ACCESS Newswire Inc (ACCS) 2018 Q1 法說會逐字稿

Greetings, and welcome to Issuer Direct's First Quarter 2018 Earnings Call. (Operator Instructions) As reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Steve Knerr, Chief Financial Officer. Please go ahead, sir.

Thank you, and good afternoon, everyone. Brian and I would like to thank everyone for taking the time to participate in our first quarter earnings call today.

Before we begin, I need to read the following safe harbor statement. Statements or comments made on this conference call may be forward-looking statements that include financial projections or other statements of the company's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties. Our actual results may differ significantly from those projected or suggested in any forward-looking statements due to a variety of factors, which are discussed in detail in our recent SEC filings.

Further, we will discuss both GAAP and non-GAAP financial information on this call. We believe the presentation of non-GAAP information provides you with useful supplementary data concerning the company's ongoing operations and is an appropriate way for you to evaluate the company's performance. Non-GAAP results are, however, provided for informational purposes only. Please refer to the press release and related tables for GAAP information and a reconciliation of GAAP to non-GAAP information.

We also posted to our website, in our Investor Relations tab, a description as well as reconciliation of GAAP measures, to which we will refer on this call.

With that complete, I'll begin by going over our results for the quarter and then turn it over to Brian, who'll provide an operational review and outlook, followed by a Q&A session.

The first quarter was another positive quarter for Issuer Direct as we continue to build our Platform and Technology business. Jumping right into the results, total revenue increased 24% to $3,530,000 for the first quarter of 2018 as compared to $2,856,000 for the same period of the prior year. Revenue from customers obtained from our acquisition of Interwest Transfer Company totaled $418,000 for the first quarter, which is a slight increase over $404,000 reported in Q4 2017. Absent this revenue, organic growth for the quarter was 9%.

Led by our ACCESSWIRE offering, Platform and Technology revenue increased 25% to $2,032,000 for the first quarter of 2018 compared to $1,620,000 for the same quarter of the prior year. ACCESSWIRE revenue increased 31% for the quarter compared to the same period of 2017. In a few minutes, Brian will talk further about how we continue to make progress with this business by expanding distribution and increasing our sales team.

We also generated increased revenue as a result of our acquisition of Interwest and from increased licenses of Platform id. as we began focusing on selling complete subscriptions of the entire platform. During the quarter, we sold subscriptions of Platform id. to 29 new or existing customers at an annualized contract value of $322,000.

Services revenue increased 21% to $1,498,000 during the first quarter of 2018 compared to $1,236,000 during the same quarter of the prior year. This increase is primarily the result of an increase in transfer agent services, not only due to the addition of Interwest but also to an increase in corporate actions and directives of our legacy Issuer Direct transfer agent customers, specifically our community banking customers.

Print and proxy distribution revenue increased as well due to a few onetime projects as well as additional projects from Interwest customers. These increases were partially offset by the continued decline of our legacy Annual Report Service, due in part to continued attrition as customers leave the service, decreased hard-copy requirements or transition to electronic delivery.

It is important to note, when comparing results to previously filed reports, $206,000 of revenue during the 3 months ended March 31, 2017, which was previously reported as Services revenue, was reclassified to Platform and Technology revenue. This was due to the adoption of a new accounting pronouncement as of January 1, 2018, that required us to separate the revenue in bundled contracts for our ARS or shareholder outreach offering that included both electronic and physical hard-copy delivery of our customers' annual reports. The $206,000 represents the amount allocated to electronic delivery of the annual reports. All results have been appropriately adjusted for comparison purposes.

Overall, gross margin percentage was 71% for the first quarter of 2018 compared to 74% for the same period of the prior year. The primary reason for the decrease in gross margin percentage was due to an increase of $140,000 in amortization of the capitalized software that was placed in service in 2017. Absent the additional amortization, gross margin percentage for the quarter would have been 75%.

Platform and Technology gross margin percentage was 79% for the quarter ended March 31, 2018, compared to 85% for the first quarter of 2017. Again, the decrease in gross margin percentage is due to the increase in amortization, absent of which gross margin percentage would have been 86% for the first quarter of 2018.

