RSSS - Earnings call transcript Q3 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 Third Quarter ended March 31, 2020. 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 Web site.

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 Web site. the recorded available this replay in via link section the and will call

and to President Please now Research like to Derycz, the turn I'd go over ahead. call Peter Solutions' CEO.

Peter Derycz

you, Thank operator, and good afternoon everyone.

acceleration these in marked a our times. experienced an for the significant company. even momentum of forward quarter in step third sales fiscal unprecedented Our midst our We

During to the our sells. recorded wins highest level of our up of revenue quarter, we period customer annual platform's another new quiet recurring business of existing due and strong

We ensure service and and could task customer getting marketing also both and make possible customer is our across the teams R&D more best our times. growth our these transaction. efficient tirelessly working capabilities, customers sales, continued happiness platform our which unique their are especially and during to to a experience utilizing account This testament of all easier to

our and expansion approvals base long-term late began in more and on also the trading including received awareness, improving NASDAQ to investor institutional exchange up We by liquidity will value listing help the shareholder believe listing of increase our market the March. investors. We to for

is however, helping in pandemic. the commitment importantly, our Most to COVID-XX organizations struggle against the

are acquire, While contributions to making we research will the global can't we a create communities effort. magic

momentarily. virus Viewer further and when tools the have our launch the specific In in pre-articles to the including assist on to of say will write I pertaining providing fact, Gadget introduced have both more Research we the pandemic, applicable. clients copyright to COVID-XX researching

for home and and content, our clients all research from both work economic uncertainty, our we Beyond in mandates. the efficient of of tailored times medical value and scientific provide resource

to article the providing SaaS-based time they money organizations can need research save help platform access and all Galaxy Our remotely. while

of discovery, text enjoy productivity and efficient cost lowest lab while one-click in acquisition, point tools, at Solution, filtering as organizations papers as highly content all in the Research one scientific can well for all this full With to access workflow. one

As weather pandemic in April, recently to of well release stated our the any financially positioned press company have incredibly operationally effects update strategically, on and our COVID-XX corporate in is may business. earlier our

already have as well during been before while operating global our implemented company safe helped operating which this to We has stay virtual a mandates the at employees world. interruption around without home virus, keep

procedures staff. not have of our operating necessary we into single had are already our amongst systems, COVID-XX result, a processes model. security, As The incidence built and a tools,

disruptions. some has our a And on there been such virtually an who So zero internal we advice may suppliers, for and most operate need effectively in to also valuable environment. how are customers resource

business the make which will serve platform I long implementing the would initiatives on even well we are scientific over the give to community various also medical these this term. more during our valuable and to detail greater unprecedented times, business

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

Alan Urban

everyone. you, Thank good and afternoon, Peter,

right Jumping results. QX our fiscal into

$X XXX million months XX the XX% in deployments XX to which platform driven total to QX. and increased year-over-year platform Our in from in trailing by XX XX% into subscription revenue deployments incremental translates a net XXX, increase

low benefits in and million the ended annual customers. up platform of The reflecting year-over-year, consistent up of quarter churn with X.X sequentially, and revenue XX% XX% current recurring selling

use press non-GAAP and release we for other today's revenue how annual see define and Please terms. recurring

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

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

points XX gross by margin, compared platform margin to gross same quarter. to on saw increase business our Moving to XX.X% ago the basis year

We third-party cost. continue benefits proportional from data decreases to in see

our cost provides has high more effective of leverage reminder, third-party margin become consistently range providers, target the which scale our expanding a with to meet XX%. low our gross to allowed As to XX% high-end of us

Gross primarily costs. Margin lower to XX in XX.X% basis and by our transaction points personnel business increased driven copyright

