Research Solutions Reports Fiscal Third Quarter 2025 Results

Rhea-AI Summary

Research Solutions (NASDAQ: RSSS) reported strong fiscal Q3 2025 results with significant growth metrics. The company achieved total revenue of $12.7 million, up 4.5% year-over-year, driven by a 22% increase in platform revenue to $4.8 million. Notable achievements include a 23% increase in Annual Recurring Revenue (ARR) to $20.4 million and 43 net new platform deployments. The company demonstrated improved profitability with net income of $216,000 ($0.01 per diluted share) and record Adjusted EBITDA of $1.4 million. Gross margin improved by 430 basis points to 49.5%, and the company generated record quarterly cash flow from operations of $2.9 million. The growth was particularly strong in AI-based B2B offerings, which grew over 180% in the last year, while maintaining solid performance in B2C offerings and core Article Galaxy platform.

Positive

• Record quarterly B2B ARR growth of $736,000
• Platform revenue up 22% to $4.8 million, now representing 38% of total revenue
• Gross margin improved 430 basis points to 49.5%
• Record quarterly operating cash flow of $2.9 million
• 180% growth in AI-based B2B offerings over the last year
• Adjusted EBITDA increased 47.7% to $1.4 million

Negative

• Transaction revenue declined 4.2% to $7.8 million
• Transaction customer count decreased from 1,426 to 1,380 year-over-year

Insights

Financial Analyst

Research Solutions delivers strong Q3 with 23% ARR growth to $20.4M, strategic shift to higher-margin platform business driving profitability improvements.

Research Solutions' Q3 FY2025 results demonstrate substantial progress in its strategic transformation toward a higher-margin platform business model. Total revenue increased 4.5% to $12.7 million, with platform revenue surging 22% to $4.8 million - now representing 38% of total revenue versus 33% a year ago.

The company reached a significant milestone with Annual Recurring Revenue (ARR) growing 23% year-over-year to $20.4 million, including $13.5 million in B2B recurring revenue and $6.9 million in B2C recurring revenue. The quarterly B2B ARR growth of $736,000 marked a company record, while management noted their AI-based B2B offerings have grown 180% over the past year.

Profitability metrics showed impressive improvement across the board. Gross margin expanded 430 basis points to 49.5%, driven by the shift toward the platform business which carries substantially higher margins (87.4% versus 26.0% for transactions). Net income more than doubled to $216,000 ($0.01 per diluted share), and Adjusted EBITDA grew 47.7% to $1.4 million. On a trailing twelve-month basis, Adjusted EBITDA reached $5.1 million (10.4% margin).

Cash generation was particularly strong, with a company quarterly record of $2.9 million in operating cash flow, providing enhanced financial flexibility for future investments or acquisitions.

The company added 43 net new platform deployments during the quarter, bringing the total to 1,133 (up 15.3% year-over-year). While transaction revenue declined 4.2% to $7.8 million and transaction customers decreased 3.2% to 1,380, this is consistent with the strategic pivot toward the higher-value platform business.

Operating expenses increased 5.9% to $5.7 million, primarily due to higher Sales and Marketing expenses (up 43.2%). However, this investment was more than offset by the 14.3% increase in gross profit, demonstrating effective operating leverage and disciplined cost management. The nine-month results further reinforce these positive trends, with Adjusted EBITDA up 335.9% compared to the prior year period.

Reports 23 Percent Increase in ARR to $20.4 Million and 43 Net New Platform Deployments, Positive Net Income and Record Adjusted EBITDA and Cashflow

HENDERSON, Nev., May 8, 2025 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, reported financial results for its fiscal third quarter ended March 31, 2025.

Fiscal Third Quarter 2025 Summary

• Total revenue of $12.7 million, compared to $12.1 million in the prior-year quarter.
• Platform revenue up 22% to $4.8 million. Platform revenue accounted for 38% of total revenue as compared to 33% in the prior-year quarter.
• Annual Recurring Revenue ("ARR") up 23% to $20.4 million, which includes approximately $13.5 million of B2B recurring revenue and $6.9 million of B2C recurring revenue.  Net B2B ARR growth in the quarter was $736,000, a Company record for quarterly B2B growth.
• Gross profit up 14% from the prior-year quarter. Total gross margin improved 430 basis points to 49.5%.
• Net income of $216,000 or $0.01 per diluted share, compared to net income of $76,000 or nil per diluted share in the prior-year quarter.
• Adjusted EBITDA of $1.4 million compared to $961,000 in the prior-year quarter.  On a trailing twelve-months ("TTM") basis, the Company has now generated Adjusted EBITDA of $5.1 million, which represents a 10.4% margin.
• Cash flow from operations of approximately $2.9 million in the quarter, which was a Company quarterly record, compared to $2.0 million in the prior-year quarter.

