ENCINO, Calif., April 21, 2020 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), a SaaS provider of workflow efficiency solutions for R&D-driven organizations, is providing a corporate update and presenting selected preliminary results for its fiscal third quarter ended March 31, 2020.
"Given the unprecedented market uncertainty created by the COVID-19 pandemic, we felt it was important to update our stakeholders on the status of and outlook for our business," said Peter Derycz, president and CEO of Research Solutions. "First and foremost, the health of our employees, consumers and partners is of utmost importance.
"Research Solutions has been operating as a virtual company well before this global virus, which has helped our organization operate without interruption during the stay-at-home mandates implemented around the world. We have the systems, tools, security, processes and procedures in place to operate on a virtual basis. As such, we are also a valuable resource for our customers and suppliers who may need some advice on how to operate most effectively in such an environment.
"Our organization is committed to helping in the struggle against this global virus. While we can't create a magic-bullet cure, we are making contributions to the research community's global effort. In fact, we have introduced specific tools to further assist our clients in researching the pandemic, including the launch of a COVID-19 research viewer gadget and providing copyright free articles pertaining to the virus."
A comprehensive view of the company's COVID-19 resources and policies can be found here.
"Beyond the value of our tailored content," continued Derycz, "Research Solutions provides its clients an efficient resource for all medical and scientific research in both times of economic uncertainty and work-from-home mandates. Our SaaS-based Article Galaxy Platform can help organizations save time and money while providing access to all the research they need remotely. With this all-in-one research solution, organizations can enjoy full-text content at the point of discovery while filtering for lowest cost acquisition, as well as one-click access to scientific papers and lab productivity tools—all in one highly efficient workflow.
"Given our research-focused positioning and SaaS-based platform setup, our company remains in a strong financial position. In fact, our fiscal third quarter shows the momentum of our business accelerating. We expect to report a record increase in annual recurring revenue and record transaction revenue, and our balance sheet is in the strongest position in our history."
Based on preliminary unaudited information, Research Solutions expects total revenue in the third quarter of fiscal 2020 to increase 9% to approximately $8.0 million compared to $7.4 million in the same quarter last year. Platform subscription revenue is expected to increase 36% to approximately $1.0 million with annual recurring revenue expected to increase 39% to approximately $4.1 million, representing the highest quarterly increase in the company's history (see the company's definition of annual recurring revenue below). In addition, Research Solutions expects transaction revenue to increase 6% to approximately $7.0 million.
Cash and cash equivalents at March 31, 2020, amounted to approximately $8.3 million compared to $6.8 million at December 31, 2019. The company has no long-term liabilities or other debt and has full access to a $2.5 million revolving line of credit.
Derycz continued: "These results reflect another strong period of client 'upsells' in our Platforms business, which confirms our users find value in the offering and seek greater access to its functionality. In addition, given the current environment, our R&D-based clients, including approximately 70% of the top pharmaceutical companies, are relying on our seamless access to medical research now more than ever.
"Underlying this financial strength, in March we received approval to list on the Nasdaq Capital Market. We believe the listing will help increase long-term shareholder value by improving liquidity and market awareness, including the expansion of our investor base to more institutional investors. We look forward to continued strong results such as those announced today being recognized in our stock, but now on a much broader trading platform that the Nasdaq delivers.
"Adding to our financial strength and our strategic positioning, we just announced a groundbreaking partnership with Springer Nature, one of the world's largest scientific publishers, that enables small and medium-sized enterprises (SMEs) access to all of their journal and book content via a new offering we call Article Galaxy +. We believe the partnership will allow researchers working for these organizations to benefit from influential content that will empower them to drive research and discovery, while staying ahead of the competition. We look forward to expanding upon all of this momentum when we report our third quarter results in a few weeks."
Research Solutions expects to report its full fiscal third quarter 2020 results on May 14, 2020. Information on the call details will be provided in a separate press release.
Annual Recurring Revenue
The company defines annual recurring revenue as the value of contracted Platform subscription recurring revenue normalized to a one-year period.
About Research Solutions
Research Solutions, Inc. (NASDAQ: 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.
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; 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 Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this press release include statements regarding the expected reporting of record annual recurring revenue and transaction revenue, expected total revenue, platform subscription revenue, annual recurring revenue and transaction revenue, expected cash and cash equivalents, increased long-term shareholder value, improved liquidity and market awareness, expansion of the Company's investor base, continued strong financial results, and anticipated benefits to researchers from the Company's Springer Nature content offering. The Company assumes no obligation to update the cautionary information in this release.
SOURCE Research Solutions, Inc.