RSSS - Earnings call transcript Q4 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 fourth quarter and full-year ended June 30, 2020.

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Steven Hooser, Investor Relations. Please go ahead sir.

Steven Hooser

afternoon good and you everyone. Thank joining Thank fourth for Solutions today and you year-end for quarter fiscal Research call. us XXXX earnings

researchsolutions.com. On company’s market quarter fiscal is release close announcing are and today afternoon, the Executive full-year Urban, with results website a President on this Financial available call press issued Chief the Chief Alan Officer release for Peter After XXXX. Officer. its at The company and the and the Derycz; me the fourth

For Peter their some or like the you variety recent a be Before begin Reform to XXXX. results remind under filings We will investors. statements which to could future provides factors. will for Act Research of the A company’s that release with measures discussions on useful to including Solutions those would Alan press remarks, we I Litigation Actual the reconciliation made afternoon. may call, GAAP and risks and prepared today issued Private due are Also SEC the of financial in measures you of the information forward-looking refer projected measures impact certain conditions. non-GAAP differ earnings implied to Securities of today’s results this those more operating the believe detailed of materially that financial reference management and made from

Peter? everyone call to the President be over will like CEO. remind this Peter call recorded available that would to the on Research link via to like company's for the Solutions made would replay I website. and Finally, turn Derycz, now and I

Peter Derycz

our resource hope an for safe position. of time organizations of research fiscal of We partnerships, medical save us scientific, COVID-XX needs. stronger our the product grew shop entered represented information in significant enhanced and to for a as technical continues. for as XXXX Fiscal and helps strong efficient system our exited progress remain you everyone continue revenue, Steven as the NASDAQ you, results. fourth platform our We one joining for customers stay much tools of Thank quarter year thanks our and uplisted the a another money financial XXXX company. offerings, year pandemic and into to to and all We Galaxy stop all Article and record and a

us XXX segment the quarter. net added strong course Platform XX Our the including revenue We led year, to growth. deployments of over another the of in year fourth

in and increases the terms business. over transaction doubled customers more count. Platform we past doubled revenue total of the our fact, The than platform In increase two have also revenue, nearly business deployments and led transaction of deployments of years, in to our number within

features our we Document broaden Evidence During winning leader Literature Article the number Review in the Software. integration Service, a Delivery past signed of available we of year, award combine to offerings. Through of Partners, DistillerSR, our Galaxy, with the partnerships industry the

We through gives additional small of with scientific our also XX% platform to no launched partnership Springer medium Article which at literature customers access world's transaction our and the Nature. costs Galaxy+

investors benefit March Capital which Market all our continued and potential our liquidity, success increases on pool work hard efforts Thanks strengthen Platform our we our of way successfully move articles users visibility, Galaxy. segment fiscal providing Internets their connect the Article Marketplace, Galaxy to was a one uplisted to ability greater enhanced Galaxy during to This sales long-term. Article the and cost. our to of the to the added customers features to in of simpler Azure should DistillerSR integrated NASDAQ of and sheet, the click the XX. In we market providing capabilities we And faster to lowest XXXX. balance and with at institutional July, Article Additionally, shareholders and April provides Microsoft fully access broadens

quite Finally, initiatives, been that our and virtual our this us been have model Since spending time running under we’re for COVID-XX. effects rather a while, than our we modifying operating adapting executing have focus operations. unaffected fortunate key on the by a largely of operations allowed to

our COVID seen has the them In their efficiency. to net product as business found services use Sciences as fact, field Article Life within help partner part and many from research SaaS their improve benefit in of and have research, our Galaxy solid the a

users to provide to continue gadget, copyright which free COVID-XX our research provides We when viewer materials available.