"This quarter represents a number of significant milestone achievements for our Company.  We are pleased to report ARR above $20 million for the first time in our history. Revenue from our AI-based B2B offerings has grown over 180% in the last year, and we continue to experience strong growth in our B2C offerings and core Article Galaxy platform. These results are due in part to our revamped sales strategy, which better demonstrates to potential customers the improved efficiency and cost savings offered by our products within the research process workflow," said Roy W. Olivier, President and CEO of Research Solutions. "As we experience strong organic growth in ARR sales, we continue to outperform when it comes to generating operating cash flow and Adjusted EBITDA, which positions us to reinvest in our business or make acquisitions that broaden our product capabilities and enhance our cross-selling opportunities." 

Fiscal Third Quarter 2025 Results

Total revenue was $12.7 million, a 4.5% increase from $12.1 million in the year-ago quarter as platform revenue growth more than offset a decline in transaction revenue from the prior period.

Platform subscription revenue increased 22% to $4.8 million compared to $4.0 million in the year-ago quarter. The increase was primarily due to an increase in the total number of paid Platform deployments and B2C subscribers, as well as upsells to existing customers. The quarter ended with annual recurring revenue of $20.4 million, up 23% year-over-year (see the Company's definition of annual recurring revenue below).

Transaction revenue was $7.8 million, compared to $8.2 million in the third quarter of fiscal 2024. The decrease was primarily due to lower paid order volume in the period. The transaction customer count for the quarter was 1,380, compared to 1,426 customers in the prior-year quarter (see the Company's definition of active customer accounts and transactions below).

Total gross margin improved 430 basis points from the prior-year quarter to 49.5%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platforms business as well as increased margins in that business and the transaction business.

Total operating expenses were $5.7 million, compared to $5.4 million in the third quarter of 2024. The increases were related to additional costs in Sales and Marketing, offset by some reductions in General and Administrative expenses. 

Net income for the third quarter was $216,000, or $0.01 per diluted share, compared to net income of $76,000, or nil per diluted share, in the prior-year quarter. Adjusted EBITDA was $1.4 million, compared to $961,000 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, May 8, 2025
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-203-518-9843
Conference ID: RESEARCH

The conference call will be broadcast live and available for replay until June 8, 2025 by dialing  1-412-317-6671 and using the replay ID 11158769, and via the investor relations section of the company's website at http://researchsolutions.investorroom.com/.

