HENDERSON, Nev., Dec. 11, 2025 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, announced that its Chief Financial Officer and Secretary, Bill Nurthen,  left the Company effective December 10, 2025 to pursue another opportunity. The Company has named its Controller, Dave Kutil, as interim Chief Financial Officer and Secretary. Mr. Kutil has served as Controller since joining the Company in 2023 and has more than 15 years of financial leadership exp ...

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].

Core Insights - Research Solutions, Inc. reported a 21% year-over-year increase in Annual Recurring Revenue (ARR) to $21.3 million, driven by strong growth in both B2B and B2C segments [5][8] - The company achieved total revenue of $12.3 million for the fiscal first quarter, a 2% increase compared to the prior-year quarter, with platform subscription revenue rising 18% to $5.1 million [4][8] - Net income for the quarter was $749,000, reflecting a 12% increase from $669,000 in the previous year, while Adjusted EBITDA rose 16% to $1.5 million [9][8] Financial Performance - Total revenue reached $12.3 million, up from $12.0 million in the same quarter last year, primarily due to increased platform revenue [4] - Platform subscription revenue was $5.1 million, an 18% increase year-over-year, attributed to organic growth in both B2C and B2B platforms [5] - Transaction revenue decreased to $7.2 million from $7.7 million, due to lower per article fees on paid orders [6] Profitability Metrics - Gross profit increased by 8% to $6.2 million, with total gross margin improving by 270 basis points to 50.6% [7][8] - Operating expenses rose to $5.3 million from $5.1 million, mainly due to higher sales and marketing expenses [7] - Adjusted EBITDA for the quarter was $1.5 million, compared to $1.3 million in the prior-year quarter, representing an 11.1% margin on a trailing twelve-month basis [9][8] Customer Metrics - The company ended the quarter with 1,326 active customers, a decrease from 1,390 in the prior-year quarter [6][12] - B2B ARR growth was $561,000, marking over 300% growth from the previous year, while B2C ARR decreased slightly [8][12] - The Average Sales Price (ASP) reached near all-time high levels, indicating strong demand for the company's offerings [3] Strategic Initiatives - The company is focused on enhancing its SaaS and AI solutions, with significant deals contributing to its growth, including the largest Scite AI deal to date [3] - Continued investment in sales and marketing is expected to drive further growth and improve execution [3]