Research Solutions Reports First Quarter Fiscal Year 2026 Results

Rhea-AI Summary

Research Solutions (NASDAQ: RSSS) reported results for the fiscal first quarter ended September 30, 2025, showing continued SaaS transition progress. ARR rose 21% to $21.3M, with B2B ARR up to $14.8M and B2C ARR $6.5M. Platform revenue increased 18% to $5.1M and now represents 42% of total revenue. Total revenue was $12.3M. Gross margin improved 270 basis points to 50.6%. Net income was $749K and Adjusted EBITDA was $1.47M. Operating cash flow rose 31% to $1.1M, with TTM cash flow of $7.3M.

Positive

• ARR +21% to $21.3M
• Platform revenue +18% to $5.12M
• Total gross margin improvement of 270 bps to 50.6%
• Net income of $749K (Q1 FY2026)
• Adjusted EBITDA +15.8% to $1.47M
• Operating cash flow +31% to $1.1M (quarter)

Negative

• Transaction revenue down 6.8% to $7.19M
• Total active customers declined 4.6% to 1,326
• Sales and marketing expense increased 40% to $1.67M

Reports 21% Increase in ARR to $21.3 Million, Strong Growth in Net Income, Adjusted EBITDA and Operating Cash Flow

HENDERSON, Nev., Nov. 13, 2025 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, reported financial results for its fiscal first quarter ended September 30, 2025.

Fiscal First Quarter 2026 Summary (compared to prior-year quarter)

• Annual Recurring Revenue ("ARR") up 21% to $21.3 million, which includes approximately $14.8 million of B2B recurring revenue and $6.5 million of B2C recurring revenue.  Net B2B ARR growth of $561,000 was up over 300% from last year and represents the best organic Q1 performance in Company history.
• Platform revenue up 18% to $5.1 million.  Platform revenue accounted for 42% of total revenue as compared to 36% in the prior-year quarter.
• Total revenue of $12.3 million, a 2% increase.
• Gross profit up 8% to $6.2 million. Total gross margin improved 270 basis points to 50.6%.
• Net income of $749,000, or $0.02 per diluted share, compared to $669,000 or $0.02 per diluted share.
• Adjusted EBITDA increased 16% to $1.5 million. On a trailing twelve-months ("TTM") basis, the Company has now generated Adjusted EBITDA of $5.5 million, which represents an 11.1% margin.
• Cash flow from operations increased 31% to $1.1 million, compared to $843,000. On a TTM basis, the Company has now generated $7.3 million of cash flow from operations.

"Our first quarter results show the continued progress of our transformation toward award winning SaaS and AI solutions. We posted the strongest organic Q1 growth on record within our B2B business, aided by winning multiple six-figure deals, including our largest ever Scite AI deal, which are being driven in part by the new capabilities offered within our Article Galaxy and Scite platforms, including API access, an AI rights add-on and the launch of Scite rankings. With these deals our Average Sales Price ("ASP") is now near all-time high levels," said Roy W. Olivier, President and CEO of Research Solutions. "We also continue to make incremental progress towards our 'Rule of 40' target, thanks to a 21% year-over-year increase in total ARR and our second-best EBITDA quarter in Company history. Lastly, the business continues to generate strong cash flow, placing us in a very strong position to reinvest into our sales and marketing efforts to further drive better execution and deliver for our shareholders."

Fiscal First Quarter 2026 Results

Total revenue was $12.3 million, compared to $12.0 million in the year-ago quarter, driven by increased platform revenue versus the prior-year period.

Platform subscription revenue for the quarter was $5.1 million, an 18% year-over-year increase from the prior-year period. The increase was due to organic growth in the core B2C and B2B platforms, with the latter increasing due to a mix of new logo generation as well as upsells and cross sells into existing customers. The quarter ended with annual recurring revenue of $21.3 million, up 21% year-over-year (see the Company's definition of annual recurring revenue below).

Transaction revenue was $7.2 million, compared to $7.7 million in the first quarter of fiscal 2025. The decrease was due to lower per article fees on paid orders.  The transaction active customer count for the quarter was 1,326, compared to 1,390 customers in the prior-year quarter (see the Company's definition of active customer accounts and transactions below).

