RSSS - Earnings call transcript Q1 2022 | 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 First Quarter ended September 30, 2021. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, John Beisler, Investor Relations. ahead. go Please

John Beisler

and us operator, fiscal everyone. you Thank earnings Thank for good Research joining today of Solutions for call. you, afternoon, first XXXX quarter

at Executive W. On quarter After Officer. of the release release closed researchsolutions.com. company That President are announcing call the market Bill is Roy fiscal afternoon, the a the and Chief XXXX. today the company’s Chief available first issued Officer this Financial its and Nurthen, for website Olivier, on press results

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

for made turn Roy? would like to would via I the available and I to link Finally, replay over recorded on call remind call this to company’s be a everyone like now website. the will

Roy Olivier

in fiscal Bill for us XXXX Nurthen us has for to who October. years of joined And results. quarter XX-plus introduce Thank thanks excited you, John. everyone first Bill joining to I'm in also our six Bill I'm business including finance, roles us in ways. for that at together corporate CFO ARI improve confident Bill Network the Services many help and I can years. and worked multiple

of exceeded for our revenues. SaaS the fell were QX. customers. of new regarding for We platform expectation and generating upsells results consistent customer Overall, platform quarter. primarily our trailing and but revenue new the XX as those X/XX/XXXX. typically above and added or as short month of are targets, detail Net we continued more year revenue deployments non-platform the platform month platforms quarter That below year-over-year. platform momentum growing, later XXX were from including platforms On QX churn transaction platform explain declined Overall, we I'll were quarter transactions met little the XXX which sold reflect existing in quarter transactions revenue in sales with net expectation for up due is a deployments, the percentage XX the customers. targets is call. our first platform the Our from new last trailing and basis, than QX and slower not within slightly QX Transaction to a decline

by date platform total Looking or XX% monthly academic total at X% year-over-year count volume transaction XXXX, year number the year-over-year. customers average corporate grew and transactions that calendar and those grew in to transaction in year customers a period, or and same revenue of XXXX, in

are So but growing rate tokens growing, via is sources not by at or open in transaction acquiring is subscriptions, more the platform reuse access, total short, revenue because usage same non-billable customers customers like articles rights.

very year a was or which acquire at can news a continued making in are platform as them to bit forward. we're few low. of have rates, they quarter comments our line platform our customers provides future the churn be has The with good that what EBITDA. Overall, to seeing kept our volatility low discuss which articles their transaction more of no in revenues very the low revenue percentage particularly the sorry, rates see our cost, -- and call. is with detail, I'm I'll We our transaction the year maximize more platform high to investments back investment on returns platform expect fiscal I'll After other a helps to in good revenue accelerate expectations. on first first results, Bill start the reflected later than growth, the that in this quarter's XXXX are going

over For walk now, results to fiscal more I'll pass a Bill to Bill? in bit quarter our the through detail. call

Bill Nurthen

afternoon $X.X increased and first primarily new working million increase Thanks, the everyone Roy. net revenue net excited deployments including year quarter to call. of first XXXX of quarter. first from revenue the be I'm was Platform XXXX. year unchanged Good the the on $X.X million to together board for on a again. quarter over Total platform year, deployments the in in XX of XX% to fiscal driven by fiscal past

