Research Solutions(US:RSSS)2022-09-23 02:02Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $8.6 million, a 4.2% increase from Q4 2021 [13] - Annual recurring revenue (ARR) reached $7.9 million, up almost 8% sequentially and 35% year-over-year [14] - Net loss for Q4 was $438,000 or $0.02 per share, compared to a loss of $89,000 in the prior year [20] - Total revenue for the full fiscal year 2022 increased 3.7% to $32.9 million compared to $31.8 million in fiscal 2021 [22] - Net loss for fiscal 2022 was $1.6 million or $0.06 per share, compared to a loss of $207,000 in the prior year [27] Business Line Data and Key Metrics Changes - Platform subscription revenue increased 32% to $1.9 million in Q4, driven by a net increase in platform ARR bookings [13] - Transaction revenue decreased slightly to $6.7 million from $6.8 million in Q4 2021 [15] - Total platform deployments as of June 30 were 733, a net increase of 180 deployments or 33% from a year ago [23] - Gross margin for the platform business was 87.3%, while transaction business gross margin increased to 24.5% [18][25] Market Data and Key Metrics Changes - The company ended Q4 with 1,213 active customers, a net increase of 81 from the same period a year ago [15] - Renewal rates remained strong in the high 90s, with net renewal rates over 110% for the year [9] Company Strategy and Development Direction - The company aims to accelerate growth through organic means and acquisitions, with a focus on enhancing the sales force and product strategy [33] - A new product, Curedatis, is set to launch in October, targeting the pharmacovigilance market with a total addressable market (TAM) of approximately $650 million [56] - The company is reevaluating its pricing and sales strategy for Article Galaxy Scholar to improve customer take rates [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving adjusted EBITDA and cash flow positive for fiscal year 2023, with expectations of overall topline growth [29] - Early signs of growth in the transaction business were noted, with potential for double-digit overall topline growth in Q1 2023 [30] - Management acknowledged challenges in the transaction revenue but indicated improvements throughout the fiscal year [23] Other Important Information - Total operating expenses for fiscal 2022 were $13.6 million, up from $10.5 million in the prior year, primarily due to increased technology and product development costs [26] - The company has no long-term debt or liabilities and ended Q4 with $10.6 million in cash and cash equivalents [28] Q&A Session Summary Question: How has Galaxy Scholar performed? - Management noted disappointing customer take rates for Article Galaxy Scholar but plans to split it into freemium and premium versions to drive transaction revenues [55] Question: What are the expectations for the new product Curedatis? - Curedatis is expected to generate a few hundred thousand in revenue in FY2023, with a conservative approach to its sales forecast [56] Question: Can you discuss the sales model for the pharmacovigilance product? - The product will be sold through the current sales force, with potential for a dedicated sales team if traction is achieved [67] Question: What is the approach to M&A funding? - The company plans to use a mix of cash and potentially seller notes for acquisitions, avoiding equity due to current stock price concerns [71] Question: How high is the quota attainment rate in sales? - Management indicated that all new sales personnel met their quotas, and there is no capacity problem, only a need to fill the sales pipeline [72]