【海外ITニュース速報】Research Solutions、Inc。(RSSS)Q4 2022収益コールトランスクリプト

【海外ITニュース速報】Research Solutions、Inc。(RSSS)Q4 2022収益コールトランスクリプト

Research Solutions, Inc. (RSSS) Q4 2022 Earnings Call Transcript

Research Solutions、Inc。(RSSS)Q4 2022収益コールトランスクリプト


Research Solutions, Inc. (NASDAQ:RSSS) Q4 2022 Earnings Conference Call September 22, 2022 5:00 PM ET Company Participants John Beisler – Investor Relations Roy Olivier – President and Chief Executive Officer William Nurthen – Chief Financial Officer Bill Nurthen – Chairman Richard Baldry – ROTH Capital Partners, LLC Richard Baldry – Maxim Group LLC Richard Baldry – ROTH Capital Partners, LLC Richard Baldry – Maxim Group LLC Richard Baldry – Maxim Group LLC Richard Baldry (NASDAQ:RSSS) has NYSE:RSSS) Investor Relations John Beisler – Research Solutions’ Roy Olivier and William Nurthen and Roy Olivier and Bill Nurthen – Research Solutions’ Bill Nurthen and Roy Beisler (RSSS) Beisler (RSSS) Beisler (RSSS) Beisler (RSSS) Beisler


Research Solutions、Inc。(NASDAQ:RSSS)Q4 2022収益電話会議2022年9月22日午後5時ET ET ETの参加者John Beisler -Investor Relations Roy Olivier-社長兼社長兼最高経営責任者William Nurthen-チーフ財務責任者ビルヌルセン – リチャード会長Baldry -Roth Capital Partners、LLC Richard Baldry -Maxim Group LLC Richard Baldry -Roth Capital Partners、LLC Richard Baldry -Maxim Group LLC Richard Baldry -Maxim Group LLC Richard Baldry(NASDAQ:RSSS)Research SolutionsのRoy OlivierとWilliam NurthenとRoy OlivierとBill Nurthen-研究ソリューションのビル・ヌルセンとロイ・ベイスラー(RSSS)ベイスラー(RSSS)ベイスラー(RSSS)ベイスラー(RSSS)ベイスラー


Research Solutions, Inc.

Research Solutions、Inc。

(NASDAQ:RSSS) Q4 2022 Earnings Conference Call September 22, 2022 5:00 PM ET Company Participants John Beisler – Investor Relations Roy Olivier – President and Chief Executive Officer William Nurthen – Chief Financial Officer Conference Call Participants Allen Klee – Maxim Group LLC Richard Baldry – ROTH Capital Partners, LLC Operator Good afternoon, everyone, and thank you for participating in today’s conference call to discuss Research Solutions Financial and Operating Results for its Fiscal Fourth Quarter and Full-Year ended June 30, 2022. As a reminder, this conference call is being recorded.

(NASDAQ:RSSS)Q4 2022収益電話会議2022年9月22日午後5時ET ETの参加者ジョン・ベイスラー – 投資家関係ロイ・オリビエ – 社長兼最高経営責任者ウィリアム・ヌルテン – 最高財務責任者の会議会議の参加者アレン・クリー – マキシムグループLLCリチャードBaldry -Roth Capital Partners、LLC Operator Good Afterning、みんな、そして2022年6月30日に終了した第4四半期と通年の研究ソリューションの財務と営業結果について議論するための今日の電話会議に参加してくれてありがとう。電話会議が記録されています。

I would now like to turn the conference over to your host, John Beisler, Investor Relations.


John Beisler Thank you, Ariel, and good afternoon, everyone.


Thank you for joining us today for Research Solutions’ fourth quarter and full-year fiscal 2022 earnings call.

Research Solutionsの第4四半期と通年の2022年の収益コールに今日私たちに参加していただきありがとうございます。

On the call with me today are Roy W.


Olivier, President and Chief Executive Officer and Bill Nurthen, Chief Financial Officer.


After the market closed this afternoon, the Company issued a press release announcing its results for the fourth quarter and full-year fiscal 2022. The release is available on the Company’s website researchsolutions.com.


Before Roy and Bill begin their prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied due to a variety of factors.


We refer you to Research Solutions’ recent filings with the SEC for a more detailed discussion of the risks that could impact the Company’s future operating results and financial condition.


Also on today’s call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors.


A reconciliation of those measures to GAAP measures is included in the earnings press release issued this afternoon.


Finally, I would like to remind everyone this call being recorded and made available for replay via a link on the Company’s website.


I would now like to turn the call over to Roy W.






Roy Olivier Thank you, John, and thanks to everyone joining for our fourth quarter and fiscal 2022 results.

