RSSS - Earnings call transcript Q1 2025 | Research Solutions, Inc.

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Operator

Good afternoon, everyone. Welcome to the Research Solutions, Inc.

First Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions] Also, today's call is being recorded.

Now at this time, I'll turn things over to Mr. Relations. Investor Hooser, Steven sir. ahead, go Please

Steven Hooser

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

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

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

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

Roy Olivier

Thank you, Steven.

increase and from net and even outpaced EBITDA line growth a our in financial million expenses in as Our basis and first $X.X scalability in Platform our adjusted adjusted increase of model total XX% million Deployments a quarter rebound factoring onetime BXB pleased quarter, $X.X seeing and increase in $X million, year-over-year flow, with from flow a EBITDA income on the million improvement adjusted in some in quarter. and contributing top range, our prior in EBITDA when almost TTM the we reflect the generated ARR results our the in XX% historical an in outstanding in million contributing revenue XX% in particularly to a below quarter $XXX,XXX growth report $XX.X a for resulting EBITDA revenues cash flows on but cash of $X.X period. were the in operations and the second in year. are basis cash same BXC I'm

average when of ARR quarter first deployments are including due and Our and the vacation season revenue lower European were traditional the factors, impact lower of period. universities summer during growth the months incremental than subscription out to BXC several

up ARR churn. I'll financial finalized. noncontrollable churn like But allow to performance. saw I'll to for customers quarter and decisions their up QX. primarily to logo XXXX. targets, productivity fiscal and the materially hope results subscriptions over conclusion taking be we're by My with we picked companies walk extending our fiscal our a the have is As to to outlook Platform comments the that due to to fall, for a BXC approaching our our cycle enter business. closing the Bill? then note, and was new some of was budgetary clarity we sales XXXX We subscription of lower quarterly $X I'd team. Bill approach customers periods and the sales and their through currently diligence will are continue million. near pass hit for affected we where at provides by longer review higher-than-normal increasing to and That some this election lost Net surface, reviews. that customers competitors the churn BXC fewer Under and half make deployments team the acquisitions term from in but our higher-than-expected their over upsell offset it improve by is positive our driven steps budgets as customers window of wrap of some in first the for detail, first, On it be

William Nurthen

everyone. and Thank you, good Roy, afternoon,

to year-over-year regarding of Before I make reminders start, I would like couple comparisons. a

First, on we months from XXXX, XXXX. had X of prior approximately closed Resolute AI, fiscal July for year activity our XX, which

same on first was the in the quarter XX% transaction XXXX of was as XXXX. closed there $XX from no that that fiscal million, impact a quarter from fiscal of Total X, quarter, for increase Second, December revenue Scite XXXX. first

revenue Our the growth acquisition XX% net of upsells of driven was to from Platform year. by million. Platform a and The deployments primarily subscription last Scite and increased increase $X.X

On $XX,XXX. was $XXX,XXX in ARR ARR that BXB basis, compared ARR growth we revenue year approximately with quarter mentioned at quarter accounted in in this in roughly lower and and the total quarter. our was the our occur for growth Scite's from ARR forma about on is year-over-year prior the BXC with quarter that ARR, XX% assuming the for associated million for of quarter Recurring Scite approximately growth had pro look XX% modest was you to of that BXC We expected If to seasonality, pro this up which Platform BXC full XX%. $XX.X forma about the subscribers. and year-over-year of a $X.X ARR BXB growth growing ARR roughly year, Revenue, of to in growing perspective, and comprised prior Sequential a Resolute with the growth XX%. was primarily quarter million the we call business. rate $XX.X some or related revenue ended Annual our XX% million We roughly roughly last Platform

recurring non-GAAP items. for year QX. in to define reverse use see ARR press semester, Transaction have from for annual report quarter. and start the we the increase seasonality we BXC other for revenue strong a million, off $X.X from release quarter today's was that Please that As are to a the and Roy first revenue mentioned, how and entered we BXC fall prior am a I seen X.X% happy as growth perspective, academic we

total customer the X,XXX first X,XXX for and the Our once for quarter shift XX.X%, contributed Platforms QX, company gross in of blended XXXX for count margin. the In almost XXX increase gross mix margin basis ongoing quarter compared business again, two quarter business. revenue due period to thirds to a third Gross a same improvement year the the was active the higher-margin new the Platforms record is ago. a over point towards of profit. The was

