RSSS - Earnings call 1 2024 | Research Solutions, Inc.

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Operator

Thank you for standing by. Welcome to the Research Solutions Inc.

First Quarter 2024 Earnings Conference Call.

As a reminder, the conference is being recorded. [Operator Instructions].I would now like to turn the conference over to John Beisler Investor Relations. ahead. go Please

John Beisler

and us operator, Fiscal everyone. you Thank Earnings Thank for good the joining today Quarter Research for Call. you, afternoon, Solutions XXXX First

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

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

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

Roy Olivier

XXXX for thanks joining results. and for John, us you, our first Thank everyone quarter fiscal to

will both of to going with sales, growth $XX to fiscal around and create overall in great us. detail. in XXXX some record discuss core help products and several help and on, is a messy by search expand us including the opportunity number advanced quarter M&A or acquisition things will in the business, customers. with after has the the Bill represent I'd The an bit terms discuss also data acquisition that a ARR our tool, business revenue including the sources of market call comments. due the new There's of wrap we million, up one which discovery over Bill? It been EBITDA new During in our QX. new to completing terms walk in the cross-sell happy This addressable will over workflows I'll revenue, Resolute to on strong which of more comments. us requested through like going in tool launch with I'll and in that lot total of then financial a AI. quarter, our performance things Bill EBITDA pass good XX% product for of marketing, I'm segments, and you Bill's a our detail, some results performance costs in quarter detail first had

William Nurthen

Thank everyone. and you, afternoon, good Roy,

all a given as a first result, quarter into our results it it the XXXX. Resolute's to I include our The quarter, Please from note Resolute. this Resolute entity. integrated captured on and our our fiscal provide line Resolute revenue And practical should are that XXXX XX%. from on a operations noted, we XX approximately increase Before have $XX.X excluding not that and of said, was of some existing our quarter AI was results on of July part rate, Resolute's remind of I was as of business. such, months acquisition insight the for be am XX% quarter report only operations platforms for as to first growth only million, will fiscal is like Resolute inclusive X of for the this revenue first P&L. approximately I'd X ARR affected to Total to quarter performance.Lastly, the begin, everyone how of separate able months it it P&L be as That

year-over-year, increased see $X.X XX% deployments driven annual revenue Please was for platform last and items. efforts, we upselling of up churn revenue, We revenue the Resolute, and ended subscription which release with million. revenue the and million recurring how added recurring platform Resolute associated sales XX% a over approximately define and with quarter little low subscribers year platform of Our growth increase net continued the new quarter. today's million the ARR to for reflecting of a The press existing from use $XX by in platform other annual $X.XX $XXX,XXX primarily transaction. from our of and non-GAAP contribution

the of of our XXXX. related Gross due which to revenues, mix business. margin margin. for decrease are increase to XX.X%, Our revenue of a generate our revenue X,XXX, first FIZ transaction higher-margin The the additional higher same first of year related ongoing growth, the first a and due prior from inclusion increases million, $X.X business January customer towards to the XX% Resolute's total from for X, decrease transaction XXXX Karlsruhe Platforms the to increased XXXX. from shift compared primarily The XX.X%, to net in point quarter ago. the with was The the XXX-basis platform period increase XX.X% almost from XXX on quarter fiscal count improvement a was gross over the volumes resulting transferred a organic growth contracts margin lower quarter quarter transaction effective The active the recorded quarter. of Platform is a to year is

will into business, gross our our I suspect platform Going forward, decrease. consolidate as margin we Resolute

$X.X basis should quarter. it However, initiatives, increase were quarter our was in Total to resulting attributable expenses compared in margins. increased range in Gross in XX.X%. remain to Transaction million to XX%. between XX% $X.X points and primarily million prior in XX the a business increased operating year the copyright margin The pricing

the $X.X M&A in $XXX,XXX items, to of in unique costs related associated include $XXX,XXX associated series a with termination all quarter's about of $XXX,XXX classified of costs of G&A the and compensation. roughly of on exception which appear former as P&L million Executive This stock line proxy-related that activities the in is Chairman. $XX,XXX including with with expenses, legal costs cost, These the results our our