With all of the previously capitalized costs now baked in, we anticipate gross margin percentage of our Platform and Technology business to grow with increased revenue.

Gross margin percentage from our Services revenue stream was 60% for the first quarter of 2018 compared to 59% for the same period of the prior year.

Operating expenses increased to $459,000 or 26% for the first quarter of 2018 compared to the same period of the prior year. The increase is primarily attributable to increases in general and administrative expenses, sales and marketing expenses and product development expenses.

General and administrative expenses increased 10% over the same quarter of the prior year, primarily due to an increase in personnel expenses and stock compensation. In an effort to increase revenue in 2018 and beyond, sales and marketing expenses increased 26% due to the addition of new members to our sales and marketing team, which increased in headcount by 25% over the same quarter of the prior year.

We also continue to invest in Platform id. as product development expenses increased over the same quarter of the prior year due to less capitalization and increased maintenance costs associated with our cloud-based product that were placed into production during 2017.

Moving down to the tax line. We recognized an income tax benefit for the first quarter of 2018 of $10,000 compared to an income tax expense of $41,000 for the first quarter of 2017. The benefit for Q1 2018 is due to a lower statutory rate of 21%, thanks to the Tax Cuts and Jobs Act passed in December of last year, as well as an income tax benefit of $73,000 related to equity-based compensation.

For GAAP purposes, we recorded net income of $320,000 or $0.10 per diluted share for the first quarter of 2018 as compared to net income of $325,000 or $0.11 per diluted share for the same period of 2017. Non-GAAP net income was also consistent between periods as non-GAAP net income was $458,000 or $0.15 per diluted share for Q1 2018 compared to $437,000 or $0.15 per diluted share for the same period of 2017.

Total EBITDA increased 24% to $655,000 for the first quarter of 2018 compared to $529,000 during the same quarter of the prior year, however, remained at 19% of revenue for both periods.

We continue to generate positive cash flow from operations as we generated another $537,000 for the first 3 months of 2018 compared to $647,000 during the same period of the prior year. This brings our total cash balance to $5,483,000 as of March 31, 2018. Additionally, on April 11, we announced a cash dividend of $0.05 per share, making it our 11th consecutive quarter for paying dividends.

Overall, we are excited to see the continued growth of our Platform and Technology business, not only through increased revenue but in our backlog and pipeline of new contracts as well, and are hopeful that this growth will also drive margins and EBITDA.

Brian will now talk further about our increasing customers, distribution and overall strategies and new developments for the remainder of 2018.

Thank you, Steve, and thanks to everyone for joining us today to discuss our first quarter 2018 results.

As Steve just highlighted, we posted a strong first quarter and a great start to the year. And as a recap, 2018 first quarter revenues were up 24% compared to the first quarter last year to $3,530,000. Sequentially, first quarter 2018 was up 4% from our fourth quarter of last year. Platform and Technology revenues increased 25% from Q1 of 2017 and sequentially 13% from the prior quarter. Our platform business accounted for 58% of our overall revenues for the quarter.

We picked right up where we left off in Q4 of last year, laser focused on execution, cross-selling of new customer wins. This focus illustrates our platform go-to-market strategy is beginning to pay off, and customers are now embracing our one platform play option, which is key to our continued growth this year.

Last year, we spoke a lot about being able to provide some additional KPIs for our business. As we continue to move further and further to a platform subscription business, I think it's fair to begin doing this with this first quarter. Of those areas -- and those are our deferred revenue and our backlog for the period. Deferred revenue grew 27% to $1,125,000 from just $887,000 or 27% sequentially. And during the quarter, we generated $322,000 in annual Platform id. subscriptions to new and current customers of which $281,000 remains as part of our backlog to be recognized over the remaining term of the contract.

We intend to continue to update you quarterly on our backlog and deferred revenue numbers as we do with other customer counts in our Platform and Technology and our Service businesses.

