HENDERSON, Nev., Jan. 29, 2026 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, will hold a conference call to discuss its financial results for the second quarter fiscal 2026 ended December 31, 2025, on Thursday, February 12, 2026, at 5:00 p.m. ET. A press release containing the Company's financial results will be issued following the market close. Management will host the conference call, followed by a question-and-answer period. Research Solution ...

Group 1 - Research Solutions, Inc. announced the departure of its Chief Financial Officer, Bill Nurthen, effective December 10, 2025, to pursue another opportunity [1] - The Company has appointed Dave Kutil, its Controller since 2023, as the interim Chief Financial Officer and Secretary, bringing over 15 years of financial leadership experience [2] - The Chairman and CEO, Roy W. Olivier, expressed gratitude for Bill's contributions and confidence in Dave's ability to maintain continuity and production in his new role [3] Group 2 - Research Solutions, Inc. provides cloud-based technologies aimed at streamlining the process of obtaining, managing, and creating intellectual property [4] - The Company, founded in 2006, has developed the Article Galaxy SaaS research platform, which is utilized by over 70 percent of top pharmaceutical companies, prestigious universities, and emerging businesses [4] - The platform offers 24/7 customer support to facilitate access to the latest scientific research and data [4]

Core Insights - Long Cast Advisers reported a cumulative net return improvement of 4% in Q3 2025, with a total cumulative return of 266% net of fees since inception in November 2015, translating to a 14% CAGR [1] Company Overview - Research Solutions, Inc. (NASDAQ:RSSS) is highlighted as a key stock in Long Cast Advisers' Q3 2025 investor letter, offering a cloud-based software-as-a-service research platform [2] - As of November 28, 2025, Research Solutions, Inc. had a stock price of $3.06 per share and a market capitalization of $100.57 million [2] Financial Performance - Research Solutions, Inc. experienced a one-month return of -3.47% and a 52-week decline of 17.07% [2] Business Model and Risks - The company reported F1Q26 results, which is its seasonally slowest quarter, but is noted for its growth and cash generation, led by an experienced C-suite and a passionate product developer [3] - The business is involved in rights access to scientific literature, with a legacy of licensing libraries and providing services around it [3] - Potential risks include disintermediation from publishers selling directly, competition from AI platforms that pay for rights, and the impact of open access scientific research [3]

Core Viewpoint - Research Solutions Inc. (RSSS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that upward revisions can lead to increased buying pressure and higher stock prices [4][5]. - Research Solutions is projected to earn $0.14 per share for the fiscal year ending June 2026, with a year-over-year change of zero, but the Zacks Consensus Estimate has increased by 16.7% over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions, which positions Research Solutions favorably for potential market-beating returns [9][10].

Summary of Research Solutions (NasdaqCM:RSSS) FY Conference Call Company Overview - **Company**: Research Solutions, Inc. (RSSS) - **Industry**: Scientific research and document delivery - **Business Model**: Transitioning from a transactional model to a SaaS platform model focused on research and development (R&D) [2][9][20] Key Points and Arguments Business Transformation - The company is undergoing a significant transformation from providing peer-reviewed scientific research articles to offering a sophisticated SaaS product called Article Galaxy, which streamlines the research process for corporate clients [2][3][4] - Article Galaxy allows researchers to access scientific papers through a single search, enhancing efficiency and reducing costs [3][4] Product Offerings - **Article Galaxy**: A platform for accessing scientific research papers, now includes rental capabilities and rights management features [4][5] - **Scite**: An AI-powered discovery product acquired by the company, which enhances the research process by providing insights beyond paywalls [8][20] - **DocDel (Document Delivery)**: The transactional business segment, which is currently facing challenges due to customer churn [6][9][15] Financial Performance - The company reported a 20% organic growth in Annual Recurring Revenue (ARR), which is now over $21 million [16][19] - The platform business has a gross margin of approximately 85%, while the transactional business has a gross margin of 24-25% [13][16] - The overall corporate blended gross margin has improved from 40% to over 50% in the