Research Solutions, Inc. (RSSS) Q4 2024 Earnings Report, Transcript and Summary

Good day, and welcome to the Research Solutions, Inc. Fourth Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to John Beisler. Please go ahead.

Thank you, Nick, and good afternoon, everyone. Thank you for joining us today for Research Solutions' fourth quarter and full fiscal year 2024 earnings call. On the call today are Roy W. Olivier, President and Chief Executive Officer; and Bill Nurthen, Chief Financial Officer. After the market close this afternoon, the company issued a press release announcing its results for the fourth quarter in full year fiscal 2024. The release is available on the company's website at researchsolutions.com. Before Roy and Bill begin their prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied due to a variety of factors. We refer you to Research Solutions' recent filings with the SEC for a more detailed discussion of the risks that could impact the company's future operating results and financial conditions. Also on today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors. A reconciliation of those measures to GAAP measures is included in the earnings press release issued this afternoon. Finally, I would like to remind everyone this call will be recorded and made available for replay via a link on the company's website. I would now like to turn the call over to Roy W. Olivier. Roy?

Thank you, John. Overall, it was a strong year for the company as we showed continued progress in many strategic areas of the business, resulting in a transformational year. We completed the acquisitions of Resolute.ai in July of 2023 and scite.ai in December of 2023. Both advanced our leadership position in discovery and analysis capability to our growing suite of research tools. Scite continues to outperform on better-than-expected B2C sales and strong execution on our cross-sell efforts for the B2B side. Scite's B2B business was about $400,000 when we closed the acquisition, and you may recall we added about $250,000 in Q3. In Q4, we added approximately $290,000, which further approves our robust cross-selling strategy progress. We remain uniquely positioned to maintain and build on our strong position as a leading vertical SaaS and AI company, supporting research-intensive organizations. Some of our other meaningful accomplishments during the year that further strengthen our overall value proposition include building a predictable B2C demand generation engine that will produce results as seasonality subsides in the early fall, rebranding to create a cohesive messaging across our portfolio of products and drive internal alignment which launched this week publicly, growing the B2B pipeline by simplifying messaging and execution and refocusing on cross-sells and up-sells. We integrated Article Galaxy and Scite to further strengthen our research platform value prop. We achieved our highest levels of automated delivery in Q4, 76.8% of articles with DOIs were delivered instantly to our researchers. We also realigned the software engineering and product management organizations to improve execution, speed the market, and to better align execution with our strategy. Moving to our financial accomplishments, the company generated $44.6 million in revenue, including $14 million in platform revenue and $30.7 million in DocDel or transactions revenue during the year, all company records. In addition, we generated $2.2 million in EBITDA and $3.6 million in cash flow from operations. Keep in mind that this is in spite of over $1 million in costs associated with the proxy matter we dealt with in the year. ARR stands at $17.4 million and 84% year-over-year improvement, and our platform customer count exceeded 1,000 for the first time in the company's history. Overall, we're proud of the results and excited about the future of our business. I'd like to discuss the business outlook in more detail and provide some context regarding FY ‘25 later in the call. For now, I'll pass the call over to Bill to walk you through our fiscal fourth quarter and full year 2024 financial results in detail. And then I'll wrap up with some comments and outlook for fiscal 2025. Bill?