Of the $281,000 in contracts that are -- is in our backlog that we expect to be earning over the coming quarters, this number represents 29 -- just 29 new subscriptions for the period. Conversely, the ARPU of these transactions for the quarter was over $11,000, much higher than our previous ARPU expense.

Growing in our pipeline is vital for us, and areas such as exchange alliances and conference partnerships will help our sales organizations perform and hit on all cylinders as we look to drive our ARPU values.

In summary, we saw a sequential net new customer growth in both our Platform and Technology and our Service businesses. We had 1,845 Platform and Technology customers during Q1 of 2018 compared to 1,761 in Q1 last year. The 84 customer gains or 5% year-over-year growth was spread out over our entire platform business, not just newswire, as was the case in previous years. We also have 571 Service customers during Q1 of 2018 compared to 517 during Q1 of last year. That 10% gain came primarily from our Interwest customers as well as new platform subscribers that elected to bundle service components as well.

We are committed to continuing the trend of client growth and feel we can improve even further our customer profiling, contract terms and transition from our service to subscription business. By doing this, we are confident that we can reduce some of our seasonality typically found in parts of our business, print to digital, individual onetime services into annual subscriptions as examples.

With a complete platform subscription focus, we believe customers will use one system more frequently, and we will benefit from annualized bundling, thus giving us a better handle on our customer counts and our ARPU.

As you will recall, we spoke on our last quarter about a few of our channel partnerships, specifically OTC market alliance as well as the acquisition of Interwest. I'd like to provide some updates today to you on those as well as new initiatives we have been hard proving out.

The OTC alliance has been fully integrated. And since mid-February of this year, our entire Platform id. subscription has been made available to OTC-listed issuers. Our view of the alliance is long term, and we're focused on issuer education and awareness of our platform as well as the joint marketing with the OTC team. With that said, we are already seeing early indicators of customer interest and closed business. Although the numbers are small up to this point, we are extremely optimistic this will be successful for us this year and beyond.

The primary focus of OTC will be OTCQX and the QB tiers. In these tiers, there are approximately 1,400 listed issuers. Today, we already do business with just over 10%. Our goal is to get an additional 25% of the market from a penetration level. This is in line with what we previously spoke about in our client expectations for the alliance. Having a 25% market share in the industry, in our opinion, is significant to us and something we're extremely focused on. And as a small-cap market segment, this is an area that we're heavily focused on.

Conversely, we have also been focused on Interwest. This transition and transaction has been extremely rewarding to us, both to our shareholders and to us as a company. The market awareness for Issuer Direct is at an all-time high in the stock transfer business. People are beginning to recognize us as a market leader in stock transfer as well as our entire platform business.

Our first quarter 2018 combined stock transfer revenues was $691,000 compared to just $166,000 last year. That is a 316% increase year-over-year. This business was also 20% of our overall revenues for the period.

Our Interwest customers also have delivered on our cross-selling initiatives we spoke about in Q4 last year. Of the customers we obtained from the acquisition, we increased the spend on 20 customers for a total of $130,000 in new annual platform subscriptions, bringing the ARPU to over $10,000 in platform spend alone. Additionally, we have reaffirmed the business by signing renewal agreements for annual stock transfer services with an additional 34 current customers. Although those customers did not increase their spend with us, they now have a direct Platform id. access and hope that we continue to work with them to introduce new subscription offerings.

Our ACCESSWIRE news business has continued to grow since we purchased the business back in 2014. Q1 2018 saw a revenue growth of 31% and 18% sequentially. We have worked hard to increase the ARPU marginally despite some of our distribution limitations, something we'll talk about in a few minutes. Anyone who knows us knows that we've been transparent about our distribution limitations and it being a clear impediment to long-term growth. But we also clearly said we feel optimistic about obtaining the necessary distribution in order to be a viable option in the market.

And we're happy to report that this has changed, and this is something that we have worked hard on this year and we will continue to do over the remaining years. Our ACCESSWIRE news product is now live in several top-tier news brokers, trading platforms rather, such as E*TRADE, Interactive Brokers as well as our vital global news bureaus like the Associated Press, including AP Mobile. This is big for us, and we're optimistic about continuing and even more broader distribution point this year. We are fast becoming a top-tier newswire by distribution standards to match our world-class technology, editorial and compliance processes. We are going to continue to invest in our news business and to broaden our distribution both domestically and internationally as well as improve our language translation services to deliver our customers' message around the world.