I on assist like this we’re This to detail shortly. over to to tirelessly find those and through further in walk fourth it initiatives therapies team implementing and our results continues working virus. XXXX fiscal year-end But financial will day. treatments to proud detail. pass quarter the to Alan? for greater various We’re give I'd our every Alan to motivate first,

Alan Urban

Thank afternoon you, Peter and everyone. good

For fourth was the total from increase X.X% of fiscal fourth XXXX. the million, a quarter year XXXX, of revenue $X.X fiscal quarter

XX% existing see continued release press for today's and by subscribers. subscription approximately low up upselling of $X.X year, in from $X.X how we including platform and other last non-GAAP fourth year-over-year a Platform terms. sales in net increased revenue to annual Platform ended increase recurring and reflecting revenue the and quarter. driven annual Quarter Please Our revenue X% sequentially and recurring define deployments million, efforts our primarily XX with churn XX% use of million

total count was $X.X million the Our the transaction our customers prior-year X,XXX to revenue fiscal essentially to in of to of XXX,XXX basis active and approximately X,XXX compared XXX,XXX quarter. Transaction million increased a year-over-year the quarter active from on customers fourth in even to $X.X X% increased XXXX.

XXX our in as lower gross sales of margin Platform to $X.X of $X.X is improvement costs to in basis decreased decrease slightly the to within XXX the million XXXX. points increase the Net general ongoing increase prior-year data quarter. revenue operating in year margin primarily the to primarily of attributable expanding XX XX.X% the higher the copyright compared the and result scale prior-year Gross per share due compared to and gross expenses. and margin, higher The is Turning The to Adjusted The mix our Total to increase improved a XX.X%, previous was to attributable towards costs. quarter. administrative million $XXX,XXX quarter third-party a basis compared business. year-ago higher $XX,XXX by a to over basis. the point was shift business quarter quarter and the on business to platform margin primarily quarter negative the margin quarter business. a gross expenses point our fourth XX.X%, or in EBITDA in transactions loss over the basis recorded marketing nil $X,XXX $XX,XXX to were total improved

$XX.X in fiscal XXXX, fiscal $XX.X revenue million X.X% to million full-year versus increased total the XXXX. For

fiscal revenue ARR year-over-year deployments or Total at million, year-ago. compared as was Platform to XX% of were to from XXX, Our subscription XX% a increased million XX end $X.X of $X.X of the platform deployments XXXX. June a million. net XXX $X.X increase

million, XXXX revenue Our count X.X% fiscal transaction XXXX. Transaction XXXX. to XXX,XXX XXX,XXX $XX.X was total from active full-year a grew from customer increased count approximately from increase and to

due the our our Moving prior a prior-year. XX.X%, million share XXX in for XX% third-party segment factors high-end the has for decreases year. margin gain fiscal was primary a due $XXX,XXX the in to or $XXX,XXX fiscal The points costs basis marketing total gross or copyright business personnel compared exceed data $XX.X to low fiscal to was discontinued the increase The XX%. operating increase of a XX of in XXXX loss margin us costs. EBITDA per were sale leverage on onto margin basis XXXX. of previous margin $X.XX of our was was to our administrative compared million $XXX,XXX Adjusted NASDAQ of $XXX,XXX transaction recent An $XXX,XXX gross year. XX.X%. XX costs, margin, fiscal meet uplisting. Platform sales by and operating including the to general to points for of behind our of XXXX Platform compared business XXXX. the allowed expenses improved The fiscal XXXX fiscal to improvement primarily XXXX to $XXX,XXX to and loss gross in the Net to in in Gross in a fiscal previous fiscal of fiscal XX% compared increase business loss $XXX,XXX in XXXX year. includes target range greater is an $X.XX XXXX margin loss scaling the associated improvement. fiscal the to in Total were high a per fees Gross of from operation compared was and and fiscal share Lower compared negative provided $X.X the a primarily was which or the positive consistently with

XXXX. of under XX exercise cash XXXX operations, million our and debt and to on the million The year. equivalents Turning borrowings attributable as cash primarily There versus million we $X.X was increased line of balance XX of our X.X generated our $X.X $X.X credit million the or June revolving cash warrants sheet, were long-term have proceeds June no liabilities. during no increase from outstanding from to to and

steady, positive to mix, further continue margin this our in we position. total expenses strengthening result EBITDA, As our revenue larger gross expect to operating flow will financial continues business our as part cash income, Platform's become a and net increasing and of and our profit,

done and growth However, sales, product our to by if we’re stand use accelerate can remain in results. be we disciplined, capital efficiently and in with and opportunistic of also while ready it development, marketing investing

We to balance able vigilant And I'll our back turn to strengthen able have sheet Peter. unprecedented Peter? during in call we environment. COVID-XX react pandemic. remain quickly to and the to this been the changes now