Total gross margin improved 270 basis points from the prior-year quarter to 50.6%. The increase was primarily driven by the continued revenue mix shift to the higher-margin Platforms business, including the expansion of the gross margin for that business.

Total operating expenses were $5.3 million, compared to $5.1 million in the first quarter of 2025. The increase was primarily related to higher sales and marketing expenses offset by reduced general and administrative and stock-based compensation expenses.

Net income in the first quarter was $749,000, or $0.02 per diluted share, compared to $669,000, or $0.02 per diluted share, in the prior-year quarter. Adjusted EBITDA was $1.5 million, compared to $1.3 million in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Conference Call
Research Solutions President and CEO Roy W. Olivier and CFO Bill Nurthen will host the conference call, followed by a question-and-answer period.

Date: Thursday, November 13, 2025
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-203-518-9708
Conference ID: RESEARCH

The conference call will be broadcast live and available for replay until December 13, 2025 by dialing  1-412-317-6671 and using the replay ID 11160315, and via the investor relations section of the Company's website at http://researchsolutions.investorroom.com/.

Fiscal First Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter

			Quarter Ended September 30,
			2025	2024	Change	% Change
	Revenue:
		Platforms	$   5,120,840	$   4,329,645	$    791,195	18.3 %
		Transactions	7,191,345	7,714,837	(523,492)	-6.8 %
	Total Revenue		12,312,185	12,044,482	267,703	2.2 %
	Gross Profit:
		Platforms	4,510,465	3,782,478	727,987	19.2 %
		Transactions	1,714,833	1,983,398	(268,565)	-13.5 %
	Total Gross Profit		6,225,298	5,765,876	459,422	8.0 %
	Gross profit as a % of revenue:
		Platforms	88.1 %	87.4 %	0.7 %
		Transactions	23.8 %	25.7 %	-1.9 %
	Total Gross Profit		50.6 %	47.9 %	2.7 %
	Operating Expenses:
		Sales and marketing	1,666,825	1,190,407	476,418	40.0 %
		Technology and product development	1,410,151	1,372,758	37,393	2.7 %
		General and administrative	1,675,359	1,930,176	(254,817)	-13.2 %
		Depreciation and amortization	316,066	312,095	3,971	1.3 %
		Stock-based compensation	212,482	417,989	(205,507)	-49.2 %
		Foreign currency translation loss (gain)	(17,256)	(104,240)	86,984	-83.4 %
	Total Operating Expenses		5,263,627	5,119,185	144,442	2.8 %
	Income (loss) from operations		961,671	646,691	314,980	48.7 %
	Other Income (Expenses):
		Other income (expenses)	(191,053)	68,525	(259,578)	NM
		Provision for income taxes	(21,231)	(46,212)	24,981	-54.1 %
	Total Other Income (Expenses):		(212,284)	22,313	(234,597)	NM
	Net income		$      749,387	$      669,004	$      80,383	12.0 %
	Adjusted EBITDA		$   1,472,963	$   1,272,535	$    200,428	15.8 %
			Quarter Ended September 30,
			2025	2024	Change	% Change
	Platforms:
		B2B ARR (Annual recurring revenue*):
		Beginning of Period	$ 14,197,598	$ 12,060,201	$ 2,137,397	17.7 %
		Incremental ARR	560,874	127,633	433,241	339.4 %
		End of Period	$ 14,758,472	$ 12,187,834	$ 2,570,637	21.1 %
		Deployments:
		Beginning of Period	1,171	1,021	150	14.7 %
		Incremental Deployments	14	8	6	75.0 %
		End of Period	1,185	1,029	156	15.2 %
		ASP (Average sales price):
		Beginning of Period	$        12,124	$        11,812	$           312	2.6 %
		End of Period	$        12,454	$        11,844	$           610	5.2 %
		B2C ARR (Annual recurring revenue*):
		Beginning of Period	$   6,721,356	$   5,363,129	$ 1,358,227	25.3 %
		Incremental ARR	(186,159)	67,666	(253,825)	NM
		End of Period	$   6,535,197	$   5,430,795	$ 1,104,402	20.3 %
		Total ARR (Annualized recurring revenue):	$ 21,293,669	$ 17,618,629	$ 3,675,040	20.9 %
	Transaction Customers:
		Corporate customers	1,002	1,074	(72)	-6.7 %
		Academic customers	324	316	8	2.5 %
		Total customers	1,326	1,390	(64)	-4.6 %