Again, I'd like to think it's important to reiterate, overall, we're pleased with our first quarter 2018 results. However, with that said, we're even more excited about what's in front of us. Any of the things Steve and I spoke about today are a big reason. And the last point I will mention in a minute is where we're headed in the business and what we're doing to mature our offerings, grow our customer base and increase overall revenues.

We've got a strong 12-year business that understands the corporate issuers as what they need in order to comply with regulations and communicate their messages. We have filed tens of thousands of EDGAR and SEDAR documents and equally as many earnings events in this time and managed thousands of annual meetings, IR sites and unbelievably even more of just reaching investors, all of which boost interactions, visitors, audiences and engagements.

This is a good business. It's great margins, positive cash flows, but as the numbers of public companies change, we need to move our business a bit closer to the investor. By understanding their interests, investments and consumption, we will be able to drive the actionable data back to our customer, the issuer, which we believe we can generate additional revenues from. And we further make our platform more sticky, desired and much more competitive in the market, thus making us even bigger part of their overall business process and, conversely, continue our trends of growth, great margins and sustained cash flows from operations.

As an example, we have been delivering a part of this for over a year since last quarter through the investor conference initiatives that we previously spoke about, whereby we powered an event with our ACCESSWIRE news outlet and their webcasting engagement platform. Not only did we deliver increased revenues as part of our business as a result of these new initiatives, we also learned a great deal more about what the investor has interest in, utilizing this data to drive our analytics for this coming year, which we expect will generate additional revenues.

We are focused on further investing in our people technology, specifically key management sales and marketing teams and staff to deliver the next layer of growth. We believe we're on track to sustain customer growth, improve retention rates and greater platform business. Key to these attributes will be to deliver on our Platform id. subscription business, broader ACCESSWIRE distribution like we did in the last quarter and expand the markets that we serve. We're encouraged by the customer mix, specifically the new wins that are purchasing the entire platform, which is where our pipeline growth is most.

And in summary, we posted a solid quarter, and demand remains healthy for our platform. And we remain motivated on executing in growth plans this year.

Operator, we are now ready to take your questions. If we could please open up the call to the Q&A.

(Operator Instructions) Our first question today comes from Mark Lanier of Pegasus Capital.

Those are nice numbers and indicative of the business really gaining some stride, it's neat to see. My question has to do with gross margin. I'm a little bit confused by the ebb and flow of amortized capital software expense. I wonder, what are your goals? Do you have a range of where you'd like to see the gross margin as you exit 2018 calendar year?

Thank you, Mark, for the kind comments, to begin with. Yes, and we spoke about this last quarter. As we spent a good amount of time building technologies and platforms last year, obviously, that capitalization software is indicative of impact to our gross margins. And although we saw a slight dip there in the Platform and Technology segment as a result of that, we still feel confident that we can get back to sustained gross margins that we had the previous year or higher as we begin to build momentum in our platform subscription business.

So where might we be exiting 2018 of the gross margin line within a range?

82% to 84% range.

That's helpful. I appreciate that. I'm interested in the smaller part of the business, Transferly, and the crowd funding platform and whether you see signs of growth in that market and the competitive landscape that encourages you to continue to pursue that and grow that business. What are the signs that you're seeing in that end of the business?

Yes. The -- I think the Jobs Act in general for offering the ability for a Tier 1, Tier 2 part of the company to raise capital under that act. We assumed, like the market, that an application interface like we built for Transferly would be a bigger impact, and we should see some growth, both on our stock transfer business as well as the rest of our platform business. I think us, along with the entire market, has not seen the activity from the crowd as much as maybe was anticipated. Capital markets investment bankers are still holding a lot of those deals that reduce the amount of crowd, which reduces the amount of options for platforms like Transferly. We are getting our market share, right? If there's 15% to 20% of the Reg A clients that hit the market to try and go public, we are working with them. We just, like the rest of the industry, assumed that, that portion of the market would be a little bigger for us. Doesn't mean we'll retire the platform. Doesn't mean we'll sunset it. It just means it's not as big a contributing factor to our overall revenues in our stock transfer group.