Thank you, Roy. And good afternoon, everyone. I will begin with a recap of our results for the fourth quarter of fiscal 2024. Total revenue for the fourth quarter of fiscal 2024 was $12.1 million, a 22% increase from the fourth quarter of fiscal 2023, and a new company high for quarterly revenue. Our platform subscription revenue increased 86% to approximately $4.3 million. The growth was primarily driven by platform revenue from the Scite acquisition and a net increase of platform deployments from last year on our core Article Galaxy platform. We ended the quarter with $17.4 million in annual recurring revenue, or ARR, up 84% year-over-year and a little over 5% sequentially. We added about $867,000 of incremental ARR in the quarter, split relatively evenly between B2B and B2C ARR. Scite growth in both B2B and B2C ARR in the quarter was strong and remains above expectations. Additionally, we continue to have good cross-sell success of Scite within our Article Galaxy customer base. Of the $17.4 million in ARR at fiscal year-end, about $12.1 million is B2B ARR, and approximately $5.4 million is ARR associated with Scite’s B2C platform. Please see today's press release for how we define and use annual recurring revenue and other non-GAAP terms. Transaction revenue for the fourth quarter was approximately $7.9 million, a 2.6% increase from the prior year quarter. Our total active customer count for the quarter was 1,398 compared to 1,404 in the same period a year ago. Gross margin for the fourth quarter was 46.5%, a 710 basis point improvement over the fourth quarter of 2023, and a new company high mark for blending gross margin. The increase is due to the ongoing revenue mix shift towards our higher margin platforms business. To provide some perspective on this mix shift, two years ago, in our fourth quarter, platform revenue accounted for about 22% of the total revenue and we had a blended gross margin of 38.3%. Today, the platform revenue mix has been raised to 35% of revenue and that has moved the blended gross margin to 46.5%. In Q4, the platform business contributed 65% of the total gross profit. As the revenue mix shift continues to move in the direction of platform revenue, gross margin should continue to go up and this will ultimately drop more to our bottom line. The platform business recorded gross margin of 85.3%, a decrease compared to 88.1% in the prior year quarter, but within our target gross margin range of low to mid 80%. The decrease is related to the inclusion of Resolute.ai’s revenues, which generate a lower gross margin. Gross margin in our transaction business increased 60 basis points to 25.4%. The increase was primarily attributable to increased copyright margins. This is at the high end of our range and we should expect that transaction gross margins should stay in a range of roughly 24.5% to 25.5%. Total operating expenses in the quarter were $5 million compared to $3.7 million in the prior year quarter. The increase is fully attributable to the addition of the cost bases brought over from the Resolute.ai and Scite acquisitions, including the non-cash depreciation and amortization associated with those acquisitions. Note, there is some seasonality in the Q4 number, which likely reduced the expenses between $200,000 and $300,000 for the quarter. So this quarter's results should not be assumed to be a straight line run rate for our SG&A expense going forward. Our improved gross margin and the containment of operating expenses in Q4 produced a strong income from operations results. Operating income was $662,000 compared to $255,000 in the prior year quarter, a 159% increase, and also a new company record. Other expense for the quarter totaled $3.5 million, which includes a $4.3 million charge related to increase in the earn-out assumption for Scite, offset by a reduction in the earn-out assumption for Resolute.ai, which now sets that earn-out expectation to zero. The increase in the Scite earn-out assumption is based upon the strong activity in the second half of fiscal 2024 and our expectations for the remainder of their earn-out period in fiscal year 2025. It should be noted that this number could change again, either upwards or downwards, as we move closer to the final determination of Scite's earn-out in May 2025. Net loss for the quarter was $2.8 million, or $0.09 per diluted share, compared to net income of $376,000, or $0.01 per diluted share in the prior year quarter. Adjusted EBITDA for the quarter reached a new high at $1.4 million compared to $825,000 in the year-ago quarter, a 70% increase. Now let me turn to our results for the full year fiscal 2024. Before I begin, I'd like to remind everyone that our full year fiscal 2024 includes results of approximately 11 months of contribution from Resolute.ai and seven months from Scite. Total revenue for fiscal 2024 was $44.6 million, an 18% increase from fiscal year 2023. Platform subscription revenue increased 61% to approximately $14 million. Total deployments at year-end were 1,021, a net increase of 186 deployments from the end of fiscal 2023. Transaction revenue for fiscal 2024 was $30.7 million, a 5.7% increase from the prior year. This year's results include a full contribution from the customer contracts acquired from FIZ Karlsruhe compared to just six months in fiscal 2023. Going forward, we expect revenues from the transaction segment to be flat to low single-digit positive as transaction purposes for new customers are offset by the benefits offered within our software platform. Gross margin for fiscal 2024 was 44%, a 500 basis point improvement over fiscal 2023. And again, the improvement is due to the ongoing mix shift to platform revenue. Total operating expenses in fiscal 2024 were $20.4 million compared to $14.5 million in the prior year. The increase is primarily attributable to the addition of the cost bases associated with Resolute.ai and Scite, as well as about $1.5 million in proxy and M&A related expenses incurred in the fiscal year, and then additionally some modest growth in our core cost base. Net loss for fiscal 2024 was $3.8 million, or $0.13 per diluted share, compared to net income of $572,000, or $0.02 per diluted share in the prior year. Adjusted EBITDA for the quarter was $2.2 million -- or for the year, excuse me, was $2.2 million compared to $2 million in fiscal 2023, an 11% increase. The adjusted EBITDA result includes $1.4 million of the aforementioned proxy and M&A related expenses experienced in the fiscal year. Turning to cash flow on our balance sheet, the business continues to deliver strong cash flow. Cash flow from operations in the last half of our fiscal year was approximately $4 million. Recall, after we did the Scite acquisition, our cash balance on December 31, 2023, was $2.7 million. That balance at fiscal year-end now stands at $6.1 million in cash and cash equivalents. I will note that Q3 and Q4 are seasonally our best times for cash flow, so I would not expect anything nearly as strong in the first quarter of 2025. And last year, recall, we actually burned cash in Q1 as this is the time we pay out our fiscal year-end bonuses. That said, barring any acquisition activity, we do expect to increase cash throughout the year and the vast majority of that increase will come in Q3 and Q4 of fiscal 2025. As of fiscal year end, there were no off-standing borrowings under our new $500,000 revolving line of credit and we have no debt. Looking back on fiscal 2024, I did mention that I thought Q3 and Q4 would be pretty clean and that they would give us an opportunity to demonstrate the profit and cash flow potential of the business. We do believe this has played out well and has served to validate our thesis for profit expansion as the platform revenue becomes a larger and larger component of our overall revenue mix. As we look ahead to fiscal 2025, I will note that our early use shows some softness in Q1 ARR growth. Some of this has to do with the seasonality in B2C ARR, which slows in the summer months, and some of this is in our B2B ARR, where we are experiencing longer sales cycles. That said, we still have some time left in the quarter, and our pipelines remain strong. B2C revenue has already started picking up in September. Overall, the profit profile and potential for the business has not changed. We believe we remain on track to deliver long-term value to our shareholders. I'll now turn the call back to Roy. Roy?