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 ("ARR") as the value of contracted Platform subscription recurring revenue normalized to a one-year period.  For B2C ARR, this includes the annualized value of monthly subscriptions, meaning their monthly value multiplied by twelve.

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 (gain) loss, provision for income taxes, depreciation and amortization, stock-based compensation, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

			Quarter Ended September 30,
			2025	2024	Change	% Change
	Net Income (loss)		$      749,387	$      669,004	$      80,383	12.0 %
	Add (deduct):
		Other (income) expense	191,053	(68,525)	259,578	NM
		Foreign currency translation loss (gain)	(17,256)	(104,240)	86,984	-83.4 %
		Provision for income taxes	21,231	46,212	(24,981)	-54.1 %
		Depreciation and amortization	316,066	312,095	3,971	1.3 %
		Stock-based compensation	212,482	417,989	(205,507)	-49.2 %
	Adjusted EBITDA		$   1,472,963	$   1,272,535	$    200,428	15.8 %

About Research Solutions
Research Solutions, Inc. (NASDAQ: RSSS) is a vertical SaaS and AI Company that simplifies research workflow for academic institutions, life science companies, and research organizations worldwide. As one of the only publisher-independent marketplaces for scientific, technical, and medical (STM) content, the Company uniquely combines AI-powered tools—including an intelligent research assistant and full-text search capabilities—with seamless access to both open access and paywalled research. The platform enables organizations to discover, access, manage and analyze scientific literature more efficiently, accelerating the pace of scientific discovery. For more information and details, please visit www.researchsolutions.com 

Important Cautions Regarding Forward-Looking Statements

Certain statements in this press release may contain "forward-looking statements" regarding future events and our future results. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the markets in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "targets," "goals," "projects", "intends," "plans," "believes," "seeks," "estimates," "endeavors," "strives," "may," or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Such risks and uncertainties include those factors described in the Company's most recent annual report on Form 10-K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports filed with the Securities and Exchange Commission. Examples of forward-looking statements in this release include statements regarding enhanced product offerings, additional customers, creating long-term value for shareholders and the Company's prospects for growth. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. For more information, please refer to the Company's filings with the Securities and Exchange Commission. 

Research Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
		September 30,			June 30,
		2025			2025
Assets
Current assets:
Cash and cash equivalents		$	11,955,763		$	12,227,312
Accounts receivable, net of allowance of $126,398 and $182,324, respectively			6,899,181			7,191,234
Prepaid expenses and other current assets			720,261			580,257
Prepaid royalties			80,438			925
Total current assets			19,655,643			19,999,728
Non-current assets:
Property and equipment, net of accumulated depreciation of $978,832 and $964,883, respectively			68,695			60,769
Intangible assets, net of accumulated amortization of $3,042,399 and $2,736,773, respectively			9,411,321			9,686,241
Goodwill			16,372,979			16,372,979
Deposits and other assets			982			957
Total assets		$	45,509,620		$	46,120,674
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses		$	7,600,243		$	7,443,757
Deferred revenue			9,982,074			10,702,120
Contingent earnout liability, current portion			7,296,225			7,363,152
Total current liabilities			24,878,542			25,509,029
Non-current liabilities:
Contingent earnout liability, long-term portion			5,036,758			6,683,488
Total liabilities			29,915,300			32,192,517
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued and outstanding			—			—
Common stock; $0.001 par value; 100,000,000 shares authorized; 32,823,996 and 32,479,993 shares issued and outstanding, respectively			32,824			32,480
Additional paid-in capital			39,975,022			39,059,557
Accumulated deficit			(24,294,306)			(25,043,693)
Accumulated other comprehensive loss			(119,220)			(120,187)
Total stockholders' equity			15,594,320			13,928,157
Total liabilities and stockholders' equity		$	45,509,620		$	46,120,674

