Research Solutions, Inc

Thank you for standing by. This is the conference operator. Welcome to the Research Solutions Second Quarter 2023 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. I would now like to turn the conference over to John Beisler, Investor Relations. Please, John, go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to the Research Solutions second quarter fiscal 2023 earnings call. On the call today are Roy W. Olivier, President and Chief Executive Officer, and Bill Northern, Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the second quarter of fiscal 2023. The release is available on the company's website at researchsolutions.com. Before Ryan and Bill begin their prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and 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 condition. Also on today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliation of those measures to GAAP measures are included in the earnings press release issued this afternoon. Finally, I would like to remind everyone this call is recorded and made available for replay via a link on the company's website. With that, I would like to now turn the call over to Roy.

Thank you, John, and thanks to everyone joining us today. As I review and think about our Q2 results, I'm generally happy with the 30 plus percent year over year growth in our platform revenue and the continued growth in our transaction revenue and the cash flow and EBITDA performance versus the same period last year. We are experiencing some headwinds in terms of net ARR growth in what we call new, new bookings, which is defined as a new platform and a new transaction customer. While our net renewal rates continue to be over 110%, we have seen some increase in churn and smaller customers related to the general economic conditions and uncertainty. The overall net ARR growth is behind where I'd like it to be, but it is a big improvement over Q1 in terms of our new bookings. Transaction revenue growth was strong for the second consecutive quarter, and does not include any revenue from the FIS acquisition, which will start to show up in Q3's results. We're very proud of the $1 million in EBITDA improvement and the $1.3 million in cash flow improvement in the first half of 2023 versus the same period in 2022. I will provide some more detailed comments about the state of the business after Bill walks you through the results in more detail.

Bill? Thank you, Roy, and good afternoon, everyone.