Roy Olivier、John、John、そして第4四半期と2022年度の結果に参加しているすべての人に感謝します。

Before I get into specifics about our performance versus plan, I want to quickly recap some of our results that we accomplished during the fiscal year.


During FY2022, we sold 180 net new customers resulting in net ARR growth of over $2 million for the first time.


Our customer acquisition costs or CAC, a measure of our sales efficiency ran at about 13 months slightly over our target of 12. Our lifetime value to CAC also remains very strong at approximately 9x our CAC.


Both of these measurements put us in the better or best category as defined by Bessemer Venture Partners SaaS guardrails and indicate that we should continue to invest in growing the topline, which we plan on doing.

これらの測定は両方とも、Bessemer Venture Partners Saas Guardrailsによって定義されているように、私たちをより良いまたは最高のカテゴリーにし、トップラインの成長に引き続き投資する必要があることを示しています。

Renewal rates remain strong in the high 90s and our net renewal rates ran over 110% for the year and stand at an internal record on a trailing 12-month basis.


We also started measuring Net Promoter Score or NPS during the year and our average NPS score for the year is 63, well above the 2022 SaaS company average of 41. Both the renewal rates and the NPS score underscore the value we are delivering to our customers and will remain key metrics influencing our strategy moving forward.


During the full fiscal year, we made tremendous progress related to our product strategy, which I will cover in more detail later in the call.


We released significant upgrades to the Article Galaxy platform, including pivoting to a good, better and best version of Article Galaxy.


We also released Article Galaxy References, both a standard and pro version of the software.

また、ソフトウェアの標準バージョンとプロバージョンの両方である記事Galaxy Referencesもリリースしました。

References is a reference manager application that will significantly improve the value proposition of the Article Galaxy platform to our users.


Finally, we are about to release a new product called Curedatis, which is a regulatory compliance tool that is integrated with Article Galaxy.


Curedatis is a pharmacovigilance product intended to help our customers collect, detect, assess, monitor and prevent adverse effects with pharmaceutical and other products.


Pharmacovigilance is required in several vertical markets and countries we serve and is a manual process today in many cases.


This product automates the process and integrates with Article Galaxy to help our customers search, identify and acquire scientific articles that are related to that process.


I’d like to pass the call over to Bill to walk through our fiscal fourth quarter and 2022 year-end financial results in detail, and then I’ll wrap up with some more comments related to our products, strategy and M&A.




William Nurthen Thank you, Roy, and good afternoon, everyone.


I will begin with a recap of our results for the fourth quarter of fiscal 2022. Total revenue was $8.6 million, a 4.2% increase from the fourth quarter of fiscal 2021. Our platform subscription revenue increased 32% to $1.9 million primarily driven by a net increase in platform, annual recurring revenue bookings and deployments from last year, including a new company record of $573,000 in incremental ARR bookings in the fourth quarter along with 53 net new deployments.

2022年度の第4四半期の結果の要約から始めます。総収益は860万ドルで、2021会計年度の第4四半期から4.2%増加しました。プラットフォームの増加、年間の繰り返しの収益予約、昨年からの展開。第4四半期の573,000ドルの増分ARR予約の新しい会社記録と、53のNET New Deploymentsが含まれます。

We ended the quarter with $7.9 million in annual recurring revenue, up almost 8% sequentially and 35% year-over-year, reflecting our continued sales and upselling efforts and low churn of existing platform subscribers.


Please see today’s press release for how we define and use annual recurring revenue in other non-GAAP terms.


Our transaction revenue decreased slightly to $6.7 million from $6.8 million in the fourth quarter of 2021. Our total active customer count for the quarter was 1,213, a net increase of 81 from the same period a year-ago and 20 customers from the third quarter of fiscal 2022. The sequential increase was primarily due to more corporate customers.


I will note that while the trend regarding transaction revenue has been slightly down, the year-over-year performance did improve through the fiscal year after a steep drop-off in the first quarter of fiscal 2022. I will talk more about what I think this means for our upcoming fiscal Q1 and fiscal 2023 later.


Turning to gross margin.


As we continue our mix shift to platform revenue, we continue to see corporate gross margins move up into the right.


In addition, as noted in our press release, we reached an important milestone for the company as this was the first quarter in which the gross profit from our platform business exceeded the gross profit from our transaction business.


Gross margin for the fourth quarter was 38.3%, a nearly 500 basis point improvement over the fourth quarter of 2021. It should also be noted that the increase is not only due to the ongoing revenue mix shift towards our higher margin platforms business, but also to improvement in our transaction margins.


The platform business recorded gross margin of 87.3% in line with our target gross margin range of low-to-mid 80%.


Gross margin in our transaction business increased to 140 basis points to 24.5%.


