Research Solutions(US:RSSS)2019-09-19 20:01Financial Performance - Total revenue for the year ended June 30, 2019, was $28,793,922, representing a 2.8% increase from $28,018,441 in 2018[136]. - Platforms revenue increased by 54.4% to $2,809,201 in 2019 from $1,819,149 in 2018[136]. - Total gross profit rose by 13.5% to $8,343,461 in 2019 compared to $7,349,325 in 2018[136]. - Total operating expenses increased by 3.2% to $9,598,424 in 2019 from $9,299,461 in 2018[136]. - Loss from operations improved by 35.6%, decreasing to $(1,254,963) in 2019 from $(1,950,136) in 2018[136]. - Net loss for the year was $(959,958), a 42.8% improvement from $(1,678,741) in 2018[136]. - Total revenue increased by $775,481, or 2.8%, for the year ended June 30, 2019, driven by a $990,052 increase in Platforms revenue, while Transactions revenue decreased by $214,571[137]. - Gross profit increased by $994,136, or 13.5%, with Platforms gross profit rising by 59.8% to $2,301,826, and Transactions gross profit increasing by 2.2% to $6,041,635[141]. - Net loss decreased by $718,783, or 42.8%, to $959,958, attributed to increased gross profit despite higher operating expenses[146]. Revenue Recognition and Accounting - The company adopted ASC 606 for revenue recognition on July 1, 2018, with no impact on consolidated financial statements[124]. - Subscription revenue is recognized ratably over the term of the subscription agreement, typically one year[126]. Cash Flow and Working Capital - Cash and cash equivalents increased by $444,910 to $5,353,090 as of June 30, 2019, primarily due to cash provided by operating activities[150]. - Net cash provided by operating activities was $576,446, resulting from an increase in deferred revenue of $644,460[151]. - The company had working capital of $2,867,562 and stockholders' equity of $3,031,715 as of June 30, 2019[149]. - The company had no outstanding borrowings under its line of credit as of June 30, 2019, with approximately $2,215,000 of available credit[156]. Expenses and Costs - Platforms cost of revenue increased by 33.9% to $507,375 in 2019 from $378,904 in 2018[136]. - Technology and product development expenses rose by 19.0% to $2,139,950 in 2019 from $1,798,048 in 2018[136]. - Stock-based compensation expense increased by 4.7% to $827,172 in 2019 compared to $790,236 in 2018[136]. - Operating expenses rose by $298,963, or 3.2%, primarily due to a $341,902 increase in Technology and product development expenses[143]. Adjusted EBITDA - Adjusted EBITDA improved by $651,048, from $(1,015,523) in 2018 to $(364,475) in 2019, reflecting better core operating performance[159]. - Adjusted EBITDA does not account for cash expenditures or future capital requirements[163]. - Adjusted EBITDA does not reflect changes in working capital needs[163]. - Adjusted EBITDA does not include interest expenses or cash requirements for servicing debt[163]. - Depreciation and amortization are non-cash charges, but future replacements will require cash[163]. Platform Features and Services - The company provides access to over 70 million existing STM articles and over one million newly published STM articles each year through its platform[119]. - The platform allows for electronic delivery of single articles, typically completed in under an hour, enhancing customer service efficiency[120]. - The company has added new interactive app-like gadgets to its platform, aimed at improving data extraction and research workflows[117]. - The platform is designed to be a single, multi-tenant system, providing scalability and stability for customers[118]. Currency and Exchange Rates - The average period exchange rate for the Euro to US Dollar was 1.14 for the year ended June 30, 2019, compared to 1.19 in 2018, reflecting a strengthening of the US Dollar[133]. - The company does not engage in currency hedging activities, which may expose it to exchange rate fluctuations[132].