Research Solutions(US:RSSS)2020-05-15 02:30Financial Data and Key Metrics Changes - Platform subscription revenue increased by 36% to $1 million, driven by a 33% year-over-year increase in total platform deployments from 281 to 374 [14] - Annual recurring revenue reached $4.1 million, up 12% sequentially and 39% year-over-year, reflecting consistent upselling and low churn [15] - Transaction revenue increased by 6% to $7 million, with transaction count rising from approximately 212,000 to 228,000 [16] - Consolidated revenue grew by 9% to $8 million compared to $7.4 million in the same year-ago quarter [16] - Gross margin for the platform business increased by 50 basis points to 82.5%, while consolidated gross margin rose by 210 basis points to 31.6% [17][18] Business Line Data and Key Metrics Changes - The number of corporate customers increased by 1% to 845, while academic customers grew by 11% to 270 [16] - The platform business is expected to continue improving as it becomes a higher percentage of revenue, contributing to overall gross margin enhancement [18] Market Data and Key Metrics Changes - The company has successfully transitioned to a virtual operating model, which has allowed it to maintain operations without interruption during the COVID-19 pandemic [10][11] - The company has not experienced any disruption to its business or lost clients due to the pandemic, with R&D efforts in the life sciences industry expanding [31] Company Strategy and Development Direction - The company is focused on enhancing its platform's value to the scientific and medical community, particularly during the pandemic [12] - A new partnership with Springer Nature was announced, launching Article Galaxy Plus, which provides access to 35% of the world's scientific literature [23] - The company aims to democratize access to scientific literature for small and medium-sized businesses, traditionally only available to larger organizations [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the challenges posed by the COVID-19 pandemic, citing a strong cash position and zero debt [38] - The company remains vigilant and optimistic about demand trends moving forward, with continued momentum into the fourth fiscal quarter [38] Other Important Information - The company received approvals for its up listing to NASDAQ and began trading in late March, which is expected to enhance liquidity and market awareness [6] - A new billing policy for copyright-free COVID-19 articles has been implemented to ensure customers are not charged for articles that should be free [36] Q&A Session Summary Question: Update on partnerships with Springer and Evidence Partners - The partnership with Evidence Partners is progressing well, with technical integration set to launch [41] - The integration will allow customers to use both platforms seamlessly, enhancing upsell opportunities [42] Question: Economics of Article Galaxy Plus - The pricing for Article Galaxy Plus is designed to provide a net boost, with no sacrifice in revenue [44] Question: SG&A capability to support growth - The company believes it has sufficient SG&A capability to support growth, with potential resource shifts to focus on sales and marketing [46] Question: Capital allocation strategy - The company aims to maintain a strong balance sheet while being opportunistic in product improvements and partnerships [51] Question: Industry recognition and brand awareness - The company aspires to be a recognized leader in the life sciences industry, similar to Bloomberg, and is focused on expanding brand awareness [53]