expense expenses basis revenues result the operating is attributable XX.X%. XX XX.X% primarily to the our to push The continues, shift expect million, increase point year's we in year increase and being Similar say recorded the Last are margin quarter. increase this Resolute. we very however, business personnel to have impact When near-term. and we Transaction XXX activity million in able basically slightly XX%. Gross high is lower also fall and Platform, if initiatives. result, in blended future were compared it quarter quarter primarily into things, you and our quarter, we quarter. sooner. and year base. Platform above first to slightly strong in the a this and in proxy-related Scite copyright above to the considered; X months will was prior only some gross related very Total approximately The of costs. see have $X.X expenses, business happen basis to a I offset to which may see we reality steps for may any All mix these from expect to of will in growth next lower year-over-year starting pricing increased gross we margin not some quarters, to translates in flat above quarters. costs but acquisition points prior months, expect it this the modest experience $X.X reduce taken margin still increased results was did things included remain the XX this hosting but results to to future XXX of back not relatively in two our As from XX%, XX.X%, the SG&A

continues on prior move important quarter. expect to flows for have compared our we in we quarter EBITDA, with the blended favor share and we EBITDA to margin quarter. line bottom just margin negative cash X.X% of an the Adjusted income business. of that year for improve and XX.X% a the a was to mix fall $XXX,XXX note to business the was result and that or It the Platforms ago Net continues basis, as adjusted of to per $XXX,XXX to $X.X $X.XX million, XX-month to per the EBITDA, generate respect and margin, quarter. in quarter is $XXX,XXX trailing compared shift a in share improve, gross generated revenue are the year diluted our to loss Our million $X we negative under second seeing that adjusted $X.XX now net complete for or

balance flow to months, cash cash We from have million of XX, X.Xx, by million our XX, over On versus factor compared a that in generated from a flow we XX over approximately $X.X important June burn of in $XXX,XXX is XXXX, Turning cash on operations. we quarter. quality Cash strong as $X.X prior the was earnings. the a to and a trailing is our the operations generated now indicator of believe is XXXX. sheet. our flow Also $XXX,XXX good basis, in of our year $X.X outpacing to equivalents cash million positive September cash of note adjusted EBITDA XX-month last which

line outstanding or we As liabilities. and our long-term borrowings debt were of under there quarter end, revolving of credit, have no no

will the given seasonality there affecting as hiring from business I delays Transactions ahead, expense that we of the increase however, impact had strong should in holidays. be some is in see headcount some newly we the quarter look QX some the in QX we will in QX for I As And also SG&A think note, budgeted another quarter. earnings. negatively

see we result, QX, result is QX being QX. again an adjusted from in like quarters a step of SaaS cash likely back mix reached up year-over-year our in while an bit inflection profitability and well EBITDA as down our which a This will flow. are revenue for an increase sequentially that point shift Transactions seasonally As overall business. as feel the have strongest Overall, we we and will

and to as record business profitability model, year positioning are the of advantage take of look profit such of another the to with better QX our this Roy. demonstrating going back we opportunities call M&A forward addition In earnings. forward. Overall, increasing turn the for I'll and cash flow pleased strategic is result posting potential to to us now Roy?

Roy Olivier

Bill. Thanks,

record of anniversary X-year our acquisition of it Scite, Revenue with its growth Cohen the continue of us recently with language, proven around growth. sales improving building Officer. comes Sefton high-performance a create We approach standardized generating we we the and the a upsell opportunities platform. sales help Chief professional presents and as track As and a process pleased sales hired common strategic will significant organization. as be He to framework teams our within new Sefton ARR a accountability

through starting go new we help will We're and to we're in roll join January ability team training process. entire Sefton forward. execute out moving have the very us excited as confident us, in his to Our

M&A. to Turning

in ability recent profitability due get down deal and cash to closed primarily stronger valuation the opportunities started expectations our demonstrating as seen opportunities, to sheet, have We inbound valuations as including an we've of increase multiple flow. thanks our have realistic increase Resolute come to in more evaluated. recently flow to and is and executions our and This Scite well deals see Transaction increased balance

