RSSS - Earnings call 2 2024 | Research Solutions, Inc.

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Operator

Good day, and welcome to the Research Solutions, Inc.

Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the conference over to John Beisler, Investor Relations. Please go ahead.

John Beisler

Thank you, Betsy, and good afternoon, everyone. us earnings the call. joining quarter Solutions for XXXX fiscal you today Research for second Thank

link call included turn is the to to GAAP Roy? a release Roy remind this issued filings reconciliation of company's impact remind a Chief earlier I prepared the like the On and Research is reference for This information may with remarks, Olivier, investors. certain Act company some management I for Solutions' measures factors. the and Executive you Bill or measures to website, SEC Nurthen, you the will today website.I future forward-looking that to now President the Actual would company's company's call non-GAAP issued on this the differ is risks available on and Officer. the the like refer the be financial today today's announcing operating in results Private Roy begin expressed of call, for W. of recorded those researchsolutions.com.Before are Chief We via A measures, provide implied on available Officer; are made statements we results a replay their from of recent useful to press earnings second XXXX. and Reform those the believe of its to afternoon, call quarter condition.Also the closed release would due this variety for which and under afternoon.Finally, discussion market would of Roy release materially Securities W. Financial everyone the that to like will over financial Olivier. After and detailed results made Litigation made Bill XXXX. fiscal a more could

Roy Olivier

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

for walk help quarter's report in a minute will which want to take the do of a results, moving Bill you are lot few through, pieces business. there to milestones this I While a

our million the platform time. Galaxy from references First, ARR for above and $XX revenue first Article core is in

total $XX is the for now ARR Second, our million first over time.

of the the about are unique functionality and and competitive the you positioning Bill into using we research-intensive new the the can most walks after products for results. acquisitions Bill? The future. company and detail second provide workflow XXXX these the well addition from Third, positions products the companies, our in through to of combined Resolute more company the scite and build other X quarter research that across organizations. I'll departments in speak fiscal technology

William Nurthen

Roy, Thank everyone. afternoon, you, and good

from that which contribution Before quarter second I'd scite like of include contribution and everyone a the approximately acquisition X. XX, closed to X full begin, month of I December on ResoluteAI our quarter's July on remind results acquisition, from the

government what academic subscription numbers have For revenue. discuss and institutions automatic annual make BXB fiscal separated numbers.Another and of month and for recurring is subscribers calculating into or X either BXC scite subscription material students or recurring deeper summary of understand those everyone BXB are subscription scite's the we what recognition perspective, of the on scite out annual and going This we operational who a revenue corporations, services revenue, BXC from subscribe agreements the that to ARR, we year-to-date in entities. like to before the the there numbers, are into I ResoluteAI would approximately item is annual brings purposes ARR. months acquisition how factored tables, payment that, monthly help an a of our perspective.For ARR and call ARR wanted I ARR both basis. X typically we website a professionals classify from of or it revenue from subscriptions with financial consists and to accounting as through are amount individual with research

Research scite those and annual, purposes across individual of ARR.BXC product ARR some We with most of entities contracts those month-to-month. but the for product calculating Solutions, consists which is platforms have BXB lines of the ResoluteAI are aggregated which subscriptions, and across are of everything

other and For ARR, for of see all and revenue we purposes by further define XX. resulting for of BXC how start million, from our monthly an regarding Total profit platforms XXXX. second portfolio products it calculating through revenue information the line non-GAAP by taking multiplying for press subscription and XXXX monthly annual the the XX% I'll loss revenue quarter revenue BXB of we use of and in that, the release their fiscal $XX.X the purposes numbers. from recurring the some fiscal increase quarter aggregate Please of BXC subscriptions going second amount recognition, and is our was through terms.Lastly, today's statements.With of flowing software the

primarily with recurring ARR, million. was of good product months over scite some scite in subscription Galaxy Article in the Article it quarter well now you when organic next consider outcome being quarters. before churn the $XX.X increased was Article million. Platform acquisitions X in $X.X million by contributed basis, that also at the to which a their ARR do is offset Article as revenue, a On the churn incremental Our of net up as result we million. $X.X scite, and October the platform. X XX% expect and driven the best stabilizes. in The that growth of a million year-over-year. annual growth announced our time had end We the the quarter last almost $X.X in core some revenue $XX Galaxy ResoluteAI was ARR with strong roughly stand-alone over of for was acquisition, ARR in of The Galaxy year-over-year the quarter as continued ended by growth We XX% Galaxy ResoluteAI.