Total revenue for the second quarter of fiscal 2023 was 8.7 million, a 10.7% increase compared to the second quarter of fiscal 2022. As noted in our press release, this represents our second consecutive quarter of double-digit revenue growth. Platform revenue increased 31% to 2.1 million, primarily driven by a net increase of platform deployments over the last 12 months, including 34 net new deployments in the second quarter and upselling of current platform customers. Annual recurring revenue, or ARR, at the end of the quarter stood at 8.8 million, up 5% sequentially and 28% year over year, reflecting our continued sales and upselling efforts and low churn of existing platform customers. We also had three sales in the quarter related to our newly launched Secure Datas product. Please see today's press release for our definition and use of annual recurring revenue and other non-GAAP items. As I turn to transaction revenue, I'll comment that the numbers to follow do not include any impact from the FIS transaction that was completed in our fiscal Q1. This customer acquisition will begin impacting transaction revenue in our fiscal Q3 And I will talk more about that later. Transaction revenue for the second quarter was 6.6 million compared to 6.3 million from the prior year quarter. This represents 5.4% growth year over year and is the second consecutive quarter of growth for the transactions business. In the past, we had noted wanting to see two consecutive quarters of growth prior to saying that we could be well positioned for growth in this business segment going forward. We are now seeing signs that that trend can continue as we are seeing growth in both corporate and academic paid transaction counts. Transaction customer count for the quarter was 1,223 versus 1,179 in the second quarter of fiscal 2022. The increase was driven by an increase in corporate customers. Gross margin for the first quarter was 39%, a 300 basis point improvement over the second quarter of fiscal 2022. The increase is due to the revenue mix shift towards our higher margin platforms business, which now constitutes 24% of the revenue and 55% of the business's gross profit. With some limited exceptions, which I will note later in the call, we see no reason why the trend in improvement in corporate gross margin percentage cannot continue as the mix of platform revenue continues to grow. The platform business recorded gross margin of 88%, a 240 basis point increase from the prior year quarter due to proportionally lower labor and software costs. I expect that for the foreseeable future, we can continue to maintain platform gross margin at 85% or above. Gross margin in our transaction business was 23.4%, similar to the prior year quarter. Our expectation is that transaction gross margin will continue to stay within a range of 23% to 24%. Total operating expenses in the quarter were $3.7 million compared to $3.3 million in the prior year quarter, due primarily to higher non-cash stock-based compensation costs and higher discretionary sales and marketing spend. I want to take a moment here to explain the stock compensation expense as it is notably higher for this quarter. As many on the call are aware, starting with this fiscal year, we ended the prior restricted stock program for executives and installed a new long-term equity bonus program. The fundamental change when we did this was to eliminate a program where executives received restricted stock as part of their quarterly bonus and replace it with a program designed to better align executive compensation with stockholder interests. This involved the granting of 1.8 million restricted shares across the executive team, which vest in 20% increments when the stock attains and maintains price levels of $3, $3.75, $4.50, $5.25, and $6 per share within the next five years. If the stock prices are not attained, the shares do not vest. Conversely, if the stock fully vests at $6, this would imply an over $100 million market cap increase with the payout to executives being under 10% of that amount. Restricted stock grants such as these require a third-party valuation to determine how they are expensed. The high volatility of our stock drove the value of the grant upwards, and it has been determined that the value of the grant is roughly $2.5 million to be spread over approximately 2.6 years. Thus, this is the amount that we will expense during that time. The net of all this is that from a stock compensation expense standpoint, we are presently dealing with the runoff expense from the old plan, while effectively accelerating or pulling forward some of the expense associated with the new plan, as the expense for the new plan is weighted more earlier in the 2.6-year period and will eventually expense to zero and not continue indefinitely. In addition, in Q2, we also had our annual Board Stock Option Grant, which served to increase the compensation expense as well. For Q3 and Q4, I expect stock compensation expense to be approximately $500,000 for each quarter, $300,000 coming from the new plan, and $200,000 coming from the runoff of the old plan. In fiscal year 2024, we should start to see the expense come down from these levels. I apologize for the long-winded explanation there, but we thought it important to discuss it given the expense level in Q2 and also to reiterate the point that we believe the new plan over the long term will prove more beneficial for our shareholders. Turning back to profitability, net loss for the quarter was $256,000 or one cent per share compared to a net loss of $482,000 or two cents per share in the prior year quarter. Removing the effects of the new restricted stock plan, our net income would have been roughly or close to break even from a gap perspective. Adjusted EBITDA was positive 201,000 compared to a loss of 165,000 in the year-ago quarter. We have now generated over 600,000 of adjusted EBITDA in the first six months of the fiscal year compared to a loss of over $300,000 in the first six months of our prior fiscal year. Turning to our balance sheet and cash, the increase in adjusted EBITDA has been backed up by an increase in cash flow which I think speaks well to the quality of our earnings as they grow. Cash equivalents as of December 31, 2022 were $11.3 million versus $10.6 million on June 30, 2022. We have now generated over $1 million of cash flow from operations in the first six months of our fiscal year. There were no outstanding borrowings under our $2.5 million revolving line of credit,

and we have no long-term debt or liabilities. As we look ahead, I wanted to make everyone aware of a few items.

First, on January 1st, we moved all of our employees in Mexico to a direct hire relationship. We expect this will result in approximately $400,000 of additional annualized costs and may cause a slight dip in gross margin in Q3 before it starts rising again. Second, commencing January 1st, realizing revenue from transactions related to our FIS customer contract acquisition. It is too early to provide a projection of the impact of these new customers, but we do think it gives us an opportunity to continue to push transaction growth upward, perhaps hitting double-digit growth rates in that segment. Some unique expense items that will be hitting us in Q3. As a result, I expect our operating expense level to be at its highest level for the year in Q3 before coming back down again in Q4. Tested EBITDA for Q3 will likely be flat to down from Q2, then showing upside in Q4, resulting in a very strong finish to our fiscal year. I'll now turn the call back to Roy.

Roy? Thanks, Bill.