past two years [17] Market Opportunity - The Total Addressable Market (TAM) for the B2B segment is estimated at $4 billion, with significant growth potential in the B2C segment as well [12][21] - The company serves a diverse range of verticals, including pharmaceuticals, biotech, and academic institutions, with about half of its revenue coming from the healthcare sector [11][12][21] Customer Dynamics - The company has approximately 1,500 customers, with a typical customer lifetime value of 6-8 years [11][21][42] - Renewal rates are around 90%, with top-tier customers achieving renewal rates of 97-98% [41][42] - Challenges in the transactional business are attributed to customer churn and the increasing availability of open-access content [33][36] Strategic Focus - The company aims to be the "Bloomberg terminal" for research, providing comprehensive solutions across the research workflow [20] - There is an ongoing discussion about share buybacks as a strategy to enhance shareholder value, especially given the current trading multiples [23][24] AI Integration - AI is viewed as both a threat and an opportunity; the company is focused on integrating AI into its workflow to enhance its offerings while ensuring compliance with copyright regulations [27][28][29] Future Outlook - The company expects continued growth in its platform business, while the transactional business may remain flat due to market dynamics [10][15] - The management is optimistic about the long-term growth potential and is focused on executing its strategic plan [19][21] Additional Important Insights - The company has made two acquisitions in the past five years to enhance its discovery capabilities [7][20] - The management is implementing a new software tool to proactively manage customer relationships and reduce churn [43] - The competitive landscape is evolving, with many new entrants in the research AI space, but the company believes it has a unique position due to its access to comprehensive content [29][30]

Financial Performance - Total revenue for the three months ended September 30, 2025, increased by $267,703, or 2.2%, compared to the prior year, driven by an $791,195 increase in Platforms revenue [128]. - Platforms revenue reached $5,120,840, reflecting an 18.3% increase, while Transactions revenue decreased by $523,492, or 6.8%, totaling $7,191,345 [128]. - Gross profit for the three months ended September 30, 2025, was $6,225,298, an increase of $459,422, or 8.0%, with Platforms gross profit rising by 19.2% [132]. - Net income for the period was $749,387, representing an increase of $80,383, or 12.0%, attributed to higher gross profit despite increased operating expenses [134]. - Adjusted EBITDA for Q3 2025 reached $1,472,963, reflecting a $200,428 increase or 15.8% from $1,272,535 in Q3 2024 [144]. Revenue Sources - Revenue is derived from two main sources: annual licenses for accessing premium features of the SaaS platforms and transactional sales of STM content, reflecting a diversified revenue model [115]. - The company recognizes revenue from single article delivery services upon delivery to the customer, ensuring timely revenue recognition aligned with service fulfillment [117]. Cost Management - Total cost of revenue decreased by $191,719, or 3.1%, to $6,086,887, with the cost of Platforms increasing by 11.6% and Transactions decreasing by 4.4% [129]. - Operating expenses increased by $144,442, or 2.8%, totaling $5,263,627, primarily due to a 40.0% increase in sales and marketing expenses [133]. Cash Flow - Cash and cash equivalents at the end of the period were $11,955,763, a decrease of $271,549 from the previous quarter, primarily due to cash used in financing activities [136]. - Net cash provided by operating activities was $1,107,119, driven by net income and adjustments to contingent earnout liability [137]. - Net cash used in financing activities was $1,361,218, primarily for the payment of contingent acquisition consideration [141]. Tax and Other Expenses - Provision for income taxes decreased by $24,981, from $46,212 in Q3 2024 to $21,231 in Q3 2025, a decline of 54.1% [144]. - Stock-based compensation decreased by $205,507, from $417,989 in Q3 2024 to $212,482 in Q3 2025, a reduction of 49.2% [144]. - Other (income) expense increased significantly by $259,578, from $(68,525) in Q3 2024 to $191,053 in Q3 2025, marking a 378.8% change [144]. - Foreign currency transaction gain improved by $86,984, from $(104,240) in Q3 2024 to $(17,256) in Q3 2025, an increase of 83.4% [144]. - Depreciation and amortization slightly increased by $3,971, from $312,095 in Q3 2024 to $316,066 in Q3 2025, a change of 1.3% [144]. Operational Efficiency - The Platforms enable researchers to obtain articles generally in under an hour, often in seconds, showcasing the