Thanks, Bill. As I mentioned before, in many ways, it was a transformational year for research solutions. The two acquisitions increased our total addressable market through providing us with [discovery] (ph) tools, analysis tools, and a new revenue segment with the B2C business. In addition, Scite brought unique capability with the AI assistant, full-text search capability of STM content, the Scite badge, and supporting and contrasting snippets, all of which help researchers better evaluate research and further strengthen our overall value proposition. Moving forward, some of these changes will impact the seasonality of the business. The B2C revenue segment, which is over 30% of the ARR, is impacted by the academic calendar. A large portion of that business is driven by students who tend to take the summer and part of December and January off, which impacts our churn and sign-up rates in that business. Turning to the B2B side of the business, academic enterprise sales is largely driven by budget cycles of universities. Those institutions typically budget and buy at two points during the year covering the December to January and June and July periods. B2B academic is the strongest year-over-year growth segment within Research Solutions. In FY ‘25, we are deliberately splitting our single sales team into a corporate team and an academic team as we have broader product offerings to support higher growth in the academic segment. We will continue to innovate, offering new products, and rolling out new features across our Article Galaxy, Article Galaxy Scholar, and Scite platforms. Over the year, we launched many new features in our three main sources of revenue, including Smart Folders and Article Galaxy, which automatically populate with scientific, technical or medical content results based on your search criteria. We had an instant in platform delivery in the Article Galaxy Scholar or Academic version of that platform. And through integration with Article Galaxy, we added pricing and availability of STM content and search results in the Scite platform. We also continue to add new publishers to the Scite platform's full service capability. In the last half of FY ’24, we added four new publishers and have several more in the works. We also continue to build relationships to provide the most available and accurate access to information possible to our users as evidenced by our partnership with Jisc, J-I-S-C, announced earlier this summer, providing more than 280 higher education research institutions in the UK to access Scite’s capabilities. Macroeconomic headwinds continue to restrict budgets across the corporate and academic customer base. Yesterday's rate cut announcement by the Fed should be the first step to reignite venture capital funding within the biotech sector, but time will tell how much it will truly free customer capital constraints. We continue to work diligently with our existing customers for them to recognize the efficiency and cost savings available through our core platform offerings. We also remain highly focused in searching and evaluating M&A opportunities with the business and have several active conversations ongoing. As a reminder, our strategy is to focus on opportunities that align with our product and company strategy, are accretive to our growth and EBITDA goals, and represent a sizable cross-sell opportunity for us. Valuations continue to be lower than 24 months ago, and we will capitalize on that if the target fits our overall objectives. I want to reiterate that we remain uniquely positioned to maintain and build on our strong position as a leading vertical SaaS and AI company, supporting research intensive organizations. During the past year, we experienced a number of one-time external distractions. However, we maintained our strong financial performance with multiple records and improved positioning from a year-ago. Those one-time items are predominantly behind us and believe our current record financial performance and future quarterly performance, where we will see profitability and EBITDA continue to strengthen, will not go unnoticed in the market. I'd like to thank our [Technical Difficulty] for their continued support and our entire team for driving another record year. With that, I'd like to turn it back over to the operator for Q&A. Operator?