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

X.X Adjusted expenses in due quarter. net compared operations fees X.X as a primarily to with costs, increased nil XX,XXX our EBITDA up The were NASDAQ to to negative income XXX,XXX personnel greater increase same to to year Our total $XX,XXX ago was of year Net quarter. from the share as in ago to share, or in loss quarter. listing. the million or operating compared continuing nil per increased well the million, year ago million associated compared per $X.X

to increased result debt to at cash million XX primarily credit were our during was XX, no the and on There X.X March our from balance $X.X X.X cash The of XXXX, warrants versus in exercise have Moving liabilities. June of million proceeds from revolving sheet, the outstanding line the and equivalents quarter. increase no or XXXX. long-term million we under cash X.X borrowings at million

difficult appropriately remain balance the strongest of company's that quickly in navigate to able in unprecedented this and But we'll with vigilant ever in balance our has This our history, is be the these said, ability react confidence been changes cash environment. providing we further times. highest sheet to being our to

now summary. financial This Peter? completes to Peter. I'll the call our turn back

Peter Derycz

Alan. Thanks,

million access I'd customers to our groundbreaking launching with partnership new quarter. Springer XX% will gain this went platform to scientific additional First, With on open Through end world's entered immediate with the literature, articles. of like to this of XX our Article all a along into customers to access which access book the and partnership, to journals new that Nature; the Nature the highlight research preloaded Plus, seamless peak cost. Springer offering, at we no the Galaxy we're grants access chapters,

Plus literature Galaxy a open the as best well puts as boost to it the all information powerful and providing of access of content, Article takes one Nature package Galaxy, best of toolkit organization. Springer Article in the any research neat

collection capabilities big SMB significant Historically, to scientific staff With represents key bringing of world we're content, internal were organizations this impact the largest only subscriptions library. to to manage democratization able journal of universities which R&D large the the let an high a alone a to enterprises, partnership, required have afford and literature. of organize company a the same and part

that Nature changing library. ever of There's need to no robust access accepting the from or dubious to legality quietly universities about borrow worry content or sources more Springer even articles friends passwords illegal

fully all corporate properties. will be integrated Article access directly work with this Springer with along Nature's friendly Additionally, flow web environment, of available Galaxy's on being

excited our and We clients, changer along truly it a this to are value believe another when customers. game be will for pitching with attractive proposition prospective initiative incredibly about providing our current

with or Active simplifying user remove recently entire Galaxy applications research single announced may also to preintegration Article Zero management, Through the marketplace, administrators access for of Directory. setup user the of via platform centralized Azure department. Microsoft sign-on, You automatically seen, or add account SSO addition have we can

find provides a need access users applications of each Rather which provisioned than now simplified with access. stack of signing separately, into convenience one to only application zero a Galaxy customers to the they've Article for fast all been on This our SSO. way

makes the While, we've always integrate customized offered The much pre process more efficient. to configure and solutions with integration Azure.

simply customer's a the from of details, work can flow authentication within the Article matter download minutes. send allowing and a Customers configuration to marketplace us Galaxy to secure the app Azure us

looking our streamline research ways We simplify and for always process the are clients. to for

library further is to another seamless our content workflow this providing within platform. tools robust in Article step Galaxy of and And access forward our

gears to we switching seeing COVID environment. Now, are XX in the what

pandemic. As are disruption to business I this not any positioned lost the we virus. experienced due we a have our client to earlier, or Today, to mentioned weather well

to R&D seeing as sciences the across expanding directly our especially efforts fight life of a customers we anything, the industry find If are involved in are several cure.

Galaxy missing robust Efficiency needs Movement. new our Article product as customers Research our without have join becoming Additionally, as clients beat. development continued more we our evolve to a is

communities mentioned I in remarks, efforts. As research my global opening making the contributions we to are

have to introduced pertaining like and Research tools gadget, civic virus. the articles COVID-XX We they're the viewer copyright free also providing

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that a removing Our free. charges any monthly and team has publishers been for copyright data our have running of made for analysis billing papers diligently available

customer you're an In were policy. a believes COVID-XX mistakenly to cases charged open for also where articles, refund they offering

research unique during up to and seamless most we committed remains organization ways which process providing the circumstances. evaluate in helpful can we will the especially And relevant and Our resources. as consistently date these make possible, as to

this we in confidence needs to our continue ability meeting Going market have environment. utmost forward, evolving the customers our in current

as momentum our April. is fourth fiscal quarter our month experienced we another fact, in continuing In strong in

our Although closely impact this remain vigilant dynamic on horizon we the potentially that there's monitoring nothing currently team believe momentum. this and is could environment. We

balance and in our the cautiously zero of outlook. are company's well We and optimistic which access our all history, highest remain of strong line debt credit the cash trends to further full positioned demand a moving with about supports forward