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

		Quarter Ended March 31,					Nine Months Ended March 31,
		2025	2024	Change	% Change		2025	2024	Change	% Change
Revenue:
	Platforms	$     4,839,929	$     3,953,403	$       886,526	22.4 %		$   13,770,831	$     9,679,179	$    4,091,652	42.3 %
	Transactions	$     7,821,434	$     8,162,269	(340,835)	-4.2 %		$   22,849,233	$   22,811,206	38,027	0.2 %
Total Revenue		12,661,363	12,115,672	545,691	4.5 %		36,620,064	32,490,385	4,129,679	12.7 %
Gross Profit:
	Platforms	4,229,623	3,382,051	847,572	25.1 %		11,993,516	8,239,028	3,754,488	45.6 %
	Transactions	2,037,457	2,099,881	(62,424)	-3.0 %		5,860,533	5,758,272	102,261	1.8 %
Total Gross Profit		6,267,080	5,481,932	785,148	14.3 %		17,854,049	13,997,300	3,856,749	27.6 %
Gross profit as a % of revenue:
	Platforms	87.4 %	85.5 %	1.8 %			87.1 %	85.1 %	2.0 %
	Transactions	26.0 %	25.7 %	0.3 %			25.6 %	25.2 %	0.4 %
Total Gross Profit		49.5 %	45.2 %	4.3 %			48.8 %	43.1 %	5.7 %
Operating Expenses:
	Sales and marketing	1,607,678	1,122,365	485,313	43.2 %		4,141,172	2,612,308	1,528,864	58.5 %
	Technology and product development	1,394,936	1,371,754	23,182	1.7 %		4,274,543	3,952,891	321,652	8.1 %
	General and administrative	1,845,411	2,027,074	(181,663)	-9.0 %		5,783,788	6,593,791	(810,002)	-12.3 %
	Depreciation and amortization	312,013	309,898	2,115	0.7 %		930,341	525,267	405,074	77.1 %
	Stock-based compensation	594,639	541,002	53,637	9.9 %		1,546,950	1,729,271	(182,321)	-10.5 %
	Foreign currency translation loss	(44,519)	22,177	(66,696)	NM		(119,205)	15,059	(134,264)	NM
Total Operating Expenses		5,710,158	5,394,270	315,888	5.9 %		16,557,589	15,428,587	1,129,003	7.3 %
Income (loss) from operations		556,922	87,663	469,259	535.3 %		1,296,460	(1,431,286)	2,727,746	NM
Other Income (Expenses):
	Other income	(327,042)	31,228	(358,270)	NM		(2,316,404)	547,965	(2,864,369)	NM
	Provision for income taxes	(13,410)	(42,590)	29,180	-68.5 %		(74,816)	(82,049)	7,233	-8.8 %
Total Other Income (Expenses):		(340,452)	(11,362)	(329,090)	NM		(2,391,220)	465,916	(2,857,136)	NM
Net income (loss)		$        216,470	$          76,301	140,169	183.7 %		$   (1,094,760)	$      (965,370)	(129,390)	-13.4 %
										NM
Adjusted EBITDA		$     1,419,055	$        960,740	$       458,315	47.7 %		$     3,654,546	$        838,311	$    2,816,235	335.9 %
		Quarter Ended March 31,					Nine Months Ended March 31,
		2025	2024	Change	% Change		2025	2024	Change	% Change
Platforms:
	B2B ARR (Annual recurring revenue*):
	Beginning of Period	$   12,738,256	$   11,614,748	$    1,123,508	9.7 %		$   12,060,201	$     9,444,130	$    2,616,071	27.7 %
	Incremental ARR	735,818	38,315	697,503	1820.4 %		1,413,873	2,208,933	(795,060)	-36.0 %
	End of Period	$   13,474,074	$   11,653,063	$    1,821,011	15.6 %		$   13,474,074	$   11,653,063	$    1,821,012	15.6 %
	Deployments:
	Beginning of Period	1,090	942	148	15.7 %		1,021	835	186	22.3 %
	Incremental Deployments	43	41	2	4.9 %		112	148	(36)	-24.3 %
	End of Period	1,133	983	150	15.3 %		1,133	983	150	15.3 %
	ASP (Average sales price):
	Beginning of Period	$          11,686	$          12,330	$             (643)	-5.2 %		$          11,812	$          11,310	$              502	4.4 %
	End of Period	$          11,892	$          11,855	$                38	0.3 %		$          11,892	$          11,855	$                38	0.3 %
	B2C ARR (Annual recurring revenue*):
	Beginning of Period	$     6,371,381	$     3,954,090	$    2,417,291	61.1 %		$     5,363,129	$                 -	$    5,363,129	NM
	Incremental ARR	506,545	948,885	(442,340)	NM		1,514,797	4,902,975	(3,388,178)	NM
	End of Period	$     6,877,926	$     4,902,975	$    1,974,951	40.3 %		$     6,877,926	$     4,902,975	$    1,974,951	40.3 %
	Total ARR (Annualized recurring revenue):	$   20,352,000	$   16,556,038	$    3,795,962	22.9 %		$   20,352,000	$   16,556,038	$    3,795,963	22.9 %
Transaction Customers:
	Corporate customers	1,060	1,105	(45)	-4.1 %		1,062	1,087	(25)	-2.3 %
	Academic customers	320	321	(1)	-0.3 %		323	320	3	1.0 %
	Total customers	1,380	1,426	(46)	-3.2 %		1,385	1,407	(22)	-1.5 %