[Operator Instructions] And our first question today comes from Jacob Stephan with Lake Street. Please go ahead.

Yeah, hey guys, thanks for taking the questions. I just wanted to talk about maybe some of the cross-selling success that you're seeing with Scite and Article Galaxy. Maybe it would be kind of helpful if you could help us understand what percentage of Article Galaxy customers also subscribe to Scite, or maybe just any commentary around that?

Yeah, we have not publicly disclosed those numbers, but I would say it's a single digit percentage of the Article Galaxy customer base. So we still have a tremendous amount of opportunity to achieve our target, which is well into the double-digit cross-sells.

Okay, got it. That's helpful. Maybe, some comments you made regarding the Q1 ‘25 softness and ARR growth. I wanted to see if you could kind of help us think about overall impact here. Maybe is this kind of like a flat quarter-over-quarter ARR growth or is this kind of low, mid-single-digit? I guess what are you seeing there?

Yeah, I don’t -- I'm uncomfortable providing guidance because we typically do have a very strong end-of-quarter push. B2C has been challenging because you have basically June, July, August is the summer months, and then you start to see a pickup in the first, second week of September. So we've seen a strong pickup in September, but the first two months of the quarter were not great. They were where we expected them to be, but they're not going to show the kind of improvement that we saw in Q3 and Q4 of last year. On the B2B side, we continue to see some -- a lot more deliberation around making decisions to move forward. We have not seen our win or loss rate materially change. What we've seen is the days to sale continue to extend. At one point, our days to sale was around 90 days. Today, it's running in excess of 120 days. However, our customer acquisition costs on the B2B side continue to be in what I would consider to be good but not necessarily great territory. And what I mean by that is we're running 18, 19 months CAC on B2B versus if you go back 18 months or two years, we were running 13 or 14 months. So -- and that is directly related to just the extension. So we're cautious about Q1 but we'll see how the quarter ends.

Yeah, and maybe, so it sounds like as -- sorry, go ahead, Bill.

Yeah, sorry, I was just going to add to that. Yeah, I think the main thing is, if you look back Q3, Q4 on the B2C side, we had really tremendous growth there. I mean, I think Q3 was almost like $950,000, Q4 $460,000. I think the main thing we're trying to communicate is it's just not going to be near that on the B2C side. At least that's our expectation right now just given, with the seasonality in the business. It has been picking up towards the end. We'll see where it ends up, but I think we're just trying to set some expectation mainly around that, just given we've had two really good strong quarters. I will say we did sort of budget for some of this as well. And so it's not completely out of expectation and our budget plan still ends in a nice place at the end of the fiscal year. And additionally, as I said in my sort of comments, our profit potential remains intact. And so even if there is some softness there, we're still going to have a pretty nice EBITDA quarter in the business. So I just wanted to add those comments as well.

Okay, got it. I appreciate that. That's all the questions I had.

And our next question comes from Richard Baldry with ROTH Capital. Please go ahead.

Thanks. Quite curious, given the strength you've had this year on the back of the acquisitions, how far do you think you are through the integration process on sort of the cost side, the integrating the teams? And then second, how far along would you call like a full pipeline alignment on the cross-sell side, do you think you've managed to climb?

I'm not sure I understand the last part of the question about how far along are we on alignment of the pipeline on the cross-sell, but let me answer the first part first. In terms of integration of cost, I think we're largely complete. I'll let Bill comment on that. He's got some interesting comments here in a second. I think in terms of the integration of Scite, Resolute, Article Galaxy, Article Galaxy Scholar, I would say that Scite is integrated with Article Galaxy, Article Galaxy Scholar to the extent that there is single sign-on in place. We have pricing and availability in Scite. You can click to obtain an article in Scite. You can see all of these Scite badges and information within Article Galaxy. You can click to read the snippets and read everything. So that integration is largely complete and the two products work together very, very well. I think what's left to do is to streamline the user interface and kind of the workflow so that it's not two things that are working well together, it's one seamless workflow as you work through research. And that will be done in the first half of the fiscal year, along with our typical monthly releases that improve our platform products. We're typically doing releases at least every month, in many cases every two weeks. In regards to a Resolute, at Resolute we've not integrated fully with either product. We are planning on integrating some of the Resolute data into the Scite product. That will happen after we have reworked the workflow of the two products working together. The delay in getting that done is simply prioritizing the products that are generating results of revenue and growth over products that have not been performing where we'd like them to perform. So due to Resolute’s results, we've just scheduled that behind getting Scite and Article Galaxy more tightly integrated than they already are. Anything you want to add to that, Bill?