M&A we We where at or to highly fits into remains right can cross-selling organic strategy focused either valuation opportunities high. continue the to our in organic that evaluate opportunities unlock and our looking on create remain higher product have and plan businesses Confidence growth. something

was initiated Nkarta few quarter. suggested Article Turning is due Vaxcyte, and used by that a The was Nkarta Plus looked Galaxy back the true It competitive those due to Article look which and Scite win Pro past at Solutions. Therapeutics, include an who trial positive to the BXB A with sales. solutions. user in the past AG successes competition some takeaway of We ended They Galaxy which at nice also to Article our did that a have a up is this Galaxy Pro user trust period us deployment, past an previous our experience. and had past Research companies. during was choosing deployment. experience

capability pipelines that will California sales have behind of both currently unique of a Article opportunity the Today, index the financial that access to of Scite unique content Galaxy Galaxy, SaaS-based as to a it near as steroids focuses focus access and all including our Scholar sourced We we remain book. feel core help confident on be content system, despite most of to content when limited to University materials. can XX in the the source further of do has to natural and content I only rights competition solutions libraries. the those within assistant large search include longer the of outside of we positioned future. and deal We've have our applications that of and offers newly hallucinations SaaS found on do an and in based the the sales company's summary, of Print results search AI to From results. is means on cover assistant economy AI history as powerful with is to and that also seen continue OA in Scite terms significant in STM process, References. full article research The the paywalls. strengthen the for that AI closed Scite, enhancing academic family Galaxy publisher-independent product to world's improves. are on unique compared announced electronic in believe one and paywalls. there perspective, access citation our or print only a in a and company the by Article claim the only product researchers language printed capacity with our we areas. Most well or or one our in a questions tech the offerings developing are cycles experiencing, get behind peer-reviewed to not In bad a free or this our is is in companies Article products position strongest

is addition, our management product set like overall customer and and continues us to I helped reference feature the competitive appeal helping earlier. Nkarta, which with mentioned takeaways capability, In which develop to its our core segment AI

on capability focus will our work and by to We products. in expanding continue on AI continuing Scite integrating AG to

search We have on publishers agreements, new which articles. us Scite several near to those allow indexing the signed provide to full-text

on focus publishers to will the platform. Scite adding We continue additional to

back rights rights small we're customers they amendment to in publishers long new can In articles delivering text achieve help one that, offer and We an TDM they've addition, already the I'd a we started their offering of or to in tail customers TDM purchase the for operator. the to long our large publishers rights purchase addition With objectives the which mining data that position great like AI believe our in of purchased to when with rights turn to tail offering. by call over and medium Operator? articles.

Operator

Capital. Richard We'll to ROTH Baldry Instructions] go of [Operator first

Richard Baldry

in that Spending cost go the and fell, Platform ever we seen side actually quarter, haven't the... it look into I really the like down. When looked

curious, prior like was And of costs? there how Sort does forward? fall? is reversal that that some of Or sustainable a

Roy Olivier

Will?

William Nurthen

especially down, Yes, our of some was to which sure. contributing of that we it. some rework business. that bring running And things There things the we high, hosting couple been other cost to in in One Yes. of removed Resolute hosting did some is is area. labor kind basically to costs that a have the

basis reductions little think We tick a see a this from of an also where headcount run add some to of time up. it some So some little what cost hosting but back sort up bit. we've there back might need bit from that we didn't drive our seen before, you a of I experimental do are permanent to there just things We lot in. there's have to time And quarter. could

had margin think does just hosting said it was could XX.X% down. back unusually the was keep my where that's easily, sort I this I were it be why the And that quarter will you than So this way we of quarter. an we to costs light still where in above result that. remarks, XX% a it see but fall able of lower unique just

Richard Baldry

unusual The be? we the I think decent and look look levels up How amount. steady-state marketing but went sequentially, like level sales of a was do down G&A Or something below of kind sort about into decent and what the those of a basis? indicative quarter R&D OpEx fairly you a side. think flipped, should there Is on amount you'd first sort of where of there? sort is came

William Nurthen

Yes.

sales move in some quarter, up to little first you'll we did a into product marketing In speak, side. for on development. marketing the months, bit side, those think the on little step only some and bit and tech in beyond thing we we QX so see probably spend into summer back and as a and of BXC cut and less, the got advertising sales I maybe the

fall sort subscribers. we into Roy did so gaining side And that as we other things, here and CRO. So of on the ramping we of up the on as mentioned, a are hire are ground head new then

So as I of which will some headcount in modest Product that business some as drive think well. some increase the you'll be development, will see that. additional well,

little where in from the caveats probably overall, last you at look So right I that, more that's look of kind if it's just going it's probably some than but total year, I bit with a could SG&A, It like buckets there. higher think to in the now. QX targeting mentioned of be