Resolute the of quarter, operating costs of development In approximately appear addition, product which added of $XXX,XXX in on technology line most and the P&L. the

amount of stock or plan the implemented was not net to share prices, where $XXX,XXX $XXX,XXX for EBITDA of positive $X.XX also $XXX,XXX higher $XXX,XXX to $XXX,XXX loss was at additional a $X.XX per year of year quarter. to which the related quarter quarter shares in or equity prior year. compared share in Adjusted the stock is Net compared from for the up stock bonus compensation negative the long-term the vest quarter. Lastly, roughly expense income diluted per was an last until QX restricted ago

Excluding Resolute cash to noted, June $XX.X to as acquisition the adjusted attributable $XXX,XXX.Turning primarily Cash XX, equivalents of used our were XXXX. been sheet. unique XXXX, $X.X September I items was decrease previously totaled for the about the fact on activities that million cash and a and The have versus balance the the XX, and situation. EBITDA in would approximately cash related payments which costs of $X.X primarily is the proxy million. in burn cash associated to quarter, the matter acquisition, approximately FIZ M&A related Resolute legal in $XXX,XXX to collectively We presently did burn excess the with million

that I fiscal addition, we bonuses year In executive remind QX. prior everyone for the sales in our and will pay commission overages

a few are there forward, going ahead, know. to like key look we As I would items

work part, that us costs been by our said, in P&L First, expect normal most higher before in the off there related to QX affected will to continue Chairman QX. and should tails than M&A for on through items heavily proxy have, M&A less in be costs former and the from we starting The QX. the impacted Executive it expensed. to costs all QX separation related That should

Second, still factors hampered performance of a by will QX. in be number

some Executive high combine the be cost will quarter have the in burn. When this pay costs from pay over the a bills time. you QX of matter still cash proxy still to M&A being Resolute position, will expensed former with Chairman burn the out and separation of another Although

from net acquisitions that the of to will remind I time by our performance be in we cash all working see will as gets these we The and core flow QX. is offset are on when is improved X acquisitions, that both are and unique performance Resolute of over items and past affecting burn stated Fourth, this will cash positive we and reduce Third, close. everyone they it P&L QX. business cash cash will believe that I have QX flow in other flow contribute

items these However, QX, be effective. business. cash improved, for rate flow and normalized an hit as to run more Once the however, see we continue will

we are past, As unique I've profile the XXXX. the business items currently that profit that a change material, have exited anything to we business the of represents items saw and flow and stated cash we the as fiscal impacting year indeed, in these

acquisitions turn Roy. working are Roy? back we those that will think the on call I Additionally, affect now positively numbers.I'll to

Roy Olivier

in showed existing was quarter Article The Scholar business areas lead expectation, of X strong We expectations to new Galaxy materials year's we as growth which last underperformed improvements our efforts. upsells. is sales and Bill. have in bookings process, over of collective those last versus made Thanks, All a nice in results year. the speaks sales and marketing overperformed churn and improvement new in promising terms and of generation

tightening customers new, performance to a takeaways. we material budgets. the competitive will remain good those areas The did sales to that continued our upsells We've our any to customers we continue some the We of very our QX. a headwinds be news churn spending. seeing additional and QX due help months, continue past change us with performance QX believe our think is are the to not new as strong in operate pipeline our over Very lead are tight be which that results seen see new in continue existing X rates bundles to some in generating is nice pricing downsizing will competitive teams. new we churn and function that or While And that in launch in upsell drive their of generation to are XXX%, about little net also in we strong position. leads concerned

is article for publishers. This the platform, accelerate expanding the in quarter, using releases to We addition allowing ChatGPT did Galaxy We assistant ChatGPT including we Article where product. technology. post-market and the create recommendation capability during process tool, in our our quickly to beta expand platform. our surveillance to reviews offerings review our AI-related released to several our AI-based this customers Turning supported in in the our engine