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) including any change in fair value of contingent earnout liability, foreign currency transaction 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 March 31,					Nine Months Ended March 31,
	2025	2024	Change	% Change		2025	2024	Change	% Change
Net Income (loss)	$        216,470	$          76,301	$       140,169	183.7 %		$   (1,094,760)	$      (965,370)	$     (129,390)	-13.4 %
Add (deduct):								-
Other (income) expense	327,042	(31,228)	358,270	NM		2,316,404	(547,965)	2,864,369	NM
Foreign currency translation loss (gain)	(44,519)	22,177	(66,696)	NM		(119,205)	15,059	(134,264)	NM
Provision for income taxes	13,410	42,590	(29,180)	-68.5 %		74,816	82,049	(7,233)	-8.8 %
Depreciation and amortization	312,013	309,898	2,115	0.7 %		930,341	525,267	405,074	77.1 %
Stock-based compensation	594,639	541,002	53,637	9.9 %		1,546,950	1,729,271	(182,321)	-10.5 %
Adjusted EBITDA	$     1,419,055	$        960,740	$       458,315	47.7 %		$     3,654,546	$        838,311	$    2,816,235	335.9 %

About Research Solutions
Research Solutions, Inc. (NASDAQ: RSSS) provides cloud-based technologies to streamline the process of obtaining, managing, and creating intellectual property. Founded in 2006 as Reprints Desk, the Company was a pioneer in developing solutions to serve researchers. Today, more than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, the Company's SaaS research platform, to streamline access to the latest scientific research and data with 24/7 customer support. 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, 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)
		March 31,			June 30,
		2025			2024
Assets
Current assets:
Cash and cash equivalents		$	9,852,007		$	6,100,031
Accounts receivable, net of allowance of $82,026 and $68,579, respectively			7,604,058			6,879,800
Prepaid expenses and other current assets			625,727			643,553
Prepaid royalties			755,299			1,067,237
Total current assets			18,837,091			14,690,621
Non-current assets:
Property and equipment, net of accumulated depreciation of $944,694 and $922,558, respectively			60,051			88,011
Intangible assets, net of accumulated amortization of $2,431,738 and $1,535,310, respectively			9,956,378			10,764,261
Goodwill			16,372,979			16,315,888
Deposits and other assets			881			981
Total assets		$	45,227,380		$	41,859,762
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses		$	8,529,572		$	8,843,612
Deferred revenue			10,355,768			9,023,848
Contingent earnout liability, current portion			6,019,488			—
Total current liabilities			24,904,828			17,867,460
Non-current liabilities:
Contingent earnout liability, long-term portion			9,091,422			12,298,114
Total liabilities			33,996,250			30,165,574
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; 32,405,120 and 32,295,373 shares issued and outstanding, respectively			32,405			32,295
Additional paid-in capital			38,728,405			38,089,958
Accumulated deficit			(27,404,006)			(26,309,246)
Accumulated other comprehensive loss			(125,674)			(118,819)
Total stockholders' equity			11,231,130			11,694,188
Total liabilities and stockholders' equity		$	45,227,380		$	41,859,762

 

Research Solutions, Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
		Three Months Ended						Nine Months Ended
		March 31,						March 31,
		2025			2024			2025			2024
Revenue:
Platforms		$	4,839,929		$	3,953,403		$	13,770,831		$	9,679,179
Transactions			7,821,434			8,162,269			22,849,233			22,811,206
Total revenue			12,661,363			12,115,672			36,620,064			32,490,385
Cost of revenue:
Platforms			610,306			571,352			1,777,315			1,440,151
Transactions			5,783,977			6,062,388			16,988,700			17,052,934
Total cost of revenue			6,394,283			6,633,740			18,766,015			18,493,085
Gross profit			6,267,080			5,481,932			17,854,049			13,997,300
Operating expenses:
Selling, general and administrative			5,398,145			5,084,371			15,627,248			14,903,319
Depreciation and amortization			312,013			309,898			930,341			525,267
Total operating expenses			5,710,158			5,394,269			16,557,589			15,428,586
Income (loss) from operations			556,922			87,663			1,296,460			(1,431,286)
Other income			78,868			31,228			496,392			279,678
Change in fair value of contingent earnout liability			(405,910)			—			(2,812,796)			268,287
Income (loss) before provision for income taxes			229,880			118,891			(1,019,944)			(883,321)
Provision for income taxes			(13,410)			(42,590)			(74,816)			(82,049)
Net income (loss)			216,470			76,301			(1,094,760)			(965,370)
Other comprehensive income (loss):
Foreign currency translation			(3,324)			858			(6,855)			6,261
Comprehensive income (loss)		$	213,146		$	77,159		$	(1,101,615)		$	(959,109)
Basic income (loss) per common share:
Net income (loss) per share		$	0.01		$	-		$	(0.04)		$	(0.03)
Weighted average common shares outstanding			31,033,022			30,020,652			30,597,410			28,377,199
Diluted income (loss) per common share:
Net income (loss) per share		$	0.01		$	-		$	(0.04)		$	(0.03)
Weighted average common shares outstanding			32,139,935			33,511,242			30,597,410			28,377,199