Understood. Also, if you'd give us a little bit more color on product development expense as we move forward through 2018, the additional features that you may be working on for Platform id. as well as ACCESSWIRE extensions. What is product development going to look like through the course of this year in terms of the expense level and where you're going to be focusing?

Yes. We're comfortable that we're not going to have to capitalize virtually anything on a go-forward basis. We anticipate probably no more than 10% of top line revenues that will contribute to maintenance, product development and application support. So I think we're within range in the market. We were less in Q1 than that number, 10%, so I feel confident that we're going to be able to continue to deliver within that range.

The next question is from Eric Weinstein of Chancellor Capital.

Yes, great quarter. It's wonderful to see the -- those kinds of revenue growth numbers, not just year-over-year but really sequentially as well. Want to talk a little bit about, I guess, Platform and Technology. You've -- I guess you've increased your sales force and marketing resources. Your customer numbers are starting to climb again, which is great. But the ARPU spend, even last year was up, I don't know, 30% to 40%. Even the customer count wasn't going up as fast. So when I think about how you're going to be adding new customers, where to be focusing the marketing and sales folks, how do you think about that? So you've got some customers coming on at $11,000 a year and taking everything on the platform, I guess. Then you've got the OTCM partnership. You've got cross-selling opportunities with ACCESSWIRE and Interwest. Can you talk a little bit about the profile of the kinds of customers that are coming in from those different channels, what that sort of looks like as drivers, and how you're thinking about focusing your marketing efforts just to understand the drivers a little bit better?

Yes. I think when we look at it, you're right, right? The average spend of a new Platform id. subscriber is around $11,000 a year. So I think where we see the path is twofold, and then I'll get back to the second part of the contribution from OTC and other alliances. We feel confident that not only will folks subscribe to the platform in an annualized basis at $11,000, they're still going to pick up additional services. So where we may see new client ARPU expense coming in initially at, call it, $10,000 to $11,000, we still anticipate that a good percentage of them, we're going to see a little bit of service revenue of, call it, $2,000 to $4,000 as well. So we believe we're going to be able to move these new accounts on ARPUs higher beyond the $11,000 number. And then I think as you look longer term, we think about new product enhancements, right? What are the additional things that we could add to the platform that will provide additional stickiness to the customer, give them a broader value prop than maybe what they're getting on other systems? And so we talk a little bit about analytics and engagement and targeting. And those are going to be additional things that in the back half of this year, we're going to be able to roll out that we should see natural increases for. That's the one. The other side of it is OTCM and other alliances, such as the London Stock Exchange and other channel resellers that we've got. We tend to see those ARPU numbers come in a little less, and we'll talk about Interwest in a second. So I think you'll see that the $2,000 to $4,000 is the number we used initially back a couple of quarters ago in our call. But we believe the initial spend would be in our OTC markets client that comes into our platform, and then our job obviously is to move that number up. We've done a decent job at that. Like I said, the numbers are a little smaller than we would have liked to have seen. But investor -- issuer education is important to us there, and we're spending a good time in that. The third part, I think is ITC or as we call it, ITC, Interwest. As we think about clients that maybe had an annualized spend of, call it, $1,000 or $3,000 a year, we've been able to move those clients into the $10,000 to $11,000 range immediately. And we've been successful at that since November of last year when we started that transition. We've got about 20% to 25% of those clients now under new expanded contracts, and we believe we're going to be able to continue to go and do that. There'll be additional services work on top of those. So I think when it all levels out to your numbers of roughly $10,000 last year, and now we're into this $11,000 number, we're going to continue to move this $13,000 to $15,000 and, hopefully, by the end of the year, be sitting closer to a $15,000 ARPU spend.