small AI the one sale have with Resolute We quarter. the during product

we enterprise products for can of a activities, the cross-sell through the on both publishers, advanced and expect most the to are discovery bring Galaxy we product As has of remain we include on Article did which the We platform, products, excited possibilities focus to platform workflows several and that in back AI is tools start this the professional with in when upsells. inside in the about extensive Resolute reminder, will product be forward. track creation remain delivery new move or fiscal document experience on a We dependent revenue, half He new QX, search primarily and which generating value these XXXX. and as QX new sales on will selling enhancements. Resolute

and are proxy to the we goals and the closely largely behind sure and hitting so plan QX matter we are our engagement on are can no year. there executing morale distractions us, the With monitoring make for of employee focused that remainder our

on any close acquisitions, continue one them we additional barring work shortly. X to diligence problems, M&A, expect Regarding we of to

As both objectives EBITDA a and accretive growth reminder, our our are to objectives.

In cross-sell strategy. line both long-term represent opportunity our they strong a up with and addition, product

sales outlook as concerned we XXXX to as be and the for view. affect turn biggest if our behind matter said, overall and churn we will are our XXXX, about the down impacting XXXX, our will our we fiscal our headwinds of on, the activities. the the remain rates, In a fiscal products have next integrate mind, economic us wind put my I challenge effectively Regarding growth proxy which working in and acquired ahead transition marketing acquisitions in our for upsell beginning M&A do for and have am result in That I year future. close, In rate. XXXX, strong in about will efforts ARR have months produce those will I the EBITDA focused much line fiscal they growth from we integrating what when versus we we well. products. respectable the and that in into will they be our our I'm and as successfully business confident cross-sell also about excited on us base nice performance acquired, what will to other[indiscernible] we short, more result bottom roll being last business. resulting selective and

execute on regarding think give much what our it are trying As investors we we will a I clearer plans, build. to picture

great year integrated performance. the to we opportunity be the with our which financial momentum, deal product of a half finish great and our have a think I in of both suite back evident will

over presenting will at We Roth on attend would contact a and it that, X-part on to the in schedule to that operator next be Q&A. New I'd Conference or the like the investors Operator? should advisers.With in for November Southwest XX like Technology week Conference November XX. IDEAS turn York Qualified Dallas to meeting

Operator

[Operator Instruction].

of Baldry Richard Our Roth MKM. first comes question from

Richard Baldry

even side, it's Was there below that normalized I looks a held bit a like things might the any back even your and little onetime the have back bit go OpEx would trends I well When onetime integration. given recent down the from it year-over-year. Resolute's thought it up items spend, out little

Roy Olivier

you that? do touch to Bill, want

William Nurthen

the of knew was tight if put I'll at we and on just a fiscal lot with the of year question costs. to we but for basically understand say budget affected quarter. pretty No, given But to these other we coming correctly, a some on we'll proxy new your also run what have costs spend it and little some budget, tried Rich, as hit tight, them going a few times, get held of as hired the cost a it take the in heads knowing to well. does that time might us we bit we're in and have some things board M&A-related

Richard Baldry

need talk have the Are Can customers is Resolute been into list. you Or APIs, you you a integrate to in it when challenges blocking just technologies to through And what core walk search basic stuff? do of asking for that? their there top meaningful its tackling about to platform? feature

Roy Olivier

I somewhere say complex. probably it's would basic between and

to that of platforms enhance to that the Article platform version want search different the However, that version there. integrated I is to jump first QX, is so And that Article the integration Galaxy. and Galaxy. we QX, continue we'll mean expect then the to first and X late Where we resolute we to released it by what product be early from complete be have in link you into go each then would to other, completely over and ultimately that will do and is

have don't to talking things So you X each other.