Richard Baldry

that you'd across to business that done there where the it get-go? have of to directionally around coming in, a inbound inquiries you, they're is some that's comment and fit from decent pretty the Or why valuations you where Is I And makes customer that cross-sell? much think was are about way Or have opportunities would around board? hat sort M&A sort a people so of the complementary of Do you expectations you of with, or the can that you. that's Then talk more fit commentary people properly? bases? find coming overlapping still to sense think these things with familiar you've sort

Roy Olivier

Roy. couple made a is comments. of This Yes. I

inbound does I recognized companies somebody with been deals do we've as of space. is in this think who the part just

the as who related the Scite, reach start-ups. founder, to a it is in of very that. especially Part us out people to high among Josh, result So profile of industry, of also is

saw a a question, of To want folks specifically path. and what what he so enhance lot is And did your that primarily for to strategy. other things our product explore we're similar looking

few cross-selling just to makes of are actionable. majority out not coming think but there's a today, we the where to creation we personas acquire? of what like our So left sense, strong certainly user acquisition sell vast about very to because us people at It that very it today, criteria. should steps and be look partner, have from workflow valuation of view that of we the to base. those where acquisitions, of a for research creation value think when And to utilize, to strategic We'd going has has expense has through a the I advantage. cross-sell come It are it these from of various has providing we that at that me, from the that we many give is what a fit base steps competitor opportunity that a into lot providing little takeout, reduction, to other clear lens that we direct are the look workflow point a of into is should value something

So minute ago. what it's mentioned I primarily a

Operator

Jacob Stephan We Lake of go next to Street. now

Jacob Stephan

the kind I'm are Roy, despite deployments new in comments you was lower what the there quarter. targets? of just driver the hitting about the team logo noted curious some their

Roy Olivier

tens $XX,XXX December, much half the our academic lot as about us was. in about first fiscal is quarter $XXX,XXX, things did the mentioned the materially product, than was we of January a of the expected about pursuing Scholar And them historically said, time of strong had of and that we well about made after their a more of expected. quarter, academic acquired and the quarter ARR In we frame, is actually in than idea was our upsell That of deployment to the time were growth. QX, be one of more which and Scite, of the is growth that on fiscal view of you QX the was call a some I of that team that that growth, product It is by we budgeted was give the made our Article in product. decisions frame, we academic off second Yes. July and and which growth enhance for previous QX, lot academic. our that of back was a acquired June, in we around during segments new space, $XXX,XXX, $XXX,XXX negatively to than so aggressively from continuing numbers, affected academic numbers did we around because Scite as academic are have $XXX,XXX. In thousands. to number That underperformance Galaxy decisions lower the base point X $XXX,XXX we're QX when other our than less churn

that. So there's things hitting various

is general that just and seen we've of last some seasonality, in market Some a of sales it some in of execution it is the quarters. few it the slowness is

Jacob Stephan

you'd the just comments Got with expect? made you here Okay. seeing it. about rebounding above that of Would the the say contrast baseline or back that kind And at demand of QX. to that's That rebounding maybe in is or the you're kind of quite sense. demand baseline you not what kind makes

Roy Olivier

Yes.

think or in I ARR $XX,XXX QX. side, somewhere growth we did $XX,XXX BXC in like the On

since combination time that mean, process. our we think indicators back perspective. see that have me report, think execution do in and good we've some ultimately that's the and from halfway conversations, sale. a activity to the run I the generated BXC as by longer We pipelines $XXX,XXX we've new no less the Early some churn I mentioned I'm a And we're we VP, I means He's first to December I improving plus thing who job now, million plus how as of toward nice I to we're students in churn. $X we number are joined which that in think of that to quarter BXC on a a us, I've school, CRO side. because wouldn't comment, pretty and hope flatline bit year excited $X X all but indicators through bounce been of in nice do which quarter. We've we'll made as growth the new leading think we're some those there, the see ARR side doing us we'll BXB this we're us a for a get we'll pipelines, have approaching to the a And the I so slowness on and driving being into nice job pipeline million, I me, around a here, seeing other a just we execute. little is pipelines. filling a record got need also a better the for some for give very managing result changes to end marketing nice is than made ago. I see really quarter. are got of

Jacob Stephan

one. last one just maybe And Great.

priorities at coming of Chief look or kind us they new give role. their as top maybe the Revenue X Officer in, With X

Roy Olivier

really with walked in XX-day His month He a to learn. plan. just is first Yes.