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

Operator

first Peter Our ahead. Rabover Instructions] Capital. Artko [Operator go Please question of comes from

Peter Rabover

funding hear the the another on confident good really quarter for outlook. tone the congratulations and guys, future pleased Hey to

you and Evidence question Springer with new is, I these my So guess Partners. -- partnerships have two first partnerships

is But there update so way the And then, would is partnership, partners an Springer or maybe to on Evidence leverage kind a the Partners with almost. partnership work? and a of Partners the all there Evidence how that triangle

Peter Derycz

Yes.

going companies. announced we partnership we're them. really this very are Evidence that we with And, similar well, launching the month May, technical in integration So Partners with it's

our get article connect platform So there'll of connect other be API's which buttons and their to that some ability inserting, and into to Article platform using our start directly like Galaxy. to actually and things

really technical see the forward. great integration that's to So moving

be The to of these solutions have customers Galaxy product. that want product are and Distiller Evidence to Article use both Partners the basically integration customers

to it. So to both it's really be have a of you customer use

not selling where joint customers well but new their of are, existing that where one sell the may So at with one and we're as opportunities the up be them. are as product to using opportunities other customers looking

to The sweet With content It's that. but for new Article medium-sized businesses. sort it of Galaxy Springer Nature version that the pre-included really designed launch really to is spot Galaxy, Springer in of customer just are Article just this into to called Nature it with sorry, Article small one for have our it's Plus. partnership. designed Nature -- Galaxy which regard is Springer, to designed Springer get and limitation

as seamlessly if a Galaxy an you're well then work together. Article it Evidence and will So user of Distiller, Plus SMB of all customer Partners

Peter Rabover

revenue the how P&L, think Galaxy a or different Article should to should or there's show we like or up Okay. we Are that cost sharing sharing if going Plus of through things expect economics about the forward? same little

Peter Derycz

a Yes. is it The that provide pricing boost. around net to way we designed we the Article modeled Plus Galaxy

as sacrificing and Article So that going We're of is so actually pricing not it's result a edition direction. we're anything Galaxy different. premium a --

Peter Rabover

of partnerships? selling they the yet had you one they are or either product? Evidence, one any customer cross Are -- revenues Have the signup and three your through the of

Peter Derycz

here early customers integration. the waiting Yes, That's there's stage. that definitely are in for queue the

And so this that's coming out month.

couple happen. will So it of in be weeks the that'll next

interest. definitely there's So

it was webinar it's joint been Partners. a ever most successful had -- the we've with recently had. also And We Evidence webinar

attended but had been all of the up like XXX ever attended, of it, that I had. attendance it So sign not that's webinar and to them hundreds XXX we people think really we've had for and highest

think I think great good think solution. their our good we feeling for customers. we're you're a So for and if about customer, then then, customers And it's partnership. it's We really a joint good

Peter Rabover

Okay. a support near SG&A of growth you're I have the you Or kind capability, guess I that growth? now think phase. into guess, Do hopefully in you more anticipate launching enough that higher investment sustainable to more new, do the SG&A future? you

Peter Derycz

I think we've got enough.

do. be product may how what of different aspects and to think we product some shifting -- management. sales, deploy I development that focusing of around there we want on Primarily, marketing,

similar. will some the there moving looking resources very So, that stay we're to around

Peter Rabover

NASDAQ I'd question. a and curious balance, are do but you thinking doing and what a guys more little cash have early a with thought maybe you're to what this you But, how capital ask then, positive about allocation be growing flow -- you're and do now you And are -- as cash you company. Okay. company too it's about

Peter Derycz

the bigger have some a sheet qualify meet NASDAQ. of We to for balance criteria had Yes. to to

that yes, the like and warrant we're or that was cash exercise seems more entering in phase helpful were on starting or regard. result, as sitting So really occurred to that generating we're more. generate And it we

the are to possible we our of strongest eye really to for things an in to way. kind two sure one keeping So position able storm were come there weather that that yes, could sort we are make of any is, want be that open

in see Yes, we We are base. horizon the on things that But bad we all going any we're there. are in and the vigilant. customer talked great about we positioned and in now, our don't news is company, science believe us for vigilant. the the but world on We also are firmly the for

suppliers, sure our the solid. our our all feel customers, we that that our prospects, So really that marketplace, do you with rock the on to want comfortable make staff uncertainty we're

of one that's useful like sheets really so improved are that the And balance things that, that for.

