guide their organization’s strategic priorities in alignment with the rapidly changing healthcare market.

Growth Strategy

We believe that the value proposition of our current solutions positions us to benefit from multiple growth opportunities. We believe that we can grow revenue and earnings through (1) increasing scope of services and sales of our existing solutions to our existing customers (or cross-selling), (2) winning additional new customers through market share growth in existing market segments, (3) developing new solutions and expanding use cases to new and existing customers, and (4) pursuing acquisitions of, or investments in, firms providing products, solutions or technologies which complement ours.

Increasing contract value with existing customers. Our Sales and Customer Strategy teams actively identify and pursue cross-sell opportunities for customers to add additional solutions to accelerate our growth and their success. Organic contract value growth is also realized by the increased scope of solution adoption as the size of customer organizations increases from market expansion and consolidation.

Adding new customers. We believe that there is an opportunity to add new customers across all solutions. Our sales organization is actively identifying and engaging new customer prospects with a focus on demonstrating the economic value derived from adopting the portfolio of solutions in alignment with the prospect’s strategic objectives.

Adding new solutions and use cases. The need for effective solutions in the market segments that we serve is evolving to align with emerging healthcare trends. The evolving market creates an opportunity for us to introduce new solutions that leverage and extend our existing core competencies, as well as develop new use cases for new market segments. We believe that there is an opportunity to drive sales growth with both existing and new customers, across many market segments, through the introduction of new solutions and expanded use cases.

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Pursue strategic acquisitions and investments. We have historically complemented our organic growth with strategic acquisitions, having completed eight such transactions since 2001. These transactions have added new capabilities and access to market segments that are adjacent and complementary to our existing solutions and market segments. We believe that additional strategic acquisition and/or investment opportunities will exist from time to time to complement our organic growth by further expanding our service capabilities, technology offerings, and end markets.

We generate the majority of our revenue from the renewal of subscription-based customer service agreements, supplemented by sales of additional solutions to existing customers and the addition of new customers. Our sales activities are carried out by our growth team staffed with professional, trained sales associates.

We engage in marketing activities that generate demand for our solutions, engage existing customers, and enhance our brand visibility in the marketplace. Strategic campaigns and programs focus on (1) ensuring coverage of prospective customers via targeted advertising and account-based campaigns, (2) elevating customer value and return on investment success stories to an executive level profile, (3) engaging key stakeholders with content, programming and events and (4) amplifying thought leadership through public and media relations programs that include earning placement in national media and trade publications, securing podium presentations at key industry events, and winning awards.

Competition

The healthcare information and market research services industry is highly competitive. We have traditionally competed with healthcare organizations’ internal marketing, market research, and/or quality improvement departments which create their own performance measurement and workflow tools, and with other firms which provide survey-based healthcare market research, performance assessment, and process improvement solutions. Our primary competitors among such firms include Press Ganey and Qualtrics, both of which we believe have significantly higher annual revenue than us, and several other organizations that we believe have less annual revenue than us. We also compete with market research firms and technology solutions which provide survey-based, general market research or voice of the customer feedback capabilities and firms that provide services or products that complement healthcare performance such as healthcare software or information systems.

We believe the primary competitive factors within our market include quality and focus of service, timeliness of delivery, unique service capabilities, the ability to release innovative solution updates, breadth of solutions, credibility of provider, industry experience, and price. We believe that our long-tenured focus on the healthcare industry, extensive portfolio of solutions, motivated sales force, thought and best practice leadership, and relationships with leading healthcare providers position us to compete in this market.

Although only a few of these competitors have offered specific services that compete directly with our solutions, many of these competitors have substantially greater financial, information gathering, and marketing resources than us and could decide to increase their resource commitments to our market. There are relatively few barriers to entry into our market, and we expect increased competition in our market which could adversely affect our operating results through pricing pressure, increased marketing expenditures, and market share losses, among other factors. There can be no assurance that we will continue to compete successfully against existing or new competitors.