The increase was primarily due to lower copyright costs in the quarter and some of the pricing initiatives, which we have undertaken.


Total operating expenses in the quarter were $3.7 million compared to $2.8 million in the prior year quarter.


The year-over-year increase is partially related to higher technology and product development costs and includes approximately 275,000 in severance expenses related to the company’s repositioning strategy for fiscal 2023. I will speak more about our outlook for our operating expense in the first quarter of 2023 and fiscal 2023 later in the call.


Net loss for the quarter was $438,000 or $0.02 per share compared to a loss of $89,000 or nil on a per share basis in the prior year quarter.


Adjusted EBITDA for the quarter was a loss of $121,000 compared to a positive $134,000 result in the year-ago quarter.


This adjusted EBITDA is inclusive of the $275,000 in severance charges and without them, adjusted EBITDA would have been positive $154,000, which would have been our best result for the fiscal year.


Now turning to the full fiscal year 2022. Total revenue increased 3.7% to $32.9 million compared to $31.8 million in fiscal 2021. Our growth rate did increase through the fiscal year as we were up 4.6% for the second half of fiscal 2022. Our platform subscription revenue for the full-year increased 32% year-over-year to $6.8 million.


ARR was $7.9 million compared to $5.9 million at the end of fiscal 2021 as we added over $2 million in ARR for fiscal year 2022. Total platform deployments as of June 30 were 733, a net increase of 180 deployments or 33% from a year-ago.


Transaction revenue for the fiscal year was $26.1 million, a 2% decrease from fiscal 2021. We have discussed a number of times that there is a downward bias on the transaction business as our software platform helps customers save unpaid transactions.


That said, this number did improve throughout the fiscal year and was down only 1% for the second half of the year.


We continue to think that as we add new platform customers that this business will at some point return to growth.


Moving to gross margin.


For the full fiscal 2022 gross margin was 36.5%, a 410 basis point increase from the previous year.


Gross margin for the platform business was 86.2% compared to 82.2% in fiscal 2021. We continued to be able to grow the platform business without having to add a great deal of incremental cost.


Gross margin in our transaction business was 23.6% compared to 22.8% in fiscal 2021 as we experienced lower copyright cost and also commenced new pricing initiatives halfway through fiscal year 2022. It has been a goal of ours to increase this gross margin in the transaction business, if only slightly.


Total operating expenses in fiscal 2022 were $13.6 million compared to $10.5 million in the prior fiscal year.


The increase was primarily due to greater technology and product development costs, as we added a new product development and software development headcount in the fiscal year, and also due to higher general and administrative expenses.


The G&A expenses did include some unique items, which include some excess legal and professional services costs and costs to upgrade our core systems such as our ERP and CRM systems.


In addition, severance charges for the full fiscal year totaled $450,000 with an additional $150,000 in accelerated stock compensation.


Net loss for fiscal 2022 was $1.6 million or $0.06 per share compared to a loss of $207,000 or $0.01 per share in the prior year.


Adjusted EBITDA was negative $374,000 in fiscal 2022 compared to positive $700,000 in the previous fiscal year.


Turning to our balance sheet and cash.


Cash flow dipped in Q2 this fiscal year, but improved in Q3 and Q4.


In Q4, our cash flow from operations was relatively breakeven, and we ended the quarter with $10.6 million in cash and cash equivalents.


We started the year with $11 million in cash, so the burn for the year was roughly $400,000 relatively in line with our adjusted EBITDA performance.


There were no outstanding borrowings under our $2.5 million revolving line of credit and we have no long-term debt or liabilities.


As we look ahead, we carry a great deal of momentum heading into our first quarter and full-year 2023. As noted in our press release, we intend to run the business adjusted EBITDA and cash flow positive for fiscal year 2023. From a revenue perspective, we continue to believe the platform can grow at the same rate it has, and that the transactions business will be – likely be flat.


This will start to drive overall topline growth as well as continue to improve our gross margins.


In addition, some of the cost changes that we have made should start to serve to flatten out our cost base as we continue to grow.


As we look towards the first quarter of fiscal year 2023, we are seeing some early signs of growth in the transaction business in addition to our normal growth in the platform business.


If this holds, we should be above 5% overall topline growth with a chance to achieve double-digit overall topline growth in the quarter.


In addition, our operating expenses will be below the levels we experienced in Q3 and Q4 of last fiscal year 2022, resulting in positive adjusted EBITDA for the quarter and a shot at positive GAAP net income.


Lastly, we may see some ebbs and flows in our cost throughout the fiscal year and there maybe some additional costs we need to take on with respect to our operation in Mexico.


However, as noted, the intent is to run adjusted EBITDA and cash flow positive for the year, seeing those numbers accelerate as we hit the second half of the year.