 

Research Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss)
(Unaudited)
		Three Months Ended
		September 30,
		2025			2024
Revenue:
Platforms		$	5,120,840		$	4,329,645
Transactions			7,191,345			7,714,837
Total revenue			12,312,185			12,044,482
Cost of revenue:
Platforms			610,375			547,167
Transactions			5,476,512			5,731,439
Total cost of revenue			6,086,887			6,278,606
Gross profit			6,225,298			5,765,876
Operating expenses:
Selling, general and administrative			4,947,561			4,807,090
Depreciation and amortization			316,066			312,095
Total operating expenses			5,263,627			5,119,185
Income from operations			961,671			646,691
Other income			126,913			68,525
Change in fair value of contingent earnout liability			(317,966)			—
Income before provision for income taxes			770,618			715,216
Provision for income taxes			(21,231)			(46,212)
Net income			749,387			669,004
Other comprehensive income (loss):
Foreign currency translation			967			(6,168)
Comprehensive income		$	750,354		$	662,836
Basic income per common share:
Net income per share		$	0.02		$	0.02
Weighted average common shares outstanding			31,234,875			30,346,871
Diluted income per common share:
Net income per share		$	0.02		$	0.02
Weighted average common shares outstanding			32,070,121			31,200,917

 

Research Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
		Three Months Ended
		September 30,
		2025			2024
Cash flow from operating activities:
Net income		$	749,387		$	669,004
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			316,066			312,095
Stock options expense			58,706			28,856
Restricted common stock expense			153,776			389,133
Adjustment to contingent earnout liability			317,966			—
Changes in operating assets and liabilities:
Accounts receivable			292,053			566,194
Prepaid expenses and other current assets			(140,004)			(5,944)
Prepaid royalties			(79,513)			494,713
Accounts payable and accrued expenses			158,728			(618,140)
Deferred revenue			(720,046)			(992,792)
Net cash provided by operating activities			1,107,119			843,119
Cash flow from investing activities:
Purchase of property and equipment			(17,539)			—
Net cash used in investing activities			(17,539)			—
Cash flow from financing activities:
Common stock repurchase			(23,387)			(16,119)
Payment of contingent acquisition consideration - Scite and FIZ			(1,337,857)			—
Net cash used in financing activities			(1,361,244)			(16,119)
Effect of exchange rate changes			115			(2,258)
Net increase (decrease) in cash and cash equivalents			(271,549)			824,742
Cash and cash equivalents, beginning of period			12,227,312			6,100,031
Cash and cash equivalents, end of period		$	11,955,763		$	6,924,773
Supplemental disclosures of cash flow information:
Cash paid for income taxes		$	21,231		$	46,212
Non-cash investing and financing activities:
Contingent consideration accrual on asset acquisition		$	29,117		$	33,353
Common stock issued for Scite earnout payment		$	726,714		$	—

 

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SOURCE Research Solutions, Inc.

FAQ

What was Research Solutions (RSSS) ARR for Q1 FY2026?

Research Solutions reported ARR of $21.3M for the quarter ended September 30, 2025, up 21% year-over-year.

How much revenue did RSSS generate from platform subscriptions in Q1 FY2026?

Platform subscription revenue was $5.12M in Q1 FY2026, an 18% increase year-over-year.

What was Research Solutions' net income and EPS for Q1 FY2026?

Net income was $749K, or $0.02 per diluted share for Q1 FY2026.

How did RSSS' Adjusted EBITDA perform in Q1 FY2026?

Adjusted EBITDA increased to $1.47M in Q1 FY2026, a 15.8% rise versus the prior-year quarter.

Did Research Solutions' cash flow from operations change in Q1 FY2026?

Yes. Operating cash flow rose 31% to $1.1M for the quarter, with TTM operating cash flow of $7.3M.

What customer and transaction trends did RSSS report for Q1 FY2026?

Transaction customers fell to 1,326 (down 4.6%), and transaction revenue declined to $7.19M (down 6.8%).