Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal 2026 was $11.8 million, a slight decrease from $11.9 million in Q2 fiscal 2025 [7] - Platform subscription revenue increased by approximately 14% to $5.2 million, driven by a net increase of 47 platform deployments [7] - Annual recurring revenue (ARR) reached $21.8 million, up 14% year-over-year, with B2B ARR at approximately $15.3 million and B2C ARR at about $6.4 million [7][8] - Gross profit for the quarter was $6.2 million, a 6% increase from the prior year, with a gross margin of 52.4%, reflecting a 350 basis point improvement [9] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2 million in the prior year [11] Business Line Data and Key Metrics Changes - The B2B segment saw strong results with 47 net new deployments, indicating customer excitement about product development [5] - B2C ARR experienced softness due to a pullback in marketing channels, impacting trial-to-subscriber conversion rates [8] - Transaction revenue for Q2 was $6.6 million, down from $7.3 million in the prior year, primarily due to churned accounts and volume reductions from larger customers [8] Market Data and Key Metrics Changes - The company noted increased competition in the B2C segment, which is expected to continue as digital marketing spend becomes more competitive [4] - The total active customer count decreased to 1,321 from 1,384 year-over-year [8] Company Strategy and Development Direction - The company is focusing on B2B annual and multiyear agreements as the primary growth driver, while also making product and sales process improvements [5] - A strategic shift is underway from a document delivery model to an "answers and access" platform, integrating API and AI capabilities [20][25] - The company aims to leverage its unique capabilities in data and rights management to support AI tools and enhance research efficiency [17][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the fiscal year, expecting stronger B2B and transaction performance compared to the first half [16] - The company is focused on maintaining balance sheet flexibility to fund high-return growth initiatives while managing operating expenses [15] - Management acknowledged the potential disruption from AI but believes their unique data capabilities will insulate them from direct competition [16][30] Other Important Information - Cash and cash equivalents as of December 31, 2025, were $12.3 million, reflecting disciplined working capital management [12] - The company has no outstanding borrowings on its revolving line of credit, providing additional balance sheet flexibility [13] Q&A Session Summary Question: Can you discuss the pipeline for B2B deals, particularly related to the API model? - Management noted consistent growth in the pipeline, with many deals now being API integrations, leading to larger contracts [32] Question: What are the trends in B2C business growth? - Management indicated uncertainty about B2C growth, citing increased competition and lower conversion rates from trials to subscribers [33][34] Question: What are the top priorities for improvement? - Key focuses include operating expense management, understanding churn causes, and enhancing working capital management [39] Question: How is AI being utilized internally to improve efficiency? - AI is being leveraged for software development and productivity improvements, with ongoing training for staff [45][51] Question: What is the market opportunity for the infrastructure model? - Management believes the ASP could increase by 20%-30%, with new pricing models being explored for API usage [55] Question: How is the relationship with smaller publishers evolving? - There is a growing interest from smaller publishers in AI rights and collaboration, which could strengthen the company's position [77][80]

Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal 2026 was $11.8 million, a slight decrease from $11.9 million in Q2 fiscal 2025 [7] - Platform subscription revenue increased by approximately 14% to $5.2 million, driven by a net increase of 47 platform deployments [7] - Annual recurring revenue (ARR) reached $21.8 million, up 14% year-over-year, with B2B ARR at approximately $15.3 million and B2C ARR at about $6.4 million [7][8] - Gross profit for the quarter was $6.2 million, a 6% increase from the prior year, with a gross margin of 52.4%, reflecting a 350 basis point improvement [9] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2 million in the prior year [11] Business Line Data and Key Metrics Changes - The B2B segment saw strong results in ARR bookings and net ARR bookings, with 47 net new deployments [5] - Transaction revenue for Q2 was $6.6 million, down from $7.3 million in the prior year, primarily due to churned accounts and volume reductions from larger customers [8] - The platform business recorded a gross margin of 88.1%, a 160 basis point increase compared to the prior year [10] Market Data and Key Metrics Changes - The total active customer count decreased to 1,321 from 1,384 year-over-year [8] - The company experienced increased competition in the B2C segment, impacting growth and conversion rates [4][8] Company Strategy and Development Direction - The company is focusing on B2B annual and multiyear agreements as the primary growth driver, while also making product and sales process improvements [5] - There is a strategic shift towards API and AI integration, evolving from a document delivery company to an answers and access platform [20][25] - The company aims to leverage its unique capabilities in data and rights management to support AI tools and enhance research efficiency [17][30] Management's Comments on Operating Environment and Future Outlook - Management expects continued pressure in B2C and transaction segments but anticipates stronger performance in B2B and overall profitability in the second half of the fiscal year [14][16] - The company is optimistic about its ability to grow cash balances while funding obligations from operating cash flow [12][14] - Management acknowledges the potential disruption from AI but believes their unique data capabilities will provide a competitive advantage [16][30] Other Important Information - The company has no outstanding borrowings on its revolving line of credit, providing additional balance sheet flexibility [13] - Cash flow from operations was $1.4 million, a 35% increase from the previous year, reflecting higher profitability and disciplined working capital management [12] Q&A Session Summary Question: Can you discuss the pipeline for B2B deals? - The pipeline has grown consistently, with many deals now being API integrations with larger customers, resulting in larger contracts [32] Question: What are the trends in B2C business? - There is increased competition in digital marketing, leading to lower conversion rates from trials to subscribers [33][34] Question: What are the top priorities for improvement? - Focus areas include operating expense management, understanding churn causes, and working capital management [38] Question: How is AI being utilized internally? - AI is being leveraged for software development and productivity improvements, enhancing efficiency across teams [44][50] Question: What is the market opportunity for infrastructure sales? - The ASP for infrastructure sales could be 20%-30% higher, with new pricing models being explored [53] Question: How is the relationship with smaller publishers developing? - There is a growing interest from smaller publishers in rights deals, with ongoing discussions to enhance collaboration [76][78]

Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal 2026 was $11.8 million, a slight decrease from $11.9 million in Q2 fiscal 2025 [6] - Platform subscription revenue increased by approximately 14% to $5.2 million, driven by a net increase of 47 platform deployments [6][7] - Annual recurring revenue (ARR) reached $21.8 million, up 14% year-over-year, with B2B ARR at approximately $15.3 million and B2C ARR at about $6.4 million [7] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2 million in the prior year [11] - Adjusted EBITDA for the quarter was $1.3 million, a 36% increase from the year-ago quarter [11] Business Line Data and Key Metrics Changes - The B2B segment saw strong results in both ARR bookings and net ARR bookings, with 47 net new deployments [4] - Transaction revenue for Q2 was $6.6 million, down from $7.3 million in the prior year, primarily due to churned accounts and volume reductions from larger customers [8] - Gross profit for the quarter was $6.2 million, up 6% year-over-year, with a gross margin of 52.4%, reflecting a 350 basis point improvement [9][10] Market Data and Key Metrics Changes - The total active customer count decreased to 1,321 from 1,384 in the same period a year ago [8] - The company experienced increased competition in the B2C segment, impacting results and expected to continue in the second half of the year [3] Company Strategy and Development Direction - The company is focusing on B2B annual and multiyear agreements as the primary growth driver, while also making product and sales process improvements [4] - A strategic shift is underway from a document delivery model to an "answers and access" platform, integrating API and AI technologies [18][24] - The company aims to leverage its unique capabilities in data and rights management to support AI tools and enhance research efficiency [16][20] Management's Comments on Operating Environment and Future Outlook - Management expects continued pressure in B2C and transaction segments but anticipates stronger performance in the B2B segment in the second half of the fiscal year [3][14] - The company is optimistic about its ability to grow cash balances while funding obligations from operating cash flow [12] - Management believes that the transition to an AI-driven environment presents opportunities for growth and innovation [27] Other Important Information - The company is maintaining balance sheet flexibility to fund high-return growth initiatives while managing operating expenses [10][14] - The company has seen a reduction in churn year-over-year, which is a positive trend moving into the third quarter [32] Q&A Session Summary Question: Can you discuss the pipeline for B2B deals? - The pipeline has grown consistently, with many deals now being API integrations, leading to larger contracts [29] Question: What are the trends in the B2C business? - The company is facing increased competition in digital marketing, leading to lower conversion rates from trials to subscribers [30] Question: What are the top three areas for improvement? - Focus areas include operating expense management, understanding churn causes, and working capital management [35] Question: How is AI being adopted internally? - AI is being leveraged for software development and improving productivity across teams [41][47] Question: What is the market opportunity for the API business? - The ASP for API deals could be 20%-30% higher, with new pricing models being explored [50] Question: How is the relationship with smaller publishers developing? - The company is actively engaging with smaller publishers to offer rights deals and enhance collaboration [74]

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