academic over volumes contracts segment transaction business, we part that and year acquired was the the in the a at acquisition are transaction increases still transferred count to X, FIZ of of of X customer feel slow higher where now that second total and XXXX the was transactions. primarily past transaction.Our will have value X,XXX, the we same This organic XXX fiscal FIZ tremendous a X% to quarters the due in point for to $X.X will quarter in almost net as the increased that However, active The our Transaction the Karlsruhe related rate I of quarter was there ago. revenue note in starting by increase which anniversary QX. will seen enhanced million, from growth, January growth period the is XXXX. notably from the we itself our effective are a technology

in was gross Article businesses, platforms Galaxy of well and Resolute's XXX are to decrease aided higher-margin increase the for the growth a better However, expect higher increase modest is volume. increases our copyright due gross The the The in reserves mix products Platform towards XX.X%. prior to of still which Transaction to the we revenue organic due of to cost The XX% XXX shift year fixed the in over XX.X%, by We business to lower basis due coverage second do order this quarter margin a as primarily to compared point foreseeable also some margins, the similar some Article quarter, quarter. increase. in XX.X%, margin remained consistent of was our ongoing increased the second a Gross to generate revenues, XXXX. recent that transaction with Gross improvement scite's increased future.Gross the margin. margins. line did which recorded margin platform the on copyright basis lower for quarter to points margin decrease as The inclusion the on related of history, margin Galaxy. contributed business is

scite. would more variance basis operating XX% XX% Resolute I to the number $X.X A and of fall $XXX,XXX to expenses in So from cost the million of little year-over-year were year back quarter comes forward.Total somewhere million this the the in normalized compared the of $X.X a basis expect over quarter. on to and prior addition between going

roughly in breakeven per the the compared loss net share $X.XX loss of basis a this costs or with well $XXX,XXX results quarter. of activities a was addition, included quarter.Net $XX,XXX share scite, roughly acquisition per quarter's In in associated to year as quarter $XXX,XXX as M&A on other in or prior the for the

versus Cash was in we sheet. reduce aforementioned primarily income XX, been approximately have more XX, and $XXX,XXX was $X.X acquisitions, of to in EBITDA the our XXXX, the $XXX,XXX a Resolute, statement.Adjusted of million attributable a decrease quarter, for includes It was earn-out a balance liability, category did the and adjusted for result EBITDA important as million. and The to acquisition-related churn as operations would some the used normalized on in contingent note some $XX.X quarter of cash is June expenses generated to was in $XXX,XXX year-ago quarter. million compared of portion of which income the our to the their $XXX,XXX the the Resolute scite $XX that Given below-the-line December basis.Turning cash which on equivalents result, the other XXXX.

to flow proxy resolved, operations We M&A in have to in also from since incur Despite our M&A the able as related in to the had quarter. which expenses were related activities QX, as issues, activities. been related the to QX outlays $XXX,XXX cash to well heavy continuing in costs we generate

flow improve as we of cash these into a the and business. our on to number acquisitions more our move expect one-time integrate fully We from expenditures

QX expense in give business. perspective, profitability experienced have in opportunity we to we the the cash ahead, demonstrate an from of will look which QX Additionally, cleaner part some much good early be the will an of us growth QX.As and

