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Press Releases


Research Solutions Reports Fiscal First Quarter 2019 Financial Results

November 14, 2018

ENCINO, Calif. – November 14, 2018 – Research Solutions, Inc. (OTCQB: RSSS), a provider of workflow efficiency solutions for R&D-driven organizations, reported financial results for its fiscal first quarter ended September 30, 2018.

Fiscal First Quarter 2019 Highlight vs. Year-Ago Quarter

  • Total revenue increased 3% to $7.0 million.
  • Platform revenue up 52% to $589,000, with a 48% increase in total Platform deployments to 239. Annual recurring revenue up 54% to $2.4 million.
  • Transaction revenue up slightly to $6.4 million, with customer count up 6% to 1,084.
  • Total gross margin up 210 basis points to 28.0%.
  • Net loss from continuing operations was $0.2 million, or $(0.01) per share, compared to a net loss of $0.8 million, or $(0.04) per share.

Management Commentary

“Fiscal 2019 began on a strong note with continued momentum in our Platform business, which helped drive consolidated gross margin higher on a sequential basis for the third straight quarter,” said Peter Derycz, president and CEO of Research Solutions. “The value of the Platform is also growing, as reflected by our annual recurring revenue that has reached nearly $2.5 million. Unique enhancements like near-daily innovation produced by our ‘Gadget Factory’ is also helping drive value and strong customer retention.

“At the beginning of our second fiscal quarter, we launched version 2.2 of our Platform, which features new self-registration capabilities that allow for more efficient lead generation and frictionless sign-ups. We believe this upgrade will increase the pace of deployments and provide important analytics that will drive more efficient sales and marketing campaigns. In fact, we have already received a few hundred self sign-ups since the launch despite no marketing campaigns, including various enterprise inquiries. The release of version 2.2 also included the introduction of our Reference Manager gadget. Reference and citation management is an activity that most of the scientific community engages in, and we’re excited to bring this ground-breaking gadget to life after months of R&D. Given our continued Platform momentum, and a new sales and marketing strategy underway, we expect fiscal 2019 to be another successful year for our business.”

Fiscal First Quarter 2019 Financial Results

Total revenue increased 3% to $7.0 million compared to $6.7 million in the same year-ago quarter. Platform subscription revenue increased 52% to $589,000 compared to $388,000 in the year-ago quarter. The increase was due to a 48% increase in the total number of paid Platform deployments to 239. The quarter ended with annual recurring revenue up 54% to $2.4 million (see the company's definition of annual recurring revenue below).

Transaction revenue increased slightly to $6.4 million compared to the same year-ago quarter. Total active customers increased 6% from 1,022 to 1,084, and transaction count declined slightly from 205,000 to 202,000 (see the company's definition of active customer accounts and transactions below).

Total gross margin increased 210 basis points to 28.0% from 25.9% in the same year-ago quarter. The increase was primarily driven by a 320 basis point increase in Platform gross margin and the continued revenue mix shift to the higher-margin Platform business.

Total operating expenses improved to $2.2 million compared to $2.6 million in the same year-ago quarter. The decrease was primarily due to the continued optimization and transformation of sales and marketing resources, lower stock-based compensation expenses, and a handful of open positions.

Net loss from continuing operations improved to $0.2 million, or $(0.01) per share, compared to a net loss of $0.8 million, or $(0.04) per share, in the year-ago quarter. Adjusted EBITDA totaled $(0.1) million compared to $(0.5) million in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Cash and cash equivalents at September 30, 2018, amounted to $4.5 million compared to $4.9 million at June 30, 2018. There were no outstanding borrowings under the company’s $2.5 million revolving line of credit. Apart from a $0.2 million office lease liability due to new accounting guidance for leases, the company had no long-term liabilities or other debt.

Further details about these results are available in the company’s quarterly report on Form 10-Q, which is available in the investor relations section of the company’s website at www.researchsolutions.com.

Conference Call

Research Solutions President and CEO Peter Derycz and CFO Alan Urban will host an investor conference call to discuss these results and the company’s outlook, followed by a question and answer period.

  • Date: Wednesday, November 14, 2018
  • Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time
  • Toll-free dial-in number: 1-855-327-6837
  • International dial-in number: 1-631-891-4304
  • Conference ID: 10005768

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and via the investor relations section of the company’s website at www.researchsolutions.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through November 28, 2018.

  • Toll-free replay number: 1-844-512-2921
  • International replay number: 1-412-317-6671
  • Replay ID: 10005768




Active Customer Accounts, Transactions and Annual Recurring Revenue

The company defines active customer accounts as the sum of the total quantity of customers per month for each month in the period divided by the respective number of months in the period. The quantity of customers per month is defined as customers with at least one transaction during the month. A transaction is an order for a unit of copyrighted content fulfilled or managed in the Platform. The company defines annual recurring revenue as the value of contracted Platform subscription recurring revenue normalized to a one-year period.

Use of Non-GAAP Measure – Adjusted EBITDA

Research Solutions' management evaluates and makes operating decisions using various financial metrics. In addition to the company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the company's operating results.

The tables below provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. Adjusted EBITDA is defined as net income (loss), plus interest expense, other income (expense), foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, gain on sale of discontinued operations, and other potential adjustments that may arise.

Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):




About Research Solutions

Research Solutions, Inc. (OTCQB: RSSS) provides workflow efficiency solutions for R&D-driven organizations in life sciences, technology and academia worldwide. Our Software-as-a-Service platform provides tools or “Gadgets” that allow users to discover, access, manage and collaborate around science, technology and medical (STM) content and data. Our customers range from 70 percent of the top 25 global pharmaceutical companies to emerging small and medium-sized businesses. We generate recurring revenue from subscriptions to our SaaS platform and transactional revenue from the sale of STM content. For more information, visit www.researchsolutions.com.

Important Cautions Regarding Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the company's products in the market; the company's success in obtaining new customers and new Platform deployments; the company's success in technology and product development; the company's ability to execute its business model and strategic plans, and all the risks and related information described from time to time in the company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the company's Securities and Exchange Commission Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. The company assumes no obligation to update the cautionary information in this release.





Source: Research Solutions

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