In the next few minutes, I'll give you an overall update on how the business is working and how that will translate into long-term value creation. First, I'd like to discuss marketing and sales. As you know, we brought in a new head of marketing in 2022 who has built out a new team that is starting to execute around driving marketing qualified leads or MQLs. We have, for the first time, launched several programs around webinars, newsletters, product release notes, and social media. These programs are driving more MQLs and are generating both new new sales and upsells. While there's lots left to do, I'm very excited about the progress in this team in terms of driving activity, MQLs, and sales. Regarding sales, we showed an improvement in the new new sales team for Q2 versus Q1. but we are still behind our internal plan. Upsells and existing sales continue to show strong results as reflected in our net renewal rate continuing to be over 110%. We've seen an uptick in churn, primarily from businesses shutting down or being acquired. You may recall that our target for net ARR growth is over 500K a quarter, and we are not at that level. And I don't expect to be at that level in the second half of the year. That said, We are doing a lot of great things in the sales teams in terms of training, better materials, better products, more MQLs, and upgrades to our business development teams that drive leads. I think in the long term, that will help drive more results as the economy continues to improve. We feel that we are well prepared to regain momentum and accelerate sales as the market recovers. From an operational perspective, we've made many improvements to customer onboarding, technical support, and transaction operations that are driving improvements across the organization. This is reflected on our NPS score remaining over 60, and the fact that we can deliver the increase in transactions reflected in the year-over-year growth in that segment with no new headcount. Turning to product releases or reference manager products, I'm sorry, turning to product releases, Our reference manager products, specifically References and References Pro, have had strong early adoption. We've upgraded over 125 accounts, which has helped us maintain the high net renewal rates I referenced above. The Cure Datas launch is going well, and we are tracking with our rather conservative plan for 23 and have over 200 pipelines. I'm sorry, have over 200 opportunities in the pipeline. We've also continued to see positive traction with our add-in products, specifically our Outlook and Word add-ins, as well as our browser extensions. All of this has resulted in a nice uptick in active users. Our active users at the beginning of fiscal 23 ran in the 22,000 a month rate. Most recently, we were seeing almost 40,000 active users in the platform, which helps explain some of the transaction year-over-year growth. The transaction business in Q2 improved primarily from significant year-over-year growth with the academic and government users. The FIS implementations and customer onboarding is complete but not reflected in the Q2 numbers. Preliminary numbers indicate that we transferred almost 70% of the FIS customer base, which has resulted in early signs of strong revenue growth in January. In looking at the January numbers, we are seeing similar academic and government year-over-year growth as Q2, plus strong corporate growth based on FIS and the aforementioned increase in active users. We continue to be very active in M&A opportunities and have walked away from two opportunities that were in the IOI or LOI stage. We continue to be very focused on improving our overall product value through integrating an AI NLP or artificial intelligence, natural language processing solution into several points in the researcher workflow. Getting the right deal done remains our highest priority. As I mentioned in my earlier remarks, I remain cautious about the outlook for the next couple of quarters in terms of net ARR growth. However, this does not change my view regarding long-term opportunity for our business. I'm more excited than ever about the activities that we are doing in sales, product, marketing, and M&A, and remain confident in the value of our products, in the value that our products bring, and will continue to bring to our customers. I think we are really well positioned to deliver shareholder value as the general economy and markets improved, and we are poised to see growth on both our top and bottom lines. With that, I'd like to turn it back over to the operator for Q&A.

Operator Operator Can you hear me now?

Yes.

Okay, we will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Richard Baldry from Ross Copto. Please go ahead.

Thanks. I know you guys are newer at the helm of the company. I'm curious if you know from board level, maybe chatting, what has the pattern been historically for macro pressuring churn? I would assume that in the short term, people can make decisions to step back briefly, but Now this seems central to what most of your customers do. So how quickly do they tend to come back afterwards? You know, what sort of patterns should we think about there?

Yeah, this is Roy. I think that's a, that's a great question. And, and we did some research on public companies, specifically the publishers and what they went through in the last kind of economic downturn. And all of them remained pretty strong. They maintained maybe a few points below their previous growth rates. And then they bounced back very quickly because a lot of the organizations don't stop doing research and don't stop having a need and a down economy. And I think that is reflected in the churn that we are seeing are typically our smaller customers. They're very, very, very small. Timm Johnson, When we look at logo count it's a little higher than we would like, and then the dollars are not even anywhere close to our average revenue per sale, so. Timm Johnson, We are seeing a little bit of an uptick we are concerned about it, but it is not happening with larger more established accounts it's primarily very small accounts anything you want to add bill.

Yeah, just to add on to that, I think the larger accounts that have been with us a long time, you know, they do actually achieve and realize the savings associated with being on the platform. So, you know, it's something where they're actually saving money by being on the platform. And so I think we're less concerned about issues there and losing customers there. I think more of the pressure is just getting new customers to adopt the platform in the environment.

Then can you talk a little bit about the successes you're starting to see early in the pharmacovigilance side? How is that working in the sales motion? Are you going to put dedicated people on that as you start to see the successes and have more referenceability? Can your existing group kind of handle both products at once? Thanks.