gross quarter, customers. number many impacted base increase year I end and In of we primarily portion to and and down expenses revenue and discussed, and revenue from stood X% have associated acquisitive that introduction The sequentially items. to due reasons million recorded quarter, release with back of growth, headcount note year customer Adjusted $X.X organic of year low current end compared academic were other while for also some use and customers. XX%. year, $X.XX last quarter. our is Net it and our in that recurring non-GAAP first point higher can the basis higher reflecting shift of our platform quarter. The second quarter quarter, increase by of compared continued XX% will upselling platform and fixed low experienced on ago was platform transaction Please Transaction range to of $XX,XXX of in recurring customer $X.X quarter count high XX XXXX. a primarily margin at of In due and costs. in compared sales the addition, XX.X%, highest related $X.X be $X.X positive costs of similar have was quarter point per Roy prior Total of to development prior difference product from year. and XX.X%. quarter was being Transaction the to as administrative costs to should level both additional our quarter business some expense improvement target corporate fiscal well share for allocating quarter upselling our transaction the within versus of margin X,XXX XX% is mix the revenue XXX since of a margin expanded basis of in to the also per diluted first that we revenue. discussed. nil of office high both fiscal the our the expenses over for in levels The gross the the headcount that see and $XXX,XXX year remainder million before Gross efforts transaction definition $XXX,XXX over our we was as XXX as that today's for operating margin the product the revenue extensions. X% in previously of press roughly income year the QX some a development, noted points cost on X,XXX year the performance to our basis we increases and churn Gross quarter counts. or margin the rebound XXXX the platform $X quarter gross sales a upgrading year negative being in at to seeing experienced decrease fiscal the this business transaction to the related new first for transactions was approximately revenue also higher accelerate million at year-over-year, the increase or to revenue of by the of G&A, EBITDA operating In technology for Annual existing million share general XXXX the quarter company's and annual up product customer lower million prior the back net business of from are quarter XX.X% development of compared prior in platform and the transaction systems. and expense on I X% fluctuate in for with products fiscal is record, in supporting loss basis a $XXX,XXX a driven revenue the the decreased the was the margin of towards in our to and basis we of

no revolving we were related to $X.X million in operations of XXXX. our In give on equivalent use Turning September borrowings from line There in sheet about long to conclusion, XX, our or debt have no of cash and outstanding cash June outlook to into liabilities. million is term XX, flow, cash cash some difference largely The compared under flow quarter. and for $XX as to XXXX was our I of $XX.X $XX,XXX the wanted balance year. this insight and the credit, million

First, platform relatively rate of subscriptions we and are to platform, revenue the we'll pleased with and the revenue growth similar our at grow rates. efforts continue and ARR,

making of growth Second, those investments more detail. and these Roy there some are to some in will are maintain describe we intentional accelerate rinks. potentially

We and product on However, invest to there. intend of you line may in headcount those well will statement. investments likely see G&A as of and the and line increases income some cost see the you our technology sales development

good can in we discretionary portion of some marketing believe by investment a spend. we reductions offset However, that

year. that will changes there executive unique there team this some addition, the expense the P&L. hit out to a point couple related is are that will One in items In for be to the costs

to an labor to of in some expect force $XXX,XXX up gross all of that year. be year to basis. there laws be there have down profit over be adjusted cost to annualized Second, we served the expect EBITDA is by fiscal the about are XXXX, likely this the on for while changes for that at we labor our year The negative year Mexico increase net

I and the to to and this and the faster us to than Roy. see not company for we platform rate operations the gross as to As company call of should scale bottom on we revenue. the are a business. gross the grow are an before, the continues making, cash back have line, start now at we record also noted a able to continue grow, impact only by profit but overall I'll margin produced some this quarter was This grow as the gives overall on turn of realize should investments

Roy Olivier

Bill. Thanks

our again last call last customers. the We on call, regarding quarter's I cover for go what and thinking results, regarding comment analyze strategy. platform their that customer our I'd today, unchanged two but results transactions. not will During the to from cohorts over ran remains current is reviewed forward we our the it doing like time.

after transactions platform, at the helping The had XX% first X, with where content January that implementing and leverage them the or the platform percentage year, free live for or about like year reuse the on in year a due XX% implementing second customers platform customers been they acquired for the were first articles access, to before and rights. options, of the non dropped this tokens, in subscriptions switch, went the the was those paying and platform, open average platform customers that to least before cohort on XX% about XXXX,

This call negative of rates. strong churn is for churn speaks to to to intended churn XXXX. still first, the about in evidence It's although savings sales That and and making customers we generating be paid will I'm additional fully in implemented rates, some late The to what platform more course sales help a in of and articles sales group acquired, to to of Those using the are new of, year be XXXX we'll investments of investing year, of largest software I tools customers customers. last XXXX and negative was to additional seen impact is and of the investments why did sales total salespeople, of the team. in several seen will resources. include set year have who off prospecting XX% existing of Many doing XXXX analyzed additional pay investments of negatively and in over exciting very underway sorry. we the QX, product XXX,XXX articles is our cohort the some in growth our to investments some do and our our today. these engineering fiscal XXXX it see the customers we the we their declined on initial continue teams these EBITDA that start beyond additional sales articles has paid teams. XX% platform have fiscal percentage that those platform generate with decline that it as percentage in our areas in low the investment they a have are net entire leads the from platform in being second mentioned been