I will provide more details on our fiscal year 2023 outlook in our next call.


I’ll now turn the call back to Roy.




Thank you, Bill.


About 18 months ago, I described the major priorities of the business as follows: First, we were going to focus on accelerating growth.


Second, we were going to review the business with an eye toward ensuring it can support that growth.


Third, we were going to update and roll out our vision, mission and values to our base of employees.


And fourth, we were going to review and update the IR plan to expand the shareholder base and analyst coverage.


I’d like to take a few minutes and provide an update for each of those items.


Regarding accelerating growth are previously communicated that we wanted to accelerate topline growth organically and via acquisitions.


That organic growth was intended to be the result of enhancing our sales force and a revamped product strategy.


As a result, we did expand our sales force, upgraded our prospecting process and CRM and other related systems and improved the process associated with our upsell and renewal teams.


This resulted in 180 net new platform deployments in FY2022 and over $2 million in net ARR growth both records.

これにより、180のNet New Platform Deploymentsが2022年度に展開され、200万ドルを超える純ARR成長の両方のレコードが生まれました。

Our platform growth rate for the year was 32% slightly better than FY2021.


That said, it did remain 32% on a larger base versus declining for the previous four years.


On the product side, we delivered big time.


We pivoted to a good, better and best version of Article Galaxy.


We created and released two versions of a reference manager application called References and References Pro and we will shortly release a pharmacovigilance product.

References and References Proと呼ばれるReference Managerアプリケーションの2つのバージョンを作成およびリリースし、Pharmacovilance製品をまもなくリリースします。

Most of these updates were released in Q4, one in Q1 of FY2023 and line us up well as we seek to continue record new deployments and renewal rates in FY2023.


Regarding acquisitions, the results have been disappointing.


In the first half of FY2022, valuations were a major contributor of not finding anything that met our strategic and financial objectives.


And in hindsight, it is likely a good thing that we did not purchase anything during that time.


I will say that we’ve seen valuation expectations come down and we are now involved in more conversations that I have ever personally been involved in, in my career.


We have found some exciting opportunities and I’m confident that we will have some news in this area soon.


Regarding reviewing our business with an eye towards scalability, much work has been done.


We’ve onboarded an HR Head who is providing some needed organization and structure in addition to helping us monitor and improve our employee engagement.


In the first half of the year, we upgraded our accounting system from a very old unsupported version to a current version that provides much more automation and more options for our customers.


We are currently completing a CRM consolidation project now that began in FY2022, which will include all of our customer data in one place and builds a foundation for automation, which we believe will help us be much more efficient and helpful to our customers, and we believe this will show up an upsells and renewal rates in the future.


We did review and update our mission, vision and values and are now working on effectively communicating them in addition to measuring and improving employee engagement.


While we can’t always improve, we have very low voluntary turnover, which is a testament to our compensation benefits and culture.


In the corporate governance area, we also did several things.


We brought on a new Board Member, Barbara Cooperman, who has extensive marketing and directly relevant experience in our space with Elsevier and LexisNexis.

私たちは、ElsevierやLexisNexisとの私たちのスペースで豊富なマーケティングと直接的な経験を持っている新しい役員であるBarbara Coopermanを持ち込みました。

The other thing we did is changed the way executives are compensated.


In the past, executives earn stock each quarter based on the company results.


We have discontinued that plan and have replaced it with a long-term equity bonus plan.


In this plan, we are providing executives one large grant that vests at specific share prices.


The vesting schedule starts at $3 per share and goes up in $0.75 increments to a top level of $6.


I believe this aligns management interest with yours versus building a large position over time irrespective of increasing shareholder value.


You can review last year’s proxy and one of our recent 8-K filings for more details on the plan structure.


And additionally, we will provide additional details on our first quarter fiscal 2023 earnings call.


And finally, we discussed reviewing and updating our IR plan to drive more shareholder value.


In this area, we are much more active.


We are much more active in the second half of the year compared to the first half of the year and are completing approximately one non-deal roadshow or conference per month.


We have and will continue to pursue additional coverage, including newsletter coverage focused on individual investors.


We do currently have two analysts covering us ROTH and Maxim.


I am disappointed in our current stock price, but do evaluate our stock in two ways.


First, as of a week ago, we were down 29% versus 22% down for the iShares Micro-Cap ETF, which I think is one good benchmark.

まず、1週間前の時点で、iShares Micro-Cap ETFの22%に対して29%減少していました。これは、1つの良いベンチマークだと思います。

For the record, I never like to underperform benchmarks that I think are important.


Second, I also look at the Software Equity Group SaaS Index that comprises 109 publicly traded SaaS software co