Got it. Well, I know you can walk them up regardless of where they come on because you've been doing it a long -- I think I have -- '17 over 2016 was -- looked like it was up by 38% or something like that. Anyway, the -- so with your marketing team, where's the focus? And does that shift quarter-to-quarter? So you'll -- obviously, you had a lot of sign-ups for the full platform at 29. I don't know if that's repeatable. Or would the focus shift to another area based on opportunity? How do we think about that?

Yes, no. It is repeatable, right? I think we've got a great team that's dialed in both sales and marketing to pick up on what we're cuing the market to be ready for a platform subscription, right? We went to market 18 months ago with this as a test to see if the market was ready to consolidate their vendors into one interface platform. We're getting strong indications that this year, people are really embracing that concept, understanding and using the platform much better than they ever have. So marketing has been able to refine their message to really target both the CFO's office, the IRO's office to begin to hit on case studies and exactly what is working for our current accounts, and people are taking cue from that. So I think we're building up pipeline bigger than we have before. Candidly, this is something that we're very encouraged about and look to see further expansion and new client wins as a result of this new platform focus.

The next question is from Samir Patel of Askeladden Capital.

I've been trying to understand your company a little bit better. And I see that you kind of break out in your calls the ACCESSWIRE revenue, and I think you mentioned the stock transfer revenue is about $700,000 right now. Can you help me with the remaining components of the business, like the legacy report distribution part, the webcasting part, kind of any other significant line items, and what those are and kind of what the margin percentages are for those segments versus the whole, just kind of directionally?

Yes. That's a rather lengthy answer, and I'd love to follow up with you on that a little bit more. I think that if you look at the total bucket of the $3.5 million in revenue total for the quarter and if you just think about, on an -- even an annualized basis from last year, about 1/3 of the business is our ACCESSWIRE news business. There's a little less than that is made up of our legacy Annual Report Services business. There's about 12 components in there, right, so to go through each one of them is fairly laborious to the call, right, in fairness. But I think the overall reason why we want to call out ACCESSWIRE and Interwest like we do is we believe it's important to show a quick correlation to our investor community and our shareholders of where these capital's been, what have we invested in and bought, and what's the return for that, right? And so I think that's the reasons why we tend to call them out. Yes, I would imagine that in the future, if we did any other acquisitions, we would be doing the very same thing to show that there's some strong fundamental business here, and there's good growth opportunities. And that's why we continue to invest in some of those things. If you looked at webcasting, for example, webcasting business is up over the previous year as a result of what we've been doing with our investor conference circuit and some of the focus that we've got there and the commitments of that part of our business. Every one of our platform components for the most part, it had significant growth, double-digit growth, right, not only in Q1 but in the back half of last year. Where we see retraction, and we've talked a lot about this in every one of our calls, is when we look at the Services business, we look at the Annual Report Services business, the print legacy business, absent of annual meeting management, that business is continuing to retract, some of which is tied to platform. In fairness, folks have bundled contracts that include both digital distribution and hard-copy distribution. Some of them were successful in migrating to a long-term platform; a lot of them were not. And so as we do see retraction in that, that's reflected in some of those numbers. But I'm happy to follow up with you on that and talk more about it if you'd like.

Sure, great. Second question is, you talk a lot about the analytics on the investor side. I guess one of the things I'm trying to understand is I think most investors probably access press releases and company filings from Bloomberg or Cap IQ or Sentieo or some tool like that. So does your analytics platform have the ability -- if I'm looking at your press -- like right now, I'm looking at your press release for the quarter through my research tool. Are you able to identify that it's me who's looking at that and engaged with that? Or do you just know that some user on some platform is doing that?