Galaxy Nature, a thing So, are working product, we're other we are right? opportunistic, also other Article Plus, to of partnerships the Springer with is, on. improvements lot The we're there partnerships making like

optimistic. we're so very being And also

to to a have the jump hockey And if stick on so we want that really to moment for that us something make sure so. we there's powder do really dry

benefits So the probably of having growing two increased those are that balance and think I main, sheet.

Peter Rabover

question. I Okay. Yes, guess last

guys mentions? cetera? PR in of don't and of industry think and wise you have media et like point Just you maybe there touching why you in industry Article you have about -- what uptick your know hockey an kind stick comment. is both Is from now there what Article kind more your kind and social guys of the marketing where where of the at to heard article nature, of fit I into think, Galaxy you don't recognized don't mainstream you galaxy be go have much how a you'll and and thought to

Peter Derycz

from science. you and and company [medical] that. at point, us presence, and constantly we're But a like you dollar I expand looked working we dollar obvious -- this. compare [ph] that a partnerships, way, be using science right? electric still companies that we'd I globally, when look they're towards hey, we're hey, said with the really larger we an Nature, vantage -- at of global becomes if that think about multi-billion the much the company million to my choice Springer We've scale many what really then Bloomberg love is though, aren't multi and to to building so somebody that fact or on it tiny of think times companies know And you smaller us part with whether why awareness think, do strategy I that brand our once know So

regard. stages upgrading if be as industry, And, I behind think very R&D as be. life very you're you like from And early you're from our the early sciences will a broad But that in your still not you moment think. your I that I But efficiently can the you're competitors. believe not perspective in platform, days, is still where using feel but there should company,

Peter Rabover

Okay, appreciate I Well, to time. great. thank your taking much my for answer really so time you hey, questions. you all

somebody Thanks. else I'll anytime. jump let So

Peter Derycz

All right. Thank you.

Operator

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

continued well Before call, statements statements forward-looking non-GAAP I provide forward-looking of financial by the expected in improvement maintain strategy events, during the company deployments Harbor company few today's of in transaction contain software and the executing management we its and terms important company's and regarding call future as presentation causations include today's be revenue. global and in statements sales its the that and Examples and of not products like the conclude statements will market successful call, operating to that Research that Statements use develop company's continue are the expected regarding to would and growth. information greater today's to financial acceptance Solutions regarding forward-looking growth and Safe marketing as this and made to made future expansion in revenue information. relating services will limited achieving statements the will statements but That include and barriers in include, platform that continued face during such company proprietary performance. of

future subject be those which times not of should as will were performance guarantee information this statements results at are statements performance respect actual with performance on are at to based that those or indications available be to at the the necessarily risks forward-looking and/or accurate belief or management's made by suggested results not forward-looking our events, the and forward-looking time achieved. from materially The by or future of will They statements. and interpreted expressed faith uncertainties Such be cause are results differ and and time. that to the could good

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

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

presentation considered accounting measures as accepted or and company's prepared more non-GAAP information about to as by press generally included measures, or of is accepted Please -GAAP intended nearest refer of The to Today's use the to be non in measures the in referred financial their SEC. information in the the detailed financial financial principles today's financial presented release. earnings substitute the for reconciliation GAAP. the otherwise with also measures a presentation this isolation, not U.S. discussion in to defined GAAP accordance

recording X, to for dial-in like XXXX. to through June available would press call everyone instructions. that today's I for today's replay Finally, Please after refer X Time of and be release Eastern PM remind will a

Thank for the you for presentation. joining us

may You disconnect. now

Research Solutions (RSSS) 14 May 202020 Q3 Earnings call transcript