time how he's So lot a we we with a lot spending people of do. do, learning our of what

whether address have mentioned As successful executives in a CSMs, we'll turnaround kind just pretty sales, a addresses has does has increasing joined. nice of of not coming And process an that company or is it's standardized job that in, anything the sales done good the companies He whether whether the will accelerate track and sales, it's very growth structured record a trying we company, dramatically sales. I existing just new get a a growth ARR into call, it's the January, training and in team as job. in the fairly he's it a touches his that to

think do what he execution well, sales pretty think about we better. do we I it something do excited I'm is think can we So because can but here I

Operator

[Operator Instructions]. Derek We'll Group. Maxim go Greenberg to of next now

Derek Greenberg

I touch margins, wanted there. the cadence to the EBITDA, on adjusted

of then in there'd sequential second from was but a should if performance quarter, see we decline wondering You the the in noted bit you and that strong third fourth little be improvement just I to a third an improvement you saw upon still may ramp it quarter this what think under even or quarter bit we costs. little be think if be will a first quarter due the quarter. in

Roy Olivier

do touch that want one? Will, you to

William Nurthen

that early, Yes, quarter been think over have we of goal improvement an QX. first year, to but best traditionally, I the is our Typically, sure. a kind the quarter if nice quarter. fourth No, quarters have and of our be bit a back, you third have just look our will and so it's

Year. definitely bit costs for outperform You And because QX we've down about here in then of a some our just I might usually, take QX. seasonality. a of talked But additional to in be would New goal bringing the in we step are some QX, in done little the like what of

Okay.

Derek Greenberg

seeing to That's I on to had think processes on Great. kind what closer review updates sales quarter. then there around were I touch of kind and sales, were similar to XX. some we wondering, had was historically whereas over you of last BXB helpful. there And longer levels cited about day I was metric last expanded wanted been saw it sale of call we're a by any days the factors. other extended being the to that XXX, wondering the still if on to or if you had talking I is just how

Roy Olivier

before did Acquisition quarters. the call. statistic a better X I you our at our than question. the But that's tell look CAC, sales can running was previous days which Customer is Yes, in month to I actually good it it's not our Cost, X

expenses reduced lead the believe little it's is to bit, that which have up I'd involved to So would sale. lower. a look a because me bit little days not to have shortened we But time

think but but about don't a when earnings last bit it little it's I our was call, I still different, think it where may changed. we materially be had it's

Derek Greenberg

Okay. how Got Resolute I that's think you had cost And in that on just said tracking. last question reductions you some is recently, my it. And more were segment. potentially then planning AI,

the what wondering just was looks I like there. So outlook

Roy Olivier

in into Yes. I Resolute concern. a the think as be but and in ultimately few Platform Resolute the Article a it's one them sales Scite, Platform. X databases Scite see a last I value are of to has We bulk the adding stand-alone either from Resolute in products. mean continues Galaxy sales still combined coming AG, of the or had our a months,

Resolute , would and it that we getting that in in be have we But Scite lot those said, a growth done underperforming certainly products, Article activity terms new successful. in have sales. more pivoted integration to to order Galaxy So where of of drive our which to thought much been and is

Operator

We of Cast to go now Advisors. Fisher Avi next Long

Avram Fisher

profile a way? you academic different about of is the is corporate a and at customer. talk mean between things. sort in the One wonder difference X either margin could if all there I difference I

Roy Olivier

price The can about similar. $X,XXX. sales very the And average know, business Will is between sale I average overall average you $XX,XXX. comment exactly price the margin, the and think probably is and customer lower on academic gross as price sale is is $X,XXX

margin? more difference revenue financially. transactional with but ASP, but typically on associated a a that's have lower you do a Will, has the gross comment big it. the it's lot So

William Nurthen

as flip the gross just as The a platform a does percentage margin, similar. bit. price more side lower -- their a a revenue, transaction lower margin lot generate they help is tend is bottom Yes. which point, And of line to fee, Roy noted. the typically It's but being

Avram Fisher

transaction Right. academic And what a new is significant the it expected customer? from revenue Is or...

Roy Olivier

Well, In XXx. I it's mentioned calls mean platform much, it's that. think much a transaction it's their customer that I've X.Xx on in spends fee the previous than side, higher -- about academic I in average, revenue. sometimes

of a of However, there the is size lot the depending on library. variability

the But next as idea we'll quarter sitting what see of side to today that's and going business. we no comment of on to California have be what in may the impact for the going So able to have here start to example, that Transaction to University is be.

Avram Fisher

Research Solutions (RSSS) 14 Nov 242025 Q1 Earnings call transcript