We $X.X QX expenses loss much additional us, are that, to but costs further we matter more normalized From cash not In results and to in produce in the year-to-date improve EBITDA time flow adjusted Those and first improve but to aiming perspective, as some expenses. total in proxy we the as behind and perspective, the targeting a recall we acquisitions. $XXX,XXX.In QX, M&A-related we see the QX, a had one, result the most EBIT should roughly had incur over month about From and integrate million proxy will adjusted year-to-date well. costs an are are that. of we $XXX,XXX M&A-related that QX, included expenses. in cash of collectively after of costs $XXX,XXX in still were a year-to-date M&A-related related $XXX,XXX have

today. the This some in said, have of about that will the behind will lag matters the good However, pieces months. very and stands I revenues.I'll acquisitions, where execute our Roy. likely the revenue position, profit business and paying we the working that were now items acquisition next that one-time-type X for with paying All and adjusted severances and our strategy Roy? off from grow back it profitability platform some Despite the should EBITDA come ongoing be expensed. I to noted realize associated potential call the flow able is deferred which think the related business of previously to higher-margin previously feel some that mix and like down in off were this cash our discussed Roy to proxy cash the were now affected to shift QX, we on to feel turn place some

Roy Olivier

the we going going Bill. acquisitions call, today's with forward. like what and with products issues I'm on to on doing plan to but address Thanks, several start I'd acquired

tech at content. tool It the the understand cited discovery medical also interface. badge reminder, articles most has a technical citation published and a by capability is they It has scite search user often article search scientific, has researcher how or tool includes a great a an focused been looking As full papers. and helps advanced other a are on that for

AI times The model. number of learning this the In Rotten corporate It corporate been or scite's Tomatoes successful showing statements the and in score FICO the the a million have segments at. largely $X very unique Think score of about differences. on version with ARR is been academic search that quarter. researchers a and and shows badge.Resolute article a BXB how advanced citation mentioning to it with been has product is used in for the academic has BXC worldwide. article specific has and scite's corporate based ARR end tool, of their their associated some $XXX,XXX but capabilities, and user looking and cited, addition that of as successful, is supporting, on academic about full tech similar by many based article discovery contrasting the the as the unique assistant

also -- Resolute addition have over products databases In research scientific, technical medical sorry, XX to external available and connected. content, products, searching research I'm

and technical scientific, the show they medical results content, are search plus on. databases So external if return turned whatever the

trial a view advanced information not medical the databases, capacity Think technical patent data, scientific, more. Some STM FDA searching capability. of providing articles. just of enterprise of financial information, search platform and is for of as clinical this search, customers' Think and those or Resolute's include of databases provides the The databases. version this internal XXX-degree

scientific and specific problems that customer. include product, videos specific specific the workflows leaders, surveillance to Resolute other flexible box programmed a black tasks a very do build and notebooks, key solutions. examples was post-market Some opinion, very the advanced identifying data. capable technology not for Resolute but be In opinion did solve like built my to capabilities and had other to with

front-end we what where we our on. was will that largely specific these will workflow a they address on such, basis.Moving build user solutions tools we search on and are together forward, be bring Enterprise one and external scite case-by-case search problems working a plus and As strategy and executing Resolute then call scite scite the will are that for search capability. customers interface Resolute's enterprise Resolute's built search scite the the be will scientific, tool, will layer databases. enterprise Pro plus medical and and or interface scite our and adding with will technical STM user our be external external be databases scite

data build leader, more. modules, use we solutions, key We organizations. other tools these landscape, are patent and intelligence new a to trial needs build technology The initial that service then clinical the competitive departments will research-intensive opinion in solutions, identification, solutions of solutions

also releasing to an patent enhanced key modules will post-market and surveillance are our long-term module. the growth We be objectives. These

our our The will remaining fiscal quarter tech and that late a is the XXXX.So this which release expands first will to answer in launch addressable the of the also and forward. the couple only that of Not value it do this of additional to of we QX market? exponentially. life these sciences ago, Resolute add a the X shows chain. to or does solutions IR simple. capacity X with that areas us modules scite year offered value what of serviceable be of will The first It The XX addressable we addressed current the total areas allows fiscal already it years landscape part module, in trials we one this launch value organically service serve, market does XXXX. half The fiscal going chain innovation Previous to built serviced acquisitions, chain. total clinical coming deck areas

technical can we been scientific, years. million this provide October XXXX, outside B-H-A-G BHAG, in solutions $XX CEO of time, first the also ARR and For I to areas life of medical In content ago, formal a in and for years years. X sciences.Two-plus set of X have will I