Yeah, we think that the model we have now, which is the existing group, handles the products with the support of a product specialist is the right model. I think as we grow, we may get to a point where we want a dedicated sales team. But right now, certainly our hunting and upsell teams of over a dozen people are good in terms of setting up appointments and getting interest. And then we have a product specialist that goes in, does the demo, and walks the customer through the product. So I think that's certainly working at this point, and I don't expect that to change between now and the end of the fiscal year.

And then with the FIS, Carlsruhe type of acquisitions, partnerships, how do we think about what should happen with sort of active customer counts starting this year, this calendar year, and sort of the impact that could have on ARR going forward?

Well, I think in the short term, it'll have very little impact on ARR because these are primarily transaction-only customers. So two things are happening. Number one, we're onboarding them and they're starting to buy articles from us, which I think will be reflected in a nice bump in year-over-year growth rates in the transaction business. And the transaction business, the incremental cost to deliver those is very, very low. We don't need to bring on any incremental headcount to do that. So I think that will nicely flow to the bottom line. On the ARR side, all of those customers we look at as an opportunity to upsell into the full platform. And, you know, when we think about what does that look like in the calendar year, probably very little impact. But over the next one to two years, I think we'll convert a percentage. I don't know what that percentage is, but as a reminder, the company research solutions in general, you know, converted 60 plus percent of their existing transaction only customers over two and a half to three years. So we could, if we execute convert a material percentage of them.

The last thing would be the first half cashflow from ops has been pretty strong. Was there anything, sort of unusual in that? Is there any seasonality we should be thinking about? And how do you think that plays out sort of in the second half? Thanks.

Bill, you want to take that one?

Yeah, no, I think not much unusual in it. I think, again, there's a couple things that we've done. One is that we had made prepayments to are some of our publishers and they previously were occurring about three times a year. So that was causing some lumpiness in the cash flow. We've redone those arrangements to make them four times a year in equal increments. And so that's helped to smooth things along. And I think that while there's some variation in prior quarters, I think that's going to bring less variation as we move forward this fiscal year. You know, we are getting a little more interest on our cash, but that's not really contributing the vast majority of the gain. And I will say, you know, usually seasonally the toughest quarter is Q1 because that is when we are paying out, you know, bonuses for the fiscal year and sales bonuses for overachievement. And so we sort of got through that in Q1, was not really applicable in Q2, and won't be applicable again. Q3 and Q4. So I think we could see still some seasonality over time. I think it will align, as I said, very closely with EBITDA. But I don't see a reason why we can't continue to produce good cash flow for the rest of this fiscal year.

Great. Thanks. Congrats on the quarter. Thank you. Thank you.

The next question comes from Alan Clee from Maximum Group.

Please go ahead.

Hello. I was curious how you think about what percent of incremental ARR drops to EBITDA?

Bill? Yeah, that's a good question. You know, again, I think

is really the vast majority of it at that 85% gross margin rate. We don't need a lot of additional G&A type costs or support costs to support that additional dollar of ARR. So it is our quickest path to increased profitability is increasing the ARR dollars. We have shown that over time. And as you've seen that gross margin go up that, you know, we can support additional revenue there without a much more proportionally increased cost. So any additional dollars that sort of drop kind of below the gross margin line is just a question of, you know, are we reinvesting those or not? And, you know, if you really sort of look at the expenses, we are making some some intentional, uh, uplifts and, and, and expense, uh, not, not too material, but some uplifts, but they're in the right areas. They're in, they're in sales and marketing, they're in product, you know, it's not in GNA and things like that. And so, um, so again, it's going to be sort of, uh, commensurate with those gross margin levels.

Got it. And I heard, I was a little confused on something. I heard that as you add new customers transactions, there's very little cost to that. So a lot of it drops to the bottom line, but I thought that the transaction gross margins were kind of 20, you saying 24 to 25%. So what could you explain what you meant by what you said?

Yeah, just to clarify, I should have said the gross margin. from the trends and incremental transaction revenue we're bringing in will mostly drop to the bottom line because we're not bringing in any incremental headcount to handle the growth. It's being handled by the current staff and team. Bill, I'm sorry I interrupted you.