Peter Derycz

objective fiscal year. main into Thanks, is momentum Heading build XXXX, Alan. experienced to to the our last continue on

keeping we and years we financially resulted our R&D Article sized remains large to equal size, corporate in and sales Alan has the both all of including Expanding Galaxy gains a marketing while and and major The service. position small platform the medium our multiple rigorous centralized and businesses benefits. a same as have much Selling companies provides meaningful of knowledge teams and a better a I were access pharma stated. offers library, previously two those reorganization of our focus companies not priority than enough requirements to year-ago. market in top strategically ago to We’re

First, the transaction business. carries of margin our higher Platform the much model side SaaS than a

purchase Platform revenue we users similar to capture as Second, users. non-platform articles, transaction individual

our increase reflect create to to we’re platform Platform customers. additional functionality new price services, Third, as we able benefits the renewal our provides to contract the upon and features,

year Michiel customer Officer, this his sales and rates Product ongoing for segment. We success to recent years our will prior the net at Elsevier. hired focused fact, spent der Heijden resulted Product to Also is churn recently as Chief to the negative a the the of on further platform years. of plus almost $XX,XXX Head X% van of strengthen due stickiness centric platform the group our over development. Nature significant focus our year, a increased and development was our In on in Michiel technology in efforts for product price Springer to innovation retention past on previous level average. Michiel management This product average critical and to product has capabilities. essentially And nine our high Management at our that development

MIT been could One from product building Management even is pretty not to SaaS focus future And me forward more. our SaaS recently growth. shareholders led of the while strategic with we growth product better our that on a key look we've at management. expanded platform, I getting of Review shared stated article with good an Sloan agree

launch. beta version launched as feedback also the are into environment. Article group production on Scholar forward our of to We universities beta their being a select our and plan looking implemented we're we now platform of A Galaxy broader recently a platform

few few have roster a Over years, universities joined of transaction the last our quite customers. the

and the of changing result a As cuts access budget pandemic, other knowledge rapidly. assuming the universities way COVID-XX is factors,

needs available market Our to regards tools, savings and cost for with efficiency, Scholar Article creation evolving knowledge access, intent are is ensure is Galaxy and to rapidly. management that

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

about product like demand operator forward, for back continued beyond. improvements, turn and our opportunities partnership the Operator? strong We XXXX on now positioned generation, fiscal sheet, call lead for the be continue trends in balance that, with the progress to I'd and Q&A. additional we’re better With to over to combined with tap the optimistic well moving

Operator

you sir. Thank

Peter from now Capital. [Operator will question-and-answer begin Rabover The comes We ahead. session. Instructions] the question Please Artko from first go

Peter Rabover

better every I few just wanted guess guess drives marketing asked to question it deployments. I you guess to idea, that could feel have you you how Hey direct better and had choose I Do what one touch would this quarters increase said of this on hire be in that you a guys, color person that increase if to spend And appreciated. guys will Alan is growth if curious more control X I of revenue results. relative that but your it in just amount spend any how

Peter Derycz

to to starting well. some Yes, and the we're acquisition a optimistic we inside there are But on. some getting our that that so feel customer we see unknowns definitely sales and are to costs marketing improvements operations where trends in point as do are

time, this more as are and We exactly our quarters that terms like. what have where how filling up to to seeing feeling we're But well, of we some our pipelines certain people's getting compared today numbers lot board that's a a pan few better. new out we’re at partnerships coming not year on those sales under belt, of definitely, we’re certainty, look have going in that last

And costs, as customer so deployed. and we we reduce spend that the become feel more on can the that acquisition effectively

we that So feel we're spend the benchmarks and on and improving, that category. ones that to indicators lookout, all following in we you. asking the increases the But numbers, be do effectively that are the like we're have likelihood you KPIs we'll the which more precise don't were able for the definitely

Peter Rabover

it Okay, a that. with win explicit the little you've question. obviously wins interested curious that I'm ones deployments. we're in and But that But more some good not maybe success you where on didn't tougher had was

the you why Just some don't curious win accounts. reasons where

So the functionality. competition the and price,

things of So, nature. that

Peter Derycz

biggest point in to objection talking Yes, unavailable I the when time prospect. sort at is of think budget that we're that

where regardless in cycle. find their So are we them, of contact budget year prospects throughout the and they

