RSSS - Earnings call transcript Q2 2020 | Research Solutions, Inc.

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Research Solutions' Financial and Operating results, for its Fiscal Second Quarter 2020, ended December 31, 2019. Earlier today, the company issued a press release, discussing these results and a copy of the release is available for viewing and can be downloaded from the Investor Relations section of the company's website.

Joining us today, are Research Solutions' President and CEO, Peter Derycz and the company's CFO, Alan Urban.

Following their remarks, we will open the call for your questions. Then, before we conclude today's call, I will provide the necessary cautions regarding any forward-looking statements made by management. information, company's provide financial of also information. will regarding use the non-GAAP I

like that a remind be I company's to Finally, would everyone Investors of made for website. the recorded available this replay in via link section the and will call

turn Peter Research I'll and the Solutions' over call President to now Derycz, CEO.

Peter Derycz

last growth good platform our Overall, made operator we transaction a focus second consolidated our the enterprise. Thank basis. decision quarter, momentum customer The At we in continued expansion our giving growing with are strong as pleased all gross our and on the base to quarter, you, our maintained beginning us in resources results are focus businesses business-to-business in and afternoon everyone. campaigns. of initial we to marketing on and with enterprise relative through we shifted both on the margin progress positive, confidence

our getting are small to optimized research further activities ensure, Galaxy prospecting tools, also R&D, our by driven medium-sized are we benefit to could Article which and from We offers. greatly the of front organizations fine-tuned platform in that

more During our rate that process, we learn customers our potential in capabilities, of fine-tuning our team increases to once significantly. front conversion sales the get found about

is on team we getting in is an as the appointment shots So, important focused further sales setting many really goal step ensure to lead our optimizing methods, possible. as our which nurturing on process

our quarter along the we as on to every with received gadgets, updates improvements, to multiple and we platform's out various make to feedback do continue also from rolling user the We experience interface, customers. based

the we we remain our to customers' solutions initiatives ability greater with insight future. meet consistently providing platform give some will on to throughout our into enhancements committed our platform detail the planned needs. have for capabilities for quarter, various the made along the the success and researchers the provide Our we our most platform's evolving to to and innovative backbone is best-in-class I

I'd over fiscal to Alan walk to first, through quarter to But like pass Alan? it second our results. financial XXXX

Alan Urban

Jumping platform XX% our year-over-year everyone. incremental in by XXX afternoon good platform our a right QX. and translates revenue XX QX increased Peter, which total in net XXX, into results, from fiscal deployments into deployments increase Thanks, to to $XXX,XXX, XX% driven subscription

non-GAAP We benefit churn our quarter recurring define press the release upselling we annual and and consistent in also with and continued other use annual current see Please of recurring XX% X% to up $X.X customers. how from low revenue, terms. ended million The year-over-year. platform sequentially and for revenue today's

$X.X customer year-ago X,XXX XXX,XXX million Our and grew compared revenue count increased XXX,XXX total increased the $X.X count to million in to same to X,XXX. from approximately X% transaction quarter. active Transaction to from

the Within XXX. up customers of revenue to these delivered corporate to the total consolidated while of compared number businesses $X active XX% customer the up X% XXX, in were an year-ago customers academic quarter. $X.X to of same million, million X.X% count, increase was Together, annual

by basis third-party continued providers. effective compared as our Moving provides expanding Platform same cost with year-ago driven in to costs, increase This to data to saw gross quarter. margin the points become more our proportional XXX margin, increased by on our to XX.X% was leverage gross decreases third-party business scale

XX% to Our the target segment in in range. margin platform gross remains the high XX% low

offset due Gross by proportionately to personnel business slightly lower XX.X%, margin the Transactions primarily copyright in to costs. declined higher slightly cost

becomes the mix shift revenue. compared same a Platform margin of XX.X% which to as The gross As points consolidated increased driven business, will by year-ago percentage a Platform basis continued was primarily we XXX our improving to revenue result quarter. higher-margin anticipate to increase a the business higher continue

expanding sales were $X.X quarter. due The platform with continued year-ago increase was investment business. in $X.X expenses in the compared million to Our primarily marketing same to total operating million the associated and

year-ago $XXX,XXX from Net in $XXX,XXX negative share negative quarter. EBITDA or $XXX,XXX compared the continuing the year-ago or operations $X.XX to negative loss to same negative down net to Adjusted per totaled in of per share compared loss quarter. $X.XX a was $XXX,XXX slightly

receivables to This XX, financial million deferred with XXXX our December and balance Moving sheet. under the remain XXXX. of clean revenue to million summary. expenses of of and and payable, Cash representing sheet our line equivalents June were liabilities. $X.X assets balance no versus There on revolving at all $X.X to our outstanding nearly at borrowings continues XX, increased accrued completes and cash our comprising accounts and all nearly our credit

call the turn back Peter. now to I'll Peter?