We believe that our competitive strengths include the following:

A leading provider of patient experience solutions for healthcare providers and other healthcare organizations. Our history is based on capturing the voice of the consumer in healthcare markets. Our solutions build on the “Eight Dimensions of Patient-Centered Care,” a philosophy developed by noted patient advocate Harvey Picker, who believed patients’ experiences are integral to quality healthcare. This foundation has been enhanced through our digital platform offering that provides the delivery of data and insights to understand what matters most to each individual. Based on our nearly 45 years of experience, we are able to deliver unique and relevant healthcare domain expertise to the customers we serve.

Established customer base of leading healthcare organizations. Our customer portfolio encompasses a majority of the leading healthcare systems across the United States. Over 250 of the top 400 healthcare systems based on net patient revenue are currently using one or more of our solutions. Our customer base provides a unique network effect to share best practices among existing customers and to attract new customers. Our existing customer base also provides a significant organic growth opportunity to upsell and cross sell additional solutions.

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Highly scalable and visible revenue model. Our solutions are offered primarily through fixed price, subscription-based service agreements. The solutions we provide are also recurring in nature, which enables an ongoing relationship with our customers and favorable retention. This combination of subscription-based revenue, a base of ongoing customer renewals and automated platforms creates a highly visible and scalable revenue model.

Comprehensive portfolio of solutions. Our portfolio of subscription-based solutions provides actionable information and analysis to healthcare organizations across a range of mission-critical, constituent-related elements, including patient experience, service recovery, care transitions, employee engagement, reputation management, and brand loyalty. Our end-to-end solutions enable our customers to understand what matters most to each person they serve – before, during, after, and beyond clinical encounters – to gain a longitudinal understanding of each individual. We partner with customers across the continuum of healthcare services and believe this cross-continuum positioning is a unique and an increasingly important capability as the healthcare industry evolves towards a more collaborative and integrated service model.

Exclusive focus on healthcare. We focus exclusively on healthcare and serving the unique needs of healthcare organizations across the continuum, which we believe gives us a distinct competitive advantage compared to other analytics and software providers. Our value proposition incorporates the benefits to customers derived from our deep subject matter expertise that has been built from helping healthcare organizations for nearly 45 years. Our platform includes features and capabilities built specifically for healthcare providers, including a library of performance improvement content which can be tailored to the provider based on their specific customer feedback profile.

Experienced senior management team. Our senior management team has extensive industry and leadership experience. Trent Green was appointed as our Chief Executive Officer and to serve as a director, both effective June 1, 2025. Mr. Green brings more than 25 years of healthcare leadership experience, most recently serving as Chief Executive Officer of Amazon One Medical and previously as Chief Operating Officer of Legacy Health. Helen Hrdy was appointed as our Chief Operating Officer in October 2024. Prior to this position Ms. Hrdy served as our Chief Customer Officer since January 2024, Chief Growth Officer for three years and our Senior Vice President, Customer Success, for eight years. Andy Monnich has served as our Chief Corporate Development Officer since January 2024. Mr. Monnich has worked in product and corporate development in the healthcare, financial services, and education industries, including for the Company as Senior Vice President - Strategy and Corporate Development, as Managing Director and Co-Founder of Connect, and as Chief Strategy Officer at Practicing Excellence. Shane Harrison began serving as our Executive Vice President and Chief Financial Officer effective September 29, 2025. Mr. Harrison has worked in finance and strategic planning, most recently serving as Senior Vice President – Corporate Finance and Investor Relations at PowerSchool, a leading K-12 education SaaS provider. Jason R. Rau has served as Executive Vice President since October 2025. Mr. Rau has held a variety of leadership roles at the Company, including in sales, operations, strategy, and corporate development, and previously served as Chief Growth Officer of Nobl and as Executive Vice President, Business Development of Practicing Excellence. In addition, our founder and Chairman, Michael D. Hays, provides significant continuity and perspective based on his 45 years of experience leading the Company.