So at that at that, heard really we're I've for I think just time. the in biggest this point not objection budgeted is point this that

call a I of going, the demo time think by a get time most the what irrelevant. or offering we we're

perspective. big average And increasing. or pushback, even is price sales say product let’s actually So, price see our

terms them a really they will we it's make at budget on of can it budgets, So the matter And breaks then did them to budget got in the not, time them. and and the if put hit actually we purchase. of, where in their back right to year are radar

Peter Rabover

Okay, how want look quarter a going? and to Any away finishing color you week I give us from for mean we're this this quarter.

Peter Derycz

I seen, the could the guidance say Yes, I specific out that, continuing. say we'll the put are positive we've trends But on trends that that. can

we so continuing And are the yes, put find think to trends we're out you'll eager the positive direction. next quarters numbers. in And that

Peter Rabover

to don't I great. Okay, got it. want play,

the So so call. I appreciate much. somebody answer. come Thanks for the else I'll let

Peter Derycz

right. Thank All Peter. you,

Operator

The Thank question Please go from Weis ahead. from Capital. comes Scott you. Semco next

Scott Weis

what provide and customer? that Thank you you two and up fiscal the can total go competitors last you love then be business very identify related year can one platform Guys you to much. expected against and in of thoughts years the mix as do a for revenues some do you and potential then the XXXX? to secondly, to percentage when I XXXX question, annual would you and approach towards to shift hear you revenues guidance, And

Peter Derycz

Yes, that point, at of out not this kind we're putting guidance.

always we're are at it. talking about So this but it, not point, doing

any So I to call. provide to wouldn't able this you be on

administrative or of piece do our felt together maybe well. and we're we're is company seeing some companies or software it that sort pieces and our competition they're systems into we’re are disclose top starting terms staffing software built those and XX-K what But things of of that out or always more there, in that and using In running some and tools like when to we are competition of as that, a names internally yourself. of other trying that and what people to solution tools new

do Things yes, Yourself model. in a So Do and It call from would setting code aside But try than can to lot It Yourself your this to own be themselves. automate things it let’ more all say scalable your to own make writing Do manually. people XX-K, companies can the what or up we the approach I'd

Scott Weis

And if may. more you. one thank then question, Great, I

You expect cited long around do put COVID you you benefit. a How can about talk you to continue that you some expect And that? for? numbers how Can that?

Alan Urban

around and seen what been out But people Yes, numbers customers put that office. in prospects significant organizations, we we've cannot COVID there's move it. many appeared and is to disruption of the when had

that staff Yourself And proxies let's so say or become cloud what the as we're office a of It like more that finding people the moving based useful. disrupted. get result, solutions And ours, as out Do is

yourself, the the And lot scalable or companies if some just on think edge solutions. based are I doing cloud were using of a so benefit teetering realizing of I think, you now cloud using solutions, of

So seeing we're definitely that.

right person. going Before sales or yes we we face go broke longer customers COVID can to say And the meet face let we're marketing out, to no couldn’t ceased. to, little concerned, in when were a attractions first in conferences, all the because prospect we

that before okay, can't to is are to meet were adapting them. causing greet going fine the them to we so little sell if But reality is how more concerns, that And you well them, and communication people we and we’re pursuing based than that the of pandemic, customers of platform benefit was talking that terms out our maybe sort that’s what in actually then cloud found are relevant

Scott Weis

thanks Appreciate very Great, much. it.

Alan Urban

Thank you.

Operator

conference I Mr. you. remarks. Instructions] to [Operator This the Peter over turn to closing would Derycz Thank the like concludes any question-and-answer back session. for

Peter Derycz

Yes, for attending. well, everyone thanks

super Our team, motivated. operations entire are and team

than a we ago. We’re months were spot today much in better XX just

the on next continue us. pretty Thanks exciting So you talk to we're going carry work and forward quarterly much. initiatives. so our hard soon And to for to that's We'll call.

Operator

call. concludes This today's conference you. Thank

day. You Thank have and for may your participating you pleasant lines. a disconnect

Research Solutions (RSSS) 24 Sep 202020 Q4 Earnings call transcript