Peter Derycz

Alan. Thanks,

the through what walk made quarter we to future. this enhancements planned like for I'd various the new and platform First, have we

earlier, I best-in-class gadgets our research are our platform, to remains providing platform and committed existing consistently mentioned new a continually hard why is evolving at and As ones. introduce which work we team to update

various features search gadgets life adding We current search to visual sciences our gadgets users that completed efficient. ranged more updates allowing new to the more library for gadgets XX make throughout the to download of than process quarter, in and from graphs our intuitive which

flagship to Manager better to functionality gadget bringing gadget continue and our also improvements We make Reference stability.

ensure on to our Along is improve deliver exceptional. customer Our current our capabilities, enhance looking features great development experience for listening team on feedback customer core gadgets. to ways with prides the and platform to continually itself

gadget, full all to Discovery we user Platform for manager reference the allows perform users addition, launched and literature gadget across Research the documents dashboard. included the integration the citation a research providing seamless and new also easier access to ability gadget, this within we access this Within to data. directly Galaxy earlier searches and article multiple month, text In which comprehensive our databases

gadget have in additional we biotech, clinical and further to this received patent new plan and by the feedback trial capabilities this enhance including We months. databases towards launch geared already coming from excellent

on features with completing We also and building enhancements. progress various the interface to continue make platform overall along user for new experience out

building we out during currently scholar initial second fact, Article test and Galaxy are In completed the phase. the the in quarter

and be will aspect Galaxy to specifically new of a academic the the markets. is Article that reminder, Scholar a platform As university tailored

universities list growing joining been of as a that have customers. us have We

to they've been deliver deliver now how corporations. as using well resources and Thanks Article designed for aspect better are information universities as However, of they support for we an them. for way features their design budget happy and to the functionality Galaxy feedback,

we the In Galaxy addition pipeline the Scholar, quarters. tech development plenty to next launching in over have Article couple of

automation We and margins are will working enhancements improvements data enable additional to we on end-user continue developing including to sell. to storage functionality driven improving back adding making our prospect through various anticipate our along expanding framework data, system capabilities, with ability end gross that further search

presence research community to growth the more highly aspect pursuing key expand complementary efficiently. is our strategy Another our partnerships that within

with from second the successful has literature, to and scientific proven partners recent connect partnership to evidence partners Article two platform. specific Our tools in already our during launched via bases the to use evidence most allowing user quarter, be to Galaxy

these all both the offer of We two in that active, working we the companies. have similar remain are integrations. awareness, believe important We the platform we customers for for partnerships new in we're driving role, to synergies together. technical while we platforms, on the users of searching benefits, generating provide play best benefits continually And finding and will an between the to feel

half pipeline, we which have Galaxy. In another believe data forward Article be on market it we partnership in the expand beneficial back launched. offer, resources content will fiscal to We and updating our this significantly anticipate and we XXXX, in have partnership, been the to fact, highly we exciting that our the on customers look launch will very once to has

efforts, began wanted the on this quarter. to provide rebranding I Lastly, which a brief update

three our brands we Article existing Galaxy. name, transitioned reminder, one As and a one into Research Solutions, product name, company

team sales pitching now our result, is to all integrated and customers. one brand, a As completely

and We Since between launching and users for simplification, and marketing the launched transaction have nothing transaction buyers. potential existing buyers. customers, positive part our of this greater feedback re-brand initiative our as eliminate and teams received to confusion from but platform desire sales users,

under are name to will that brand this more drive consolidation further expand We And platform reach. transaction buyers of our offering. confident our our one

our half complementary expanded introducing to generating enterprise highly to audience, look to we will unique remain with capabilities an of the fiscal revenue on partnerships, growth. platform XXXX, new through our customers, focus accelerate along As back

consistently retooled strategy combined our to ability confidence, beyond. executing platform strategies, gives continue us evolving an meet research needs year Our of remainder our marketing will for that customers, the our growth is and of we to provide sales and with that innovative the the

to now the back I'd the Q&A. that, Operator? turn like to for call With operator over

Question-and-Answer Session

Operator

Thank our you, sir. concludes question-and-answer time, [Operator this session. Instructions] this At

Please Before ahead. go questioners. George we Management. we conclude have me, today's with call -- Melas MKH I some pardon have