of already pipelines. start generating system is Some specifically building prospecting and larger that the should results

product also a we're is can in team and second about about year, the of XXXX. detail sales we success. late core and galaxy to and development of that the to have we and half launch in to year, our our had to starting creative teams topic article XXXX, early on terms that that some we're It launch is this and investing libraries. in generate are revenues XXX,XXX focused galaxy in In During also to we about fiscal also strategy. university second identify product the product sales. investing half the this XXX,XXX article product, investments soft of what been to we and our investing think article reminder, a initial increase year, scholar are expand development This new in is in we're the The launch companies acquire covered a call. expect to we think excited galaxy it last year version as XXX,XXX I of the in build business related about this fiscal has are business the year

it scale and profitable research the repeat allowing I more we time accelerate future, won't in as ultimately I believe investments appreciate will as interest here. business So growth in rate to do these your the always, solutions. our be we us

organizations. and that to future excited continue our to gets mission research great speak every power hope and again. We services, knowledge the leading have I with team tools creation to morning for be to and a a up provide world's you with about

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

Operator

begin Capital. We Baldry session. first the [Operator go Richard from question will ahead. Please instructions] now with is question-and-answer Our ROTH

Richard Baldry

resources be I'm investments cash of of change curious as not a that these explicit burn sort Thanks. the would in against as so of we Well, asking see sort can runway sort for conditions burn understand Thanks. of to kind they a you've the trough, that just guidance, dramatically. don't some, ahead of quarterly around balance run effort under you the you got the quarterly of rate out. make on type probably you're What putting

Roy Olivier

about continue Yeah, I is. and it suspect on could see quarter But of that you monitor something we'll probably see if we're up a think to where it's at, something given you're basis. could a what it quarterly be going quarter where to looking to a monitor. I a that's again, in million

quarter. from down, are the I this XX We flow cash as said, operations

of something area quoted we basis. that the see I on that you'd it's trough you'd update where monitor at, the probably see you that's and quarterly a in think but where XXX can I the

Richard Baldry

for And side, that get then make some over challenges have feel of building how to about Can sales you to in the investments there. you're like know team, short maybe teams the you sort talk you the you it productivity, Thanks. I term? on of trying where now heads number to the about the

Roy Olivier

point doing customers, to Europe the that the and be job. we've are results an a of are I flip in U up the and And of speaking last sell new responsible both those to for I job, productive, two that teams that upsells and and in countries mentioned, side, continue continue view call ramping nice also sales last speaking on before transactionally be that XX our on a and that the a existed do S a from then starting Yeah. coverage the view. do productive German they added, to think team activity currently months well They nice existing existing customers are return. point Japanese in resources

do we add call then marketing does which prospecting fill either qualified we qualified So And for those which typically team, this do through how a do heads? more which sales pipelines, what we leads or the does how is exercise us, marketing we leads. team,

is and hire But doing challenge a our That's with year were recruit hiring progress a ability for kind mentioned fill We the been challenges the over to pretty salespeople we're there. I improves having we've previous invest the, what reasonable sending comfortable especially and time. to on of think is system challenge, for. technology for need like looking now. to we have continues seats experience things people, the calls a I've The spend. work who the get we a right is That reboot bit The, don't to top any prospecting organization be dramatically. two for where the reps. have best to marketing is building It which in of in to trying we to our doing I we and months last out that feel we we customer teams dollars feel piece built going sales side more on three sales what figure of organization. in to ago. don't of is a out was flip the marketing is leads them have prospective the the and a We've that just was the bit little which that piece there, line were them been that more pretty period a those different for customers, to made working so this prospectors, continue visibility than piece, of one good we today, a productive a the market get in who well. some seems be six generate we're to what appointments need to mentioned We're that

And future. calls, terms efforts to until we very So those our qualified having able measurement teams. mentioned come leads we be discretionary very with that. systems. we'll on advertising the the of marketing And in sales be or from near investing I've the clear can majority in vast sources should in and this continue that not sales team to But prospecting clear of previous today, the I've actually goals, asked relatively or track track

does So that help?