efficiency of the company's document delivery service [111]. - The company utilizes advanced AI models, including generative AI assistants, to enhance user experience and streamline research workflows across its Platforms [106]. - The company has arrangements with hundreds of content publishers, allowing for electronic access to a vast majority of articles, facilitating quick delivery to customers [111]. - The company’s Platforms include tools for managing rights and permissions for content reuse, ensuring compliance with copyright laws, particularly in AI applications [104]. - The Platforms are deployed as a single, multi-tenant system, allowing for scalability and rapid innovation, which contributes to a competitive advantage in the market [107]. Accounting and Compliance - The company’s financial statements are prepared in accordance with GAAP, requiring estimates and assumptions that may affect reported amounts of assets, liabilities, revenue, and expenses [112]. - The company does not have any off-balance sheet arrangements [145]. - Adjusted EBITDA is used by the company for internal budgets, forecasts, and strategic planning, but has limitations as an analytical tool [146]. - The company does not provide quantitative and qualitative disclosures about market risk as it is not required [148].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Research Solutions Inc. (RSSS) reported quarterly earnings of $0.03 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.02 per share a year ago [1] - The company posted revenues of $12.31 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.26% and up from $12.04 million year-over-year [2] - Research Solutions shares have declined approximately 26% since the beginning of the year, contrasting with the S&P 500's gain of 16.5% [3] Earnings Performance - The company had a surprise of +75% in the previous quarter, reporting earnings of $0.07 per share against an expected $0.04 [1] - Over the last four quarters, Research Solutions has surpassed consensus EPS estimates only once [1] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $12.43 million, and for the current fiscal year, it is $0.14 on revenues of $51.02 million [7] - The estimate revisions trend for Research Solutions was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Commercial Printing industry, to which Research Solutions belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Data and Key Metrics Changes - Total revenue for Q1 fiscal 2026 was $12.3 million, up from $12 million in Q1 fiscal 2025, representing a year-over-year increase of approximately 2.5% [4] - Annual recurring revenue (ARR) increased by 21% year-over-year to $21.3 million, with B2B ARR at approximately $14.8 million and B2C ARR at about $6.5 million [4][5] - Adjusted EBITDA for the quarter was $1.5 million, a 16% increase from $1.3 million in the prior year quarter, marking the second-best adjusted EBITDA performance in company history [9] - Net income for the quarter was $749,002 per diluted share, compared to $669,002 per diluted share in the prior year quarter [9] Business Line Data and Key Metrics Changes - Platform subscription revenue increased by 18% to $5.1 million, driven by a net increase in platform deployments and upsells [4] - Transaction revenue for the quarter was $7.2 million, down from $7.7 million in the prior year quarter, aligning with expectations of continued challenges in transaction growth [5][6] - The platform business recorded a gross margin of 88.1%, a 70 basis point increase compared to the prior year quarter, while transaction business gross margin decreased to 23.8% from 25.7% [8] Market Data and Key Metrics Changes - Total active customer count decreased to 1,326 from 1,390 in the same period a year ago [6] - B2B growth was particularly strong, with an increase of $561,000 for the quarter, up from $128,000 last year [5] Company Strategy and Development Direction - The company is focusing on becoming a comprehensive SaaS and AI solution for scientific research, with significant investments in B2B sales resources [3][12] - The introduction of AI rights offerings and partnerships with publishers is expected to enhance revenue opportunities and improve customer engagement [15][16] - The company aims to improve Site B2C net ARR growth and overall ARR growth through better sales execution and product improvements [19] Management's Comments on Operating Environment and Future Outlook - Management noted that the decline in transaction revenue was primarily driven by three customers, with expectations of stabilization in the second half of the fiscal year [12][51] - The company anticipates a less pronounced dip in adjusted EBITDA between Q1 and Q2 compared to the previous year, with a goal of outperformance in each remaining quarter of fiscal 2026 [11][19] Other Important Information - Cash flow from operations was $1.1 million, a 31% increase from $843,000 in Q1 fiscal 2025, indicating healthy operational cash flow [10] - The company is actively pursuing acquisitions, with a strong pipeline and ongoing discussions, although no immediate closures are expected by year-end [58] Q&A Session Summary Question: Can you discuss the attach rate on the AI rights add-on product? - Management indicated that the product is new, and they are currently gathering data on attach rates, with industry studies suggesting a potential uplift of about 50% in ARR from AI integrations [22][23][25] Question: What are the plans to increase the attach rate and reduce churn in B2C? - Management acknowledged the need for rigorous testing and optimization of the product to improve conversion rates and reduce churn, noting that churn has been improving overall [31][32] Question: Can you elaborate on the non-seasonal strengths in ARR for Q1? - Management attributed the strong ARR growth to upgraded sales teams and a disciplined sales process, with no pull-forwards affecting the results [40][41] Question: What is the outlook for the transaction segment in the second half? - Management expressed cautious optimism for stabilization in the transaction segment, with some growth in the academic business and new platform customers [51] Question: Any updates on the headless strategy? - Management confirmed ongoing product changes to support large customers with headless strategies, indicating a material part of the pipeline is focused on this area [56] Question: How is AI impacting internal operations? - Management noted that AI tools are significantly speeding up development processes and improving productivity, with plans to implement AI in support functions as well [44][48]

Revenue Performance - Annual Recurring Revenue (ARR) increased by 21% to $21.3 million, with B2B recurring revenue at approximately $14.8 million and B2C recurring revenue at $6.5 million[5]. - Total revenue reached $12.3 million, a 2% increase compared to the prior-year quarter, driven by an 18% rise in platform revenue to $5.1 million[6][5]. - Total revenue for the three months ended September 30, 2025, was $12,312,185, an increase of 2.2% compared to $12,044,482 for the same period in 2024[21]. Profitability - Net income for the quarter was $749,000, or $0.02 per diluted share, representing a 12% increase from $669,000 in the prior-year quarter[10][12]. - Adjusted EBITDA rose by 16% to $1.5 million, with a trailing twelve-month Adjusted EBITDA of $5.5 million, reflecting an 11.1% margin[5][10]. - Gross profit increased by 8% to $6.2 million, with total gross margin improving by 270 basis points to 50.6%[5][9]. - Gross profit for the same period was $6,225,298, representing a gross margin of approximately 50.5%[21]. - Net income for the three months ended September 30, 2025, was $749,387, compared to $669,004 for the same period in 2024, reflecting a year-over-year increase of 12%[21]. Cash Flow and Financial Health - Cash flow from operations grew by 31% to $1.1 million, with a trailing twelve-month cash flow from operations of $7.3 million[5]. - The company reported a net cash provided by operating activities of $1,107,119 for the three months ended September 30, 2025, compared to $843,119 for the same period in 2024[23]. - Cash and cash equivalents at the end of the period were $11,955,763, down from $12,227,312 at the end of the previous quarter[20]. - Total assets decreased to $45,509,620 from $46,120,674 in the previous quarter[20]. - Total liabilities decreased to $29,915,300 from $32,192,517 in the previous quarter, indicating improved financial health[20]. Customer Metrics - The company achieved its best organic Q1 performance in history, with net B2B ARR growth of $561,000, up over 300% from last year[5][4]. - The total active customer count decreased to 1,326 from 1,390 in the prior-year quarter, reflecting a 4.6% decline[12]. Operating Expenses - Operating expenses for the three months ended September 30, 2025, were $5,263,627, slightly higher than $5,119,185 for the same period in 2024[21]. Transaction Revenue - Transaction revenue was $7.2 million, a decrease from $7.7 million in the first quarter of fiscal 2025, attributed to lower per article fees[8]. Average Sales Price - The average sales price (ASP) reached near all-time high levels, ending the period at $12,454, a 5.2% increase from the beginning of the period[12]. Share Information - The weighted average common shares outstanding for diluted income per share was 32,070,121 for the three months ended September 30, 2025[21]. Acquisition Consideration - The company incurred a payment of $1,337,857 related to contingent acquisition consideration during the financing activities[23].