So yes. There's a lot of current technologies that we've got out in the market as part of our analytics for ACCESSWIRE. Today, pick up, to your last point, some user, right? There's engagement. We could identify geographically the location of the engagement and what platform or distribution partner it came from. We've been reporting that analytic to our ACCESSWIRE clients since early 2015, and that's where we started and began this trend, is trying to tie that unidentified user by location to a specific known user. Maybe today, you identified yourself with who you are on our call, and we're able to pick up and say, "Okay, now we've matched these individuals." Now we're starting to understand more. And from an issuer base, from my perspective and Steve's perspective, it's extremely important for us to understand that our potential investor and/or current shareholder has these engagement profiles and where do we see those engagement profiles winning, right? Meaning if you were on Sentieo, and that's where you saw the news, do we see a trend happening, that 20% of all investors are picking up news from these terminals, but they're not picking it up someplace else? That's going to help our sales and marketing teams be able to identify and understand how to go to market and sell our distribution more efficiently to a prospect. But ultimately, at the end, we want to be able to put ourselves in the position to say to our customer, "We understand where your audience is and perhaps who they are." I may not want to give all the information of who that individual is, but I would be able to give you some reporting to tell you how many of them are and how to market to them in a very passive way so long as you give them the option to do that. And that's really what the analytics has driven for us. And not only can we pick it up from Dow Jones or Bloomberg or our own proprietary ACCESSWIRE news platform. We can also pick it up from the customer or the issuer's IR site or their webcast or teleconference, right, or their investor conference that they run. And so we start to aggregate all of that data and utilize that partnered network to really learn and lean from Schedule 13s and Section 16 filings and investment banking filings just to really start to understand what that profile looks like.

Okay, great. And final question if you have time. Do you have a number on kind of what percentage of your -- not service, not the declining portion of the business but on ACCESSWIRE and the growing portion of the business, what percentage of that revenue comes from OTC, your kind of nano cap-type companies?

Yes. Specifically, through our ACCESSWIRE news network. And I think that if we delineate our news business in 3 ways, there's public and private, right, those are 2, and then there's community messaging, let's just leave that as it is. Public and private is probably 50-50 right now, so public company news may account for about 1/3 of our overall news business, but it is primarily in that small micro/nano-cap space. And we talked about this in the call a few minutes ago. I mentioned that some of that has been because of our inability to really broaden our distribution, right? We started the news business in 2014. Unlike PR Newswire and Business Wire, we haven't been around 50 or 60 years, but we've been able to build almost an equivalent distribution model up until 3 months ago that was competitive, that got 90% of the distribution points as the more established newswires. Now as we begin to fold in E*TRADE and AP and Interactive Brokers like we talked about, there are about 6 others that we're confident that this year, we'll be able to add. So with that success will come our ability to grow not only that small micro/nano-cap space news but also move upstream. If we look at our ARPU spends on our NASDAQ and New York Stock Exchange clients, they're almost double what they are in OTC clients. So if we find a way and an ability to move our news into a larger-cap client, we feel confident that, that additional distribution will help us significantly, which will grow even further that newswire business for us.

The next question is a follow-up from Mark Lanier of Pegasus Capital.

What sort of things do you see on the horizon on the international front as you look at partnerships and opportunities there?

Yes. There is a big thirst here for us to broaden our business beyond North America. And as I think we've said in the past, we look at -- we've got an installed base, a couple of hundred accounts in Europe, primarily in the U.K. We've got sales representation there and operations servicing those accounts. We still feel that, that market could be strong for us. We've got a great partnership with London Stock Exchange that we think we can leverage there and invest in the future. But really, when we look globally, we really think about distribution. We think about Asia. We think about South America, think about other parts of Europe that we can broaden our distribution to build out ultimately what the drive and demand is from our U.S. customers. First is getting global, and then secondarily, going out and building global relationships to draw folks back to the U.S. markets So as we look to put any human capital or hard capital to use in this, it's going to be focused on distribution to broaden our ACCESSWIRE news business.

Gentlemen, there are no additional questions at this time. I would now like to turn the call back to Brian Balbirnie for closing remarks.

Thank you, Brock. I appreciate it. And I'd like to thank everyone specifically for the questions today and taking the time to listen to Steve and I talk about our first quarter results. Like in one of our last Q&A sessions here, if anybody has any additional follow-up, we'd like to welcome the opportunity to speak with you again. I wish you all a great day. Thank you.

This concludes today's conference. You may disconnect your phone lines at this time. Thank you for your participation.