Intellectual Property

Our success depends in part upon our data collection processes, research methods, data analysis techniques and internal systems, and procedures that we have developed specifically to serve customers in the healthcare industry. We have no patents for most of our intellectual property. Consequently, we rely on a combination of copyright and trade secret laws and associate nondisclosure agreements to protect our systems, survey instruments and procedures. There can be no assurance that the steps we have taken to protect our rights will be adequate to prevent misappropriation of such rights or that third parties will not independently develop functionally equivalent or superior systems or procedures. We believe that our systems and procedures and other proprietary rights do not infringe upon the proprietary rights of third parties. There can be no assurance, however, that third parties will not assert infringement claims against us in the future or that any such claims will not result in protracted and costly litigation, regardless of the merits of such claims or whether we are ultimately successful in defending against such claims.

Government Regulation

According to the Centers for Medicare and Medicaid Services (“CMS”), health expenditures in the United States were approximately $5.3 trillion in 2024, or $15,474 per person. In total, health spending accounted for 18% of the nation’s Gross Domestic Product in 2024. Addressing this growing expenditure burden continues to be a major policy priority at both federal and state levels. In addition, increased co-pays and deductibles in healthcare plans have focused even more consumer attention on health spending and affordability. In the public sector, Medicare provides health coverage for individuals aged 65 and older, while Medicaid provides coverage for low-income families and other individuals in need. Both programs are administered by CMS. With the aging of the U.S. population, Medicare enrollment has increased significantly. In addition, longer life spans and greater prevalence of chronic illnesses among both the Medicare and Medicaid populations have placed tremendous demands on the health care system.

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An increasing percentage of Medicare reimbursement and reimbursement from commercial payers has been determined under value payment models, based on factors such as patient readmission rates and provider adherence to certain quality-related protocols. At the same time, many hospitals and other providers are creating new models of care delivery to improve patient experience, reduce cost, and provide better clinical outcomes. These new models are based on sharing financial risk and managing the health and behaviors of large populations of patients and consumers. This transformation towards value-based payment models and increased engagement of healthcare consumers is resulting in a greater need for existing healthcare providers to deliver more customer-centric healthcare. At the same time, organizations that have successfully developed effective customer service models and brand loyalty in other industry verticals are entering the healthcare services market.

We believe that our current portfolio of solutions is uniquely aligned to address these healthcare market trends and related business opportunities. We provide tools and solutions to capture, interpret and improve the CAHPS data required by CMS as well as real-time feedback that enables customers to better understand what matters most to people at key moments in their relationship with a health organization. Our solutions enable our customers to both satisfy patient survey compliance requirements and design experiences to build loyalty and improve the wellbeing of the people and communities they care for.

Human Capital

As of December 31, 2025, we employed a total of 357 associates. None of our associates are represented by a collective bargaining unit. Most of our associates work remotely. Our goal is to help customers bring Human Understanding® to healthcare, for their patients and communities. Our associates are at the heart of achieving that goal, so we promise that same Human Understanding® to each other. We focus less on titles and more on the unique skills and perspectives each person brings to the organization. Our employment practices are based on the qualifications of each individual and appropriate job-related standards. We consider our relationships with our associates to be good.

We believe living Human Understanding® in the workplace is the job of every associate. Each associate is asked to take charge of their own education, self-awareness, opportunity, and growth. All leaders are expected to support associates in development efforts, leading their teams with Human Understanding®. We believe each associate and applicant should feel understood and welcomed.

Our Associate Experience team and Associate Lifecycle Belonging committee coordinate activities and opportunities for our associates on these topics, and act as advocates of a workplace culture full of Human Understanding®. As we focus on Human Understanding® in the workplace, we have considered what creating and cultivating a workplace full of Human Understanding® means. Our passions, pastimes, families, pets, politics, and communities impact how we see the world. This in turn impacts how we understand or misunderstand one another. We acknowledge that our efforts will be ongoing and must continually be re-evaluated.

Available Information

More information regarding NRC Health is available on our website at www.nrchealth.com. We are not including the information contained on or available through our website as part of, or incorporating such information by reference into, this Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are made available to the public at no charge through a link appearing on our website. We provide access to such materials free of charge through our website as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the Securities and Exchange Commission (the “SEC”). Reports and amendments posted on our website do not include access to exhibits and supplemental schedules electronically filed with the reports or amendments. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.