VX, capability which one QX. in late have But between cross-sell very early and sometime You experience. quarter gets us is seamless very to this

Richard Baldry

And little maybe, came cash the a bit. last down

understand for to for how time? down when comfortable more an how those the the debt are the quarter. use to You funding with about Talk comes you comfortable cash carrying looking did less cash M&As? in the you equity you're balance just acquisition other look acquisitions, Or position? the of period as at at intermediate least Would backdrop

Roy Olivier

further. not comment I'll

I cash $X cash I of $X what a conversations And our million floor flow number is. will million. think our is about say to had and Bill I

million we're that minimally with want to And this So not X million run of We're thing probably remainder going in the have the $X to to you question. going million in bank. address to the Bill, bank. $X

William Nurthen

little a try some how all the more of announce get, complete likely obviously, thing do we deals these do intend look I of transactions. Weâ€™ll finance some And options. use first basically equity to we some to to we want some cash, but sorts it. to to But Rich, we at there's flavor is continue think of these, to will get our as start these of we for larger

I Roy in look used announce at what we've you past, seller used that. have like notes. If We done the and or things

that while I on business issues. into make don't keep part any at execute plans we time, sure and reserve will also structure, making same be in as to that sure of So run we the can Roy think of mentioned, the amount a the our liquidity

Richard Baldry

Resolute ASP Or that in? more it there Last impact Is meaningfully really than that? coming more of in is we've seen jumped an while. one. than The a to

William Nurthen

yes. Resolute,

Richard Baldry

Congrats good on quarter. a

Operator

[Operator Instructions].

of question Our Maxim Allen Klee next from Group. comes

Allen Klee

added how business, Resolute? us ARR came of you core that a the Could quarter much excluding was give sense in incremental the from the of

Roy Olivier

brought $X.XX in my mentioned of I script, about million Resolute ARR.

XX we incremental had Resolute. million quite I from about $XXX came in not of think quarter the and of that

Allen Klee

to the well, what And then to just first fiscal you think there onetime a that incremental type a way quarter? if to -- in the little spending we're might had of not about mostly related going to the compared think be quarter. next over there's left what mentioned magnitude still things of recurring you Is

Roy Olivier

think those that away stuff the away costs up of this proxy and I much. out that, goes pretty affected we And Chairman much the itemize pretty quarter. goes

a really would related around I of above say, XXX-ish would So normal it's type be legal impact. legal, probably the is to and M&A stuff over

Allen Klee

M&A the what looking in stuff be the looking What you for, of offer to businesses these what to could you terms contributing you're doing? that offer you On new today? be that us of compared remind at, you're type will what they'll

William Nurthen

Well, do unique our have that base. but narrow that to value allows on our we're proposition to looking to comments unique provide not us for have obviously, a yes, we capability today this, user we

markets We where also in. we're in are others highly interested successful not as adjacent complementary as

strong For corporate academic example, we in in government. or not as were strong very

slides where I to used are in deck Galaxy. corporate we XX point were that us. had Article last So maybe be when or days, academic here's we've people then investor or not to And capability a XX that showing interest there we that the point back number if the over in would just government of and of out is you

Q us. for Article does And are there Resolute data X boxes. here's references. Resolute Here's that where what But few deck, were months ago and we even with Galaxy empty a with

we can can the also that opportunity strong acquire about have market us strength in capability both So strong that that ways. fill allow another necessarily we we to strong not we're it has cross-sell a cross-sell acquire way in is there the portfolio that segment that They have of out that also a think is, capability. will that

terms innovation are they meet point today. the targets. as be version not got interesting if are to organic value the deck, targets which filed currently there you just cross-sell and investor that long chain, us requirements, titled an the would there I as to growth EBITDA will So to capability, and updated you got filed boxes other have tomorrow, slide don't M&A got strengths probably as of go if which And X empty to have, they've has our be accretive to in we some to

Operator

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

Roy Olivier

again joining Tech presenting Thanks, today. Conference Dallas everyone, reminder, be Conference as the will the us for York XXth. in we on November XX in the at a New And and IDEAS Roth on Southwest

to to to February, and in out you'd have reach advisers. to great speaking like look you day. attend, X-part a We please If forward

Operator

concludes today's This conference call.

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

Research Solutions (RSSS) 9 Nov 232024 Q1 Earnings call transcript