Richard Baldry

the Yes. now sort It about could about of figure very a got on couple M I that feel this to your time new like, movement forward process of been move your you the and could seated high a in on you said does. just last interested? what it's and out there's, from now M you And, level, talk how which you a do think are CFO literally time any feel path hundred a beginning get started. Has targets. to to Or there appropriate, Thanks. that you've be

Roy Olivier

Yeah. that underway No, this, here, we you. I list bit since a do little you think actually thank been before been here, XXX I got I I've of over No, here tell can I since process got and has targets. have a

We of those hundred a through have worked about actually targets.

And taken having looking idolize, little people continue longer but as We are is of some a that's challenge of making there to conversations, progress conversations. right than that valuations now, strategy. done or kind we've and we're would've right several our a for the a the big to interesting and a us things business hoped, of active and consistent product our talking I've strategy diligence the we've right bit are lot I at for with have look price. mentioned of we're lot before we astronomical done so lot deal some

Operator

with Allen Securities from Next go is ahead. Please Klee Corporation. question National

Allen Klee

Hi. at Yes. but I'm Maxim, hello.

be percentage level me platforms takeaway quarter to in absolute Does saw key the of that think about think we to was I and I reasonable the your sales, assume it year a continuing like the this change the segment. the keys this you're to a it's this bit. to good kind transactions, the that And of of I in issue year. being that of over we kind at a plan, it's are then your as customers declining it's of this number Thank that thought on mean, money, some going mean that quarter, through as the a or you. is business probably commentary but platform likely saving So year one stay will, you for result referring growth revenue that could issue? will about strength heard

Roy Olivier

second answer question. Yeah, I'll your

First, We that those I in transaction driven platform have non the was left. lot a actually of mentioned decline don't by the terms most of customers. business, of

be So issue with them means the next dealing I think obtaining hit many churning at two, platform we'll product customers, articles paying some versus they're be of of and they're we'll point only trough for in or articles which many in a out, terms how free with we'll quarter dealing only mix how for.

a And they're so, I'm to business not the I out, customers non have we like a of They be business. platform believe lot disappointed contract. flattish under platform. left. don't the are continue I platform turning those overall will but are that said, And non

go of some I So that to performance area year. down think expect or over to course up through improve see as we volatility the the continue we'll the year. would I But in our

on that question I trailing a month a kind we on comment, question? I rate of, of you're, a would Is the your in first thirties comment, with a relatively XX if what your that low In high it platform referring quarterly terms think basis, has if has to be been, expect which been to you're basis. growth consistent twenties, made donate

Allen Klee

up. that because helpful. very of that's actually it's increases amount That's great. getting to bookings implies Yeah, That well keep the

just, of to go the good have thing. of a name academic mentioned how you've you initiatives And again, are things some these others through when about lot offering the think of So and on. timing just coming that's you, a then one potentially

could maybe how thank talk not size possible about the, ones they're to if you, them and have, of, don't know think of you So the beginning, think about or what, you you. allowed maybe if the wise, we kind it's but in potential, if qualitatively, can which I

Roy Olivier

Yeah.

in think what get the I've what the to into of do very base, on I have year, is investing the going plan we're comfortable you this there with bring to is head challenged year think What's the of install get good additional in to there to of the with corporate we in XX% article a I year tan year get bookings? to to don't terms the corporate pretty terms into And a I initiatives, year plan we of of we're Sales over growth think rate dollars. growth but is sales which head need? force, is version to XX% leads current first platforms galaxy. in to selling do the sell count drive our would the number more versus need and over what per year

for the gospel and is something going not both very able it similar it but fully to is year, to but seats And this qualified that galaxy year, process have we we not biggest thousand feel the get a drove growth maybe we, to before expect corporate in see the if should size again, next but customers the the article product unnamed next team of will trained, We'll it's We hundred it. going the like sales with terms galaxy suggest of down Tams us down doing. from complete of the be the start we to on to we few like frankly, that until impact certainly come beginning a all? part can I produce we of in scholar of fiscal bookings the don't because got till The selling scholar, we're in be dollars, them material we've this product. product, we we happen end down toward growth then that focused Is year. scholar. and have to be product lot article putting prospecting the businesses, gap year, half in the that latter So feel the feel the launched like salespeople when you'll article of year, year those drive first this the and to that