I think that makes sense. The other thing just on cross-selling is we do have basically the sales team pretty much fully trained on being able to sell Scite now. So again, some of the early cross-sell success that we had was basically with some of the sales force just not even being trained yet on it. And so we've been able to do that. And I think that'll help us get some more penetration into our existing customer base, as well as some new sales as we move forward. From the cost side of things, most of the integration cost-wise is done. The one thing we've been working on, which we're hoping to see some improvement on this year is, I do mention in my comments a lot that the year-over-year platform gross margin is down because Resolute has some costs that is dragging that down. And we have been working to take that cost out of the business and have had some success there recently. And so my hope is that we can start to inch that platform gross margin up a little bit more as we build through the year here.

Great. The last one may be, when we think about the M&A pipeline and prospects for it, do you feel like there's an ample number of targets to go after that on a reasonable hit rate, do you think there's meaningful M&A to come? And then, maybe sort of put that against the backdrop of how large or how frequently do you feel like you have the bandwidth internally to do these? Is fiscal ‘24 sort of a good model in your mind above pace, below pace or as you get larger, is there a scale-up that typically could happen with the M&A at the same time?

Yeah, I think I would say in terms of your question, is there targets out there? Yeah, there's a universe of targets out there ranging from a lot of very, very interesting startups which you probably read about every day in the AI space. But a number of businesses that are a few hundred thousand, $1 million to $5 million in revenue, there's even a few we look at that are north of $10 million in revenue, obviously those become beyond our capacity to execute on them for the most part. So, I believe that we can do one, possibly two, depending on size and whether or not they can run independently deals a year. I don't expect to do another deal in calendar 2024, but we do have a number of conversations, and we have a number of the backlog that are kind of scheduled behind that. So for us, we're looking to be a little more choosy now about things that are accretive to our growth objectives and our EBITDA objectives and fit our product strategy. So I don't know if that helps. Bill, anything you want to add?

No, I think you covered that one good.

Great, thanks for your help.

[Operator Instructions] Our next question comes from Allen Klee with the Maxim Group LLC. Please go ahead.

Good afternoon. Could you go into explaining a comment you made that seasonality in fiscal 4Q numbers reduced operating expenses by around $200,000? What is behind that, and does that mean that all else being equal, that will jump $200,000 next quarter? Thank you.

Yeah, sure, Allen. So essentially, yeah, we tend to hold a lot of our accruals on the sales team through the fiscal year as they can. We've seen in the past where a number of them can get on a hot streak towards the end of the year and over -- hit their target, get into accelerators and things like that. And so basically at the end of Q4, over the last couple years now, we've basically gotten to the end and some people didn't make their numbers, and we've reversed some of those bonus accruals. And that's really what's taken down the number to the $200,000 to $300,000 that I mentioned. So, yeah, if you straight line out, you should look -- you should add that back in. And I think Q3's run rate is probably a more representative run rate of our SG&A expense versus Q4.

That's helpful. Thank you. And then you talked about that most of your growth opportunities are in academic and that you're splitting a sales force for that. Could you talk a little bit about why you think academic is more attractive and what the type of opportunities you're going after?

No, just to be clear, what I said is academic is our fastest growing segment. The three segments we play in are corporate, academic, and government. So, because Scite has a very strong academic product and because of the investments we made in improving Article Galaxy Scholar, plus some industry trends around more and more content is being delivered via OA or it's free, yet subscription prices for universities from publishers continue to go up even though a bigger and bigger percentage of that content is free. We have seen more libraries adopt Article Galaxy as a way to manage their costs, and we've seen a number of libraries acquire and be interested in the Scite platform on the enterprise side. So it's simply the Scite product plus the AG product are performing well, and that segment is growing faster than our government segment or our corporate segment. That said, we will continue to focus heavily on the corporate segment where we think our market share is single digit. We will just simply have dedicated academic salespeople because the workflow in the university library is different from the workflow in corporate setting and budget cycle, decision makers, all that is quite a bit different from a corporate environment. So, we think that we can accelerate the sales of both areas, corporate and academic, by having dedicated salespeople that understand the sales process, the decision making process, the workflow, et cetera. So we're not splitting it because we think academic is better than corporate. We're splitting it to get more focus on both and accelerate the growth on both. Anything you want to add, Bill?