George Melas

you. afternoon, Alan. and Peter Thank Good

Peter Derycz

you. Thank

George Melas

or two changes on the now? going marketing? marketing. you ask, sales some was give in of us sales And to job And in the top color that a more how Good just made, little could if and maybe the the on quarter bit right to last you the market you've wanting are line. and what quarters I are

Peter Derycz

Sure. Yeah.

we've So, the materials transitioned oriented of and that is BXB. providing the enterprise as really means on to marketing that, accounts, what you focus marketing that is on we're all the And mentioned, the marketing enterprise know and content side, towards we customers. sales

the we past, have users, more to scientists side. had we that the get -- BXC enterprise We platform on trying -- had the after individual market had those using going with were in So, individual what success we call the experimented we directly. we found

enterprise outreaching posts, everything all customer. campaigns, marketing papers, marketing if at that blog now, look on you our So materials, on white side, doing it's focused we're

to the side we've well, and to to a do folks really as we sales of able really been into experiments that to at really who result want want on And shift who enterprise, conversations our as -- whole do really go we've have we after with. to, talk fine-tune

to pretty the the with, gotten quarters, give our and on a close about sales success them learn the to them, in we've approach the reps the that think focused over account a couple deal. we solution and to our get sales of last chance size really so have front I the of chance of And to how very most much, rep, how prospect

gotten a result. a able we've more rhythm deals bit a just few of into fine-tuning of little -- close bit were it's of as now. We I and a a So think a now lot sort to

plan we continuing execute on on to So that.

George Melas

involves close a Okay. And sales salesperson front really that your -- -- a Peter customer of makes of I the rate a in mentioned giving you it customer. sense, process part guess

online? them are terms in a of doing big was in And Just Or difference question, the of -- typically meeting? from face-to-face two terms between there there success is or you closing? a

Peter Derycz

depending and we it's to face-to-face mostly, do remote ability the online where they're that demos located. so do tools it of There are a is there's fine-tune just yes, the calls. so really with No phone that -- few now. on online the to -- And size great Yes. and many prospect

but and person, rather allocated And platform. so having the the reps by one them and with spend getting key time to the to aspect really really terms time just the bandwidth not the in efficiencies prospects look that cost that face-to-face sales being savings we on is the discuss achieved into so of our adopting and in in with platform of there

George Melas

Can a rate? Or... Okay. that close what And you your once you give us demo, do is number?

Peter Derycz

No, we give the All can't quite We it's that number. say improving you cannot number. the give a can bit. you we

takes means rhythm been we're we online at addition successfully the we've sure but to call and that our website, e-mails So and sending actually not we've looking talk of that that we're able think to and that of prospect sort able people that demo phone a been right in to we've just gotten to place. into to make that

So but improving since we can't that our setting can't number. to and capabilities we've prospecting I dramatically. you appointment -- confirm it's a give quite able our been that fine-tune

George Melas

day, kind can are you people you how long Okay. are on long that platform, tracking platform? of you're and how generally if Can stay apps they give And the week what they're it's the tracking whether there? per And on using? spend us -- metrics -- you do some key the with per

Peter Derycz

Yes.

platform. using this a And We the are one of high -- that training user our but is that rates put the of tracking we on and out key staying for the what can on. don't some experience renewal reasons of exactly and so those and I say they're the do onboarding. whole provide fact component publicly, We metrics

properly. and the aware We through that So power we make the are capabilities up sure sure users and and administrators is that set users make those. train of the the everything

platform and training And the because know to to stick so the success, what walk you once think that I it's how really with tend the the going to really us. that's it, you drives use -- are through

do that so horizon make And we'd training. when some communicating we sure flagpole, that flagpoles so sort flagpole, do we we on. we reach make that and have some sure we'd some on reach When of the that we

the quantity that really more per se. about it's of usage So than

George Melas

Reference one question then maybe Manager. on just Okay. final And

Some in subscribing that it to by not? Or stand-alone for switching of mean the the and it's Manager your longer to that? market? is see your you to customers I no Reference possible Or reference manager maybe

Peter Derycz

it's days say, in Management now I'd early Yes. world. Reference

wouldn't listened changes improvements able yes, to some and to numbers giving I that, We've could So be I improvements but some you say, on. days. improved so it's and early made like stability customers just

I So bit give to little think any on feedback or early a guidance that.

George Melas

Okay. Thank you.

Peter Derycz

you. Thank Welcome.

Operator

Instructions]. [Operator

GlennAllen Our question Please Advisors. next ahead. with from comes Glenn go Arbeitman

Glenn Arbeitman

Peter. afternoon, Good

get margins. I'm Another on investors quarter. that sure I invested you you pay of improve the fine and with those never might call tired seeing

job well done, whole the good really team. So, to

Peter Derycz

Thank you. Thank you.