 

Research Solutions, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)
		Nine Months Ended
		March 31,
		2025			2024
Cash flow from operating activities:
Net loss		$	(1,094,760)		$	(965,370)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			930,341			525,267
Stock options expense			146,751			104,502
Restricted common stock expense			1,400,199			1,603,820
Modification cost of accelerated vesting of restricted common stock			—			20,949
Adjustment to contingent earnout liability			2,812,796			(268,287)
Changes in operating assets and liabilities:
Accounts receivable			(754,258)			(739,883)
Prepaid expenses and other current assets			17,826			(156,026)
Prepaid royalties			311,938			197,888
Accounts payable and accrued expenses			(338,502)			498,584
Deferred revenue			1,331,920			768,347
Net cash provided by operating activities			4,764,251			1,589,791
Cash flow from investing activities:
Purchase of property and equipment			(11,571)			(57,761)
Payment for acquisition of Resolute, net of cash acquired			—			(2,718,253)
Payment for acquisition of Scite, net of cash acquired			—			(7,305,493)
Net cash used in investing activities			(11,571)			(10,081,507)
Cash flow from financing activities:
Common stock repurchase			(908,393)			(522,024)
Payment of contingent acquisition consideration			(91,174)			(314,960)
Net cash used in financing activities			(999,567)			(836,984)
Effect of exchange rate changes			(1,137)			4,791
Net increase (decrease) in cash and cash equivalents			3,751,976			(9,323,909)
Cash and cash equivalents, beginning of period			6,100,031			13,545,333
Cash and cash equivalents, end of period		$	9,852,007		$	4,221,424
Supplemental disclosures of cash flow information:
Cash paid for income taxes		$	74,816		$	82,049
Non-cash investing and financing activities:
Contingent consideration accrual on asset acquisition		$	29,394		$	36,130

View original content to download multimedia:https://www.prnewswire.com/news-releases/research-solutions-reports-fiscal-third-quarter-2025-results-302450491.html

SOURCE Research Solutions, Inc.

FAQ

What were Research Solutions' (RSSS) key financial results for Q3 2025?

In Q3 2025, Research Solutions reported revenue of $12.7 million (+4.5% YoY), net income of $216,000 ($0.01 per share), and Adjusted EBITDA of $1.4 million. Platform revenue grew 22% to $4.8 million, and ARR increased 23% to $20.4 million.

How much did Research Solutions' (RSSS) Annual Recurring Revenue grow in Q3 2025?

Research Solutions' ARR grew 23% year-over-year to $20.4 million, including $13.5 million in B2B recurring revenue and $6.9 million in B2C recurring revenue.

What was Research Solutions' (RSSS) platform deployment growth in Q3 2025?

Research Solutions added 43 net new platform deployments in Q3 2025, bringing the total to 1,133 deployments, a 15.3% increase from 983 in the prior year.

How much cash flow did Research Solutions (RSSS) generate in Q3 2025?

Research Solutions generated record quarterly cash flow from operations of $2.9 million in Q3 2025, compared to $2.0 million in the prior-year quarter.

What was Research Solutions' (RSSS) gross margin in Q3 2025?

Research Solutions' gross margin improved by 430 basis points year-over-year to 49.5%, driven by a revenue mix shift to higher-margin Platforms business.