Yeah, as you say, keep in mind a lot of that gross margin is influenced by the margin on the actual article itself, which is a very tight margin. And so really that gross margin could swing a little bit favorably to us because the labor component that is needed to also process those is not growing. But again, you have to remember the vast majority of the cost associated in that business segment is the royalty back to the publisher. But all that said, from just a total EBITDA perspective, you know, the more transactions grow, There's still many coming into that kind of margin range, but more actual EBITDA dollars will flow to the bottom line.

Okay, so the way to think of that is of the 70% of FIS-based business that you transferred over would follow those dynamics.

Yes, it's going to be similar gross margins. However, again, the more the transactions grow, you're going to drop more dollars to the bottom line.

Okay, great. Thank you so much. Thank you.

Once again, if you have a question, please press star then 1 on your telephone keypad.

The next question comes from Peter Robover from Oxford. Article Carpto. Please go ahead.

Hey, guys. Hey, I had a bunch of questions. One is more housekeeping on the cash flow. It looks like you, a majority of that came from the lowering of the prepaid royalties. Is that more of the lumpiness, or are you expecting that number to go down in general going forward? So that's one.

Yeah, sure. So when you look at that, there's basically, and the history there, you look, there's two things that are causing the variation when you look year over year. And again, I think this is going to smooth out over time, but, uh, prior we were making prepayments three times a year. So certain quarters, we didn't have a prepayment in, and that those times were getting compared to other quarters where we had a prepayment that has now changed. We're starting with this fiscal year. we're making our payments each year, each quarter equally in each quarter. So that should help smooth some of the variability there. The other thing that is happening is those prepays are getting actually exhausted quicker than they had been in the past due to the transaction growth. So as the transaction grows, we exhaust those prepays, those prepays go down. And really what you saw is that we had, you know, put a lot of prepays on the books coming into the year. And by the end of December here, I've exhausted a lot of that prepay. And that basically, you know, led to some of the cash flow gains, you know, from that perspective. But again, I think there's a lot of variability when you look last six months to this next six months. I think you'll see less changes in those accounts as we move forward.

Okay. And then I noticed a $300,000 asset purchase. Is that with a transactions business that you were mentioning earlier?

Yes, that is the deposit we made on the FIS transaction that we've been talking about, the customer contract acquisition.

Okay.

Roy, I got a question for you. So for some of us that have been here for a few years, A lot of the marketing stuff that you mentioned, webinars, you know, social media, you know, et cetera. If I remember, you know, that was tried in 2017, 2018. You know, Peter was experimenting with lots of those marketing things, which was not a lot of success. So I'm curious what's changed now that, you know, that makes you guys so confident that these things will result in MQLs, I believe, et cetera.

Yeah. Yeah, I think the biggest thing that changed is the team now is very metric dashboard oriented. So we literally have a live changes every day dashboard in our CRM system that shows here are the sources of these leads. And we're able to attribute an investment back to an actual sale. So, you know, I was sitting through a marketing review in the last week and they were able to report, yes, on a year to date basis, X percent of our upsell revenue was contributed directly back to these programs. Y percent of our new revenue was attributed directly back to these programs. And that's enabled us to make, I think, better decisions about, okay, let's double down investment in this program that's generating results. Let's dial back investment in this program that's not generating a good return on that investment. So for me, I'm not I obviously was not the CEO in 2017, so I did not see if we had those type of dashboards, but we do now. And I had made it clear to the marketing team, we're not going to invest discretionary investments in growth opportunities unless we can measure it back. And they've done a nice job of building out workflow into CRM. And we also integrated the two CRMs we had into a single CRM that also includes the whole marketing engine product. so that we now can track this stuff and see if it works. So, you know, going forward, uh, the objective is to invest in what's working and not invest in what doesn't work.

Okay, great. Thanks for the clarity on that. And then, uh, I was wondering if you could update us on, uh, uh, a, the, uh, academic platforms product. I know you rolled it out a few quarters ago and be, you know, the, uh, we haven't heard about this in a, in a few years, but you did have, uh, evidence partners, I believe, partnership, almost three years ago. So I'm just curious how that's worked out and whether that's making any progress.