Glenn Arbeitman

about to is the that toward relating of that end to new delivering? a see to and too this to very a be little products but us specifically of something there a of not partnership still as like impending picking for sort Or fruit other was done, realize sounds it's is going that I you're technology is comment you call gave curious articles part promising. a publications been we've there until little tease that shift the industry's just scale? and science the within good I include

Peter Derycz

forte our technology. is Well, Yeah. science

especially, what So, technology of yeah, since doing, really so enterprise-focused we're is and most related. medicine we're science

customers and about about on access the really platform can more user our it's of So expanding access information. ease what of to experience use ease improving

And of more platform a robust just sort all join. miss a yeah, compelling lot the it's you vein becoming lack. of more that's got to in you'd so if then, that stuff really reason And

really So it's show. kind within XTM to of

Glenn Arbeitman

discussion look the good across of update listing money forward you're where if I On some and getting market to national on unrelated of us and go that know you are question. you don't going about out mentioned, line. there's you'd on I can Great. what the sort finish quarter a luck give Last more an -- Okay. plan an possible but your raise or was, stock plan? sort

Peter Derycz

Yeah.

-- -- as our current. with the on mentioned we our we So application call, NASDAQ we maintained last

-- cash it's or raise couple comment a that through $X live to just through There of a One application we're a are balance means, yeah, address current. short. the we not Whether about million capital any or in criteria. on. want on So can't sheet, is, we other I

bit the And bit a low trading other one, shy on new sort we're a average on just criteria of little then trending daily was a volume just that.

there, we're not. Sometimes we're sometimes

the more that direction. nice in now is is is getting seem executing and stock We company think direction. The able There little to a on think, nice I moving a a to clear be plan negative improvement plan. The that hurdle. So growth surprises. I stock noticed, are bit be moving a in margin no gross good we'll

my it's at our point future too one that think And NASDAQ including the for not of know there. that better the get shareholders would I a So objectives. some exchange key myself. be far we'll hopefully in We

of one my it's key so And priorities.

Glenn Arbeitman

always talk with Thanks. quarter. It’s to Again you. a Okay. pleasure

Peter Derycz

Yeah. Glenn. Thank you,

Operator

time, concludes this At our this session. question-and-answer

conclude to financial today's Before regarding provide well Research important Safe made forward-looking non-GAAP would during that I of Solutions today's regarding use call, Harbor like statements information. include statements call, statements company's the cautions as as we

Platform continued relating information and and of to today's presentation Examples expected executing will market this company's sales in of its future strategy, Statements statements not services, company company to the the regarding barriers marketing will company the and revenue growth. that and call, acceptance forward-looking are the and develop few and of operating financial the performance. statements statements include, future made forward-looking and during to improvement include products be but expected limited that expansion by that and management in and revenue terms in global contain the deployments events the faces and continue proprietary and such successful the its greater achieving growth maintain Transaction continued software, in that

not which or of by results or future will a the Such be accurate interpreted should performance of not at the be indications guarantee as results for will necessarily those forward-looking performance achieved. times statements be and

available as cause They are good events faith were that and differ risks future those on at statements suggested time. to respect and management's from and/or expressed made actual information at performance forward-looking to the The could in are statements. belief time that this subject uncertainties based with or to results our materially forward-looking by

plans, general new customers but include the in company's in acceptance technology Form company's Important the in to SEC, success Securities changes the and information could and described not of the obtaining platform all economic and XX-Q. the its that Commission, in time-to-time including interim Form related factors development, are statements factors, and ability to cause on company's model execute company's company's Exchange the XX-K related products deployments, information success Report strategic the the Quarterly and from and risks the conditions, that product in financial differences on in market, new with Report Annual business competitive the is company's filings limited and and contained

company no presentation. to otherwise. publicly future the The the company or no or update in cautionary new information information, revise update statements because provided events obligation any undertakes to of forward-looking obligation assumes also The whether

information U.S., with the or as by defined also the is accordance intended non-GAAP to measures Accounting accepted measures in the GAAP. presented be financial included not otherwise or Accepted Principles of The presentation Generally as prepared information in presentation the substitute considered financial this financial to Today's SEC. as for referred financial isolation in

release. the to today's discussion non-GAAP reconciliation about measures nearest the their and company's press refer to use detailed of measures more earnings Please in GAAP

refer today's be and replay instructions. dial-in Eastern March to after recording today P.M. through Please for everyone like today's will that press available call of for X, XXXX. release XX:XX remind to would I Finally, the

you us joining Thank presentation. for for the

may You disconnect. now

Research Solutions (RSSS) 14 Feb 202020 Q2 Earnings call transcript