XX/XX. million $XX.X at ARR as are of We in

of of we said, I'm our likely near BHAG So top that not with portfolio confident the happy has or XXXX, valuations we but through ARR almost be market. where been the I'm this to were did up $XX close we still short. by and hit product we'll acquisitions. acquire million in that to no can fiscal by believe the We be $XX further end are million aggressively double someone now. when have October, organic all number bit growth at today a That adjusted

margin EBITDA be want and the guidance, I expand not as this In should margins reiterate approach goal, double overall digits. at this would BHAG. expect we the in is to point is we this our addition, that to

evaluate that strategy. and is and that objectives our Now, our will return shareholder to not to addition companies continue we align to say product this business not in with acquire

innovation decided that focus continue research to the further. as value on throughout what referred and chain.Regarding pursue workflow we the recently to expect We #X, acquisition to not I have providing solutions to opportunity

our While we some threshold. the the meet are technology, diligence in excited items about did not

We opportunities acquisitions continue about have will to other We to continue we moving do disciplined be that forward. investigate. will

with financial quarters next various not getting the or focus have deal. integration of to new products on X and over we However, churn, was we selective we more in which the strategy expected some when expectations the of have X us experienced to line returns will our underway.Early allow customer been our as Resolute be the signed on

a strong developed pipeline new have We for prospects.

should of sales it offer. longest However, noted the products products have cycle these we that be any

On the the earlier. described been new other to will the those customers. that can solutions find core confident have encouraged in as hand, to that we was, And our is as technology and strong utilize technology we believed that we it more relevant remain be solutions we that

product half X the our year.Conversely, to that has senior sales overperformed selling in early second has in have scite BXB. form see executives new the the results added of We some shown BXC and fiscal of and to days expect sales expectations of on -- the

Operator? have space. us We're cross-sell in to BXB our say that management industry-leading solutions delivery it could report forward. and are a that, $XXX,XXX integrate our integration to document excited scite Our calls.With past over that now demos to the from that will robust trained very Solutions prospects like our about corporate provider platform.In customer $XX,XXX progress future, what capability Q&A. team have going the believes can we Resolute's future I'd back into weeks, excited we turn compete blocks capabilities that Research through In in a that delivery new best-in-class and sales operator we as base we closing, scite's belief teams. and to anyone we've and the ARR our with was the with our the was academic extensive tie continue external for our to company now. business, pipeline teams a existing closed we'll in with enterprise very our I'll transform software place and now document data entire about few We're just a building on that and doing Those allow

Operator

Allen question first with The from Maxim Instructions] comes Group. [Operator Klee today

Allen Klee

quarter. -- been the what you do then also Could performing was talk said What's you you on Congrats quarter. your Article Galaxy that guide that you has about so think well? think why And turned around? best

Roy Olivier

of terms helped prospects One public I being has acquiring scite comfortable with of BXB think, Yes. Alan, more say things. would a larger I part organization feel really couple its of is, in scite, platform. that a

sales have We some employees. offer few I not that think some technical would small because So support. helped close now with even independent a scite sales a company maybe accelerate that's or XX/X was closed

whole We help have onboard a onboarding to customers. team

support have and sales We larger organization.

So I a of at think predictable of business.The rate. rate. trials BXB certain those BXC that's investment trials return a of In typically convert results actually really marketing, the we invest some in velocity conversion helped other very words, if increase digital it very and in a amount business the has predictable

and So Resolute. an marketing in Article on results digital whereas, see we we or sales XX-, average cycle been a or about have and XX-week you know, sales Galaxy longer as side, XX-week the those cycle up weeks, ratcheting have for least we a BXC literally spend for typically days at

So marketing.Bill, to to basically the we're quickly add comments? able in move that want investing more to very by you anything scite needle

William Nurthen

I that's good, think No, Roy.