Yeah, good question. On the Article Galaxy Scholar, and as a reminder, we have both a free version and a paid version. And at the beginning of this year, we decided that to really put a lot of emphasis on the free version to drive installs to generate transactional revenue in the short term and provide an upgrade ARR opportunity in the long term. That's working pretty well. We're in the high 30s in terms of installs this year. Some of those are paid. Some of those are free. And we're seeing very significant year-over-year growth in the academic segment as a result of that strategy. I'm not crazy about the amount of ARR we're generating in the academic scholar space because it's just a much tougher market and different from our corporate market. But it's generating some really nice incremental transactional revenue. And we are able to at least get installs that we can upgrade to the premium version of AGS later. So anyway, I think generally that strategy is working. The partnership opportunity that you mentioned, I think in general we could do a better job in partnerships. We do have occasional wins based on the specific one you mentioned and others that we have around the world. We probably have 12 or 13 partnerships, but none of them are driving huge amounts of revenue. The bulk of the heavy lifting around here in terms of upsells and new-new is our direct sales force.

Okay, great. I really appreciate all the comments, and I'll let somebody else take the next question.

Thank you.

The next question comes from George Melas from MKH Management.

Please go ahead.

Great, thank you, operator. Good afternoon, guys. On the new products, so Pure Data and on reference management, can you give us a little bit of an update on that? And on specifically, I mean, how do you I mean, the reference management seems to take a lot of uptake, so clearly they seem to be a good product fit there. Maybe can you comment on that and also on the product market fit for Curidatus?

Yeah, in terms of references, as I mentioned, we have 125 or 126 upsells so far this year. It's been, you know, I think a a pretty exciting product. A lot of people like it. It's completely integrated into the workflow instead of you having to, you know, do your search in one place and then get your document in one place and then store it in a different place. So people really like it and we continue to have a high number of demonstrations on the product. So I think that product's a really nice home run in some ways, maybe a triple, but it's definitely driving new sales and upsells. In terms of Curedatus, Curedatus is on plan, but we had a very, very conservative plan. I think the customers that have acquired it like it. The prospects we've showed it to really like it. I think we still need to figure out the sales model there. It's a little bit different, and it's a different decision maker in many cases. So we're still tweaking kind of how we sell it, who we sell it to, and what the messaging is. But generally, the users, the people that are actually doing the pharmacovigilance work inside of the corporations love what it does. So I think that product will gain momentum through the second half of the year.

Great. The care data is clearly the new product. The reference manager, are you replacing your existing product and other people's product? How does that work?

Yeah, great question. We've got a couple drivers to that business. We did have I guess I would describe it as a light reference manager application that we call Bidly Ago. You may remember hearing that in previous calls or on our public filings or website. So references and references pro ultimately will replace Bidly Ago. So the number I mentioned are customers that are either upgrading from nothing or upgrading from Bidly Ago into references, references pro, or other new customers that we've sold and onboarded as a result of references pro. I think, did you have another question or was that it?

What I'm wondering is that my understanding is there were some companies in that space that had a big share of that space and that they were trying to expand sort of, you know, add functionality and clearly you have the transaction and the platform side and you're adding these apps and these features. Yep. My question there is Roy, but I'm trying to understand how you make any progress replacing other people's product.

Yeah. Great question. I think there's a, there, there was a company in Europe that's been a competitor that was a reference manager application. They had a freemium premium model, so they would give away a free version that they would upgrade to a corporate enterprise version later. and they were trying to move into the document delivery or doc delivery space that we're already in. We, on the other hand, of course, were moving doc delivery into references. We've had virtually no churn to that company. We have not lost competitive new deals to that company. I think that while they probably still have the edge on us in terms of features, I think we deliver 90% of their feature set, and we do a much better job on the doc delivery side. So I think going forward, we'll continue to narrow any feature gaps and we'll compete well with them. That said, we're not taking share from them. And we are competing on a number of deals to displace a current provider. We have won a handful of smaller ones. We have not won any of the very large enterprise ones. I've sat through a couple of presentations that were 500 plus seat deals. opportunities, and those are typically long sales cycle, you know, very long, drawn-out process. So, we've not won any of those yet, but we're definitely engaged and fighting to displace some current providers in larger accounts.

Great, great, great, Carter. Thank you very much. Thank you.

This concludes today's question and answer session.

I would like to turn the conference back over to Roy Olivier for any closing remarks.

Great. Thank you. Quick reminder, we will be participating in the Roth Capital Partners Conference in March. For more information on that event, please feel free to contact your Roth sales rep. And appreciate everyone for joining us today and have a great afternoon.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.