No, I think that makes sense.

Got it. Thank you so much. That's it for me.

And our next question comes from Avi Fisher with Long Cast Advisers. Please go ahead.

Hey, guys. Thanks for taking my questions. I mean, 12% EBITDA margins, you've hit the double-digit side. Is that sustainable, do you think, going forward?

Bill, you want to address this?

Yes. Yeah. Sure. Yeah, no, I do think it's sustainable. Again, I think we will have -- we will continue to have the seasonality in the business that we have where we will build EBITDA. My expectation is we will build EBITDA onward from Q1 through Q4. So, from that perspective, you may see it sort of dip below as we kind of go into Q1. We have the outperformance in Q3, Q4 like you saw this year. But we do think the business is capable of that. The one caveat is we always manage on basically that Rule of 40 and if we see some more opportunities and we see opportunities for growth and laying down more advertising expense and things like that, we'll do that. But we'll also communicate that to everybody as well. I still think it's probably low double-digits, but I do think it's possible to maintain that on a fiscal year basis.

I mean, that's great. If you look at 1Q ‘24, if you back out the proxy expenses, you were at about 4%. So it sounds like 1Q ‘25 should jump over that, even if it steps down from 12% sequentially.

Yes.

Great. I mean, I think the EBITDA margin growth and the operating cash flow is incredible. You guys are doing great work. I have a question about the days to sales expanding. So you've been trying to expand your corporate customer base, right, outside of the core customers into new markets. And I'm curious about how that's going, how much of that plays into the increased days to sales. Are you going after different customers? Are you adjusting your sales effort towards that? I just wondered if you could offer some color around that. Thank you.

Yeah, that's a great question. And I think we're still focused on largely the same customers, in other words, the same verticals underneath the corporate segment and academic libraries underneath the academic segment. Having multiple products adds some complexity, so we have to be careful as we're selling to not overcomplicate the sales process, which drags out your days to sale by trying to sell multiple products in the first contract. So in my past life, we always tried to keep it simple, land and expand. Here we try to do the same thing, but a lot of people when we're talking to them about product A and they find out we have product B, they're like, that's interesting, we'd be interested in that as well. And that adds a little bit to the days to sale. I will say though, my interpretation of some of the stretching of the days to sale, there's a part of it, and I don't think it's a majority of it, that is related to just increased number of products and complexity of the sales associated with trying to sell multiple products. I think a lot of it is we're seeing customers who absolutely run a comparison between our product and other products, which adds time to the process. We've seen a lot of customers do longer procurement process, which includes more IT involvement to evaluate our security posture and those sorts of issues. And we've seen involvements where customers ask us to score against a lot of different things around environmental and other issues that add time to sales. So a lot of it seems to be really driven by a longer process on the procurement side of the customers that are making the buying decisions. But as I mentioned earlier, we haven't seen a material change in our percent of pipeline that closes. We've not seen a material change in deals marked won or deals marked lost to competition. So it appears to us to be simply companies being more deliberate and more thoughtful before they pull the trigger than two years ago.

So what you're describing is the marketplace as it is for your existing customers.

No, I'm describing as it is for any customer we talk to. And Bill mentioned we have 186 new logos in the quarter. We run between 100 and 186 a quarter. The vast majority of those are new-new. In other words, the people we have, these are not cross-sells. These are new into a new customer.

Okay. All right. So it's just two years ago compared to new customers two years ago. I get that. And you mentioned earlier, you expect -- you talked about some of the complexity of having two products. Do you expect that to go away by the end of fiscal ‘25 because you are going to be further integrating things?

No, we will continue to sell these products as modules. They will be better integrated. I think the workflow and value to the customer will be more apparent. But we will sell discovery tools which is Scite and Resolute. We will sell access tools which is Article Galaxy and Article Galaxy Scholar. And we will sell reference management tools. And if you buy multiple, you may get a package discount for buying multiple, but they are individual products on the contract that carry an individual price.

Okay. Doesn't sound that complicated to me, but of course I'm not a corporate customer. I appreciate you taking the questions and I'll follow up later. Thank you.

Thank you.

Thank you.

That concludes our question-and-answer session. I would like to turn the conference back over to Roy Olivier for any closing remarks.

All right. Thanks, everybody, for joining us on our call today. I look forward to speaking to you in November to discuss our first quarter fiscal 2025 results. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.