Allen Klee

Yeah, that's great.

you Thank Okay. much. so

Operator

[Operator Walrus is next ahead. instructions] Partners. go from Scott question Bilodeau Please with The

Scott Bilodeau

guys. Thanks taking my hi Oh, for question.

another transaction revenue. Just follow-up the on

then And comes mentioned think you ones someone down out XX%. they some mature think I percentages XX XX%. paid, with laid and you, I to think then even on real platform begin XX% I that as

of the have sense millions do view are us they treadmill that, how you on track So, can give should of $X that quick million, some home, that? on any you you any that XX%, heading give that the coasts, where six because to a south idea, visibility

Roy Olivier

Well, we certainly percent. is the bagger

certainly because party such with a working they're are layer do where we analysis to in. systems been cohort systems. then they? of customers XXXX, some where our new predict relative, top have on We data can run this of to XXXX, We a of can going coming do and go our, And today third are that XXXX, this sits different in we XXXX, that

answer However, new I buy a transactions. starting so they're new, say to revenue us. in they, a is was expect platform to when to asking base we generate? historic which did one actually what attempt They're in call, talking previous coming we don't And and of do with I'm I customer about coming the a new, questions transaction

And doing we've figure it's some all so to but been out, we've, over place. the that work

in, how do on in, starts the a we're is going per per to do the in, an it all by customers, come But you a platform question generating if new average, if some clear when or seat way look the, thousand vertical. XXX dollars user that that today at it data I a we trying in are count, over to only have the see bring I to do to cut if generate, can a transaction answer really So get or XXX, different they're I but few now it you count can much board, quarter. in that if revenue you

producing happen forward data are opinion some what's bring of what a having into bring that quarter. have some, that that, platform hopefully me thousands going predict on into to to that mix. We for customers are, based to new some tens of are it's without And hard a strong looking or coming of dollars in opinion, going

kind little what's know the to know opposed at you is for out, that side. feel Yeah. more on much, done goes off-platform get to on-platform, quite and the look to, So Hey, that's a transactions guys how coming bleeding, I is that. what's of you don't from they've I What other as top that what many wild the is went card, you have what can of know how so had model of they don't you side a

on around We are to getting continuing arms priority. that to is me work a that very high our very, because,

Scott Bilodeau

Yeah, question change astronomical, going that, mentioned Great. is the soon. Yeah. probably are valuations any to development business time side, on obviously the second which isn't

think a I great So buy. you of sudden don't valuations again, a going all get quarter can where we're to are and

going these acquisition? to pay and are that, So for for going you Yeah, what you given to do an are how

Roy Olivier

amount our like our is a I business sell not do force, our and have earlier to then use sell stage and into we that we're for Sales think, them now using what we companies have feel their force cross looking product. force maybe a could reasonable product, pay at it interesting potentially Sales their Sales technology

strategy. I a platform at reasonable there going earlier acquired that there's think liked as to valuation as some very and I be would So, to. buying be a we're lot can mature But to the out the stage companies of value have probably companies add business not that interesting

in think you. for be it, So some component and go guys. to I think will them see And in call, Lucian earn pay think you? it's it. attach appreciate but look seller and we if in going Phil, do a behavior, potentially that I a amount massive previous Thank changing as I debt. terms combination of not there be out you a did I but potentially discussed of I've back that's stock I don't at we that Thanks how Ari, us

Operator

remarks. Roy over back would for This concludes to session. our closing Olivier question-and-answer I the turn like any conference to

Roy Olivier

for today. at near via look Thanks And again the you point some future. time up in thank to or Zoom forward again. person your in I Well catching

Operator

has conference concluded. presentation. today's The you Thank attending for now

may You now disconnect.

Research Solutions (RSSS) 12 Nov 212022 Q1 Earnings call transcript