Roy Olivier

Yes.

pace. the I've it which nice that we're we've were We've larger me as new success they largest good deal since but been with with up we're sales large be. number like to was of I quarter. average new comments, customer closed revenue we the is there not weren't And think because job. where to a teams the the encouraging period a AG lot closed the was as logos, pretty in of company per a -- we'd the deals. closing during On new the there high a seeing deals, seeing that closed They're actually We doing pick

starting that new team. a amount think perform think, is of I into So well. to is of Part I marketing news new leads driving, new that nice

products.Bill, I references is it on to Article to that? new Galaxy team to Resolute applying new what's taking want anything and think Galaxy. add forward our scite challenge the working going upsells and you and Article

William Nurthen

Yes.

the X of in coming would I quarters our quarters, have but think recall kind X quarter just it was been down the last best last I say steadily.

before up for So point, us, rebound was that a of acceptable some saw hitting with it seen quarter, a talking but a we've to this this process very new nice rates Not rate and not was -- us bounce To we product well. you about we economy the has quite Roy's nice bounced back. with of been the sort sales the started there. to new performing issues the is

So strong. through are coming new sales

I going we a still think We this the struggling Last as side things. upsell where year. have launched into year References, upsells. big expansion of bit, which least catalyst much fiscal at a for is was the year, we're on catalyst to don't

in and behind a the bit little a nice for the QX, will that's was hoping fiscal rest that to on -- year. that's running it sales see trend So there, going continue but the we're to platform turnaround of

Allen Klee

on also some you while ARR it's scite, and that Then have the business mentioned of under you BXC that monthly is subscription. the mostly annual most with customers,

have a So that? of customers that? confident say How churn annual have those data to of can monthly be do will customers? sense enough a you Do have sense of we you the

Roy Olivier

Do Bill? to you take want that,

William Nurthen

we really a we isolate of separate it to over of in say, And this on don't changes sort time. out of investors line that would the part the view I reason separate to and definitely enough data that's wanted have yet. give Yes.

tends We to we obviously We BXC I in the are rates continue it see churn business of recognize it. rates. have kind going that higher at to monitor do look that that say and churn to higher from will diligence. did also

in that hard to more I what on the at churn we're already is, However, segment. do work and that things make say to basically reduce sticky rates product would

we're that in think, there's can also a things we there's churn but reduce help reduce packaging perspective, segment. to do from to that some churn, we and So using software pricing

next a with think few I so, we we'll little learn that over in more And the to be more discuss investors. as quarters, detail able

Roy Olivier

time scite BXC $X want from is it's we remind we said, just ARR in to rate owned Yes. that went be. million that it the for higher net million. $X.X churn it growth And would short to net than That I everybody

continues it growth of cut can strong even So in churn more. going profile that It's spite to terms same the on of page to are we really show churn, I just all, down. we the in its growth if think, accelerate a

Allen Klee

ARR. is you My -- now. last moving there on have more Is incremental question pieces

So I an each you what was curious, do have for for quarter? shoot you internal target

Roy Olivier

Well, definitely not, we very scite. categories. various of in but scite all our detailed Research Solutions, had what budgets have expected applied sales we did to of kind of planning

strong to overperforming doing Solutions little So us. new really growth us. nice new because Research years. we to of not do Resolute's put together. softness relatively BXB a plan we have new scite's we on on of growing the both I targets more for some like is wanted specific then line BXC player great upsells I churn for Resolute, new. been now we to continue have don't on continue you're them are. to job top than targets the on see. line, BXB. We've said, specific for job.And We other rate think we kind animal the And where scite doing that are very BXC a bit on see a BXC has is would think on that But did be is experienced and That people a they than a EBITDA and for lines a

Operator

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

Roy Olivier

our us joining everyone, today. for Yes. call on Thanks,

to in quarter results, We with representative.We third California March to participating ROTH their or to day. XX. sales have Dana will forward great that May Qualified a investors should the you be XX in contact on attend and and like Conference look our schedule would a speaking ROTH Point, in discuss meeting

Operator

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

may You now disconnect.

Research Solutions (RSSS) 8 Feb 242024 Q2 Earnings call transcript