User Base and Platform Features - Research Solutions reported a significant increase in its user base, with over 200 million existing STM journal articles available for instant download and an addition of 2 to 4 million newly published STM articles each year [118]. - The company’s cloud-based SaaS platforms facilitate the electronic delivery of single articles, achieving delivery times generally under an hour, often in seconds, enhancing customer satisfaction [119]. - The company utilizes advanced AI models, including Generative AI, to enhance user experience and streamline research workflows, with plans to release several new platform solutions [115]. - The Platforms enable life science and research-intensive organizations to reduce research costs over time, driving down the ultimate cost per article [109]. - The Platforms are designed to be scalable and stable, providing a competitive advantage through rapid innovation [116]. - The company has established arrangements with hundreds of content publishers, allowing for the electronic delivery of articles and compliance with copyright laws [119]. Revenue and Financial Performance - Revenue is derived from two main sources: annual or monthly licenses for accessing premium features and transactional sales of STM content, with revenue recognized upon delivery of articles [123]. - Total revenue for the three months ended December 31, 2024, increased by $1,600,477, or 15.5%, compared to the prior year, reaching $11,914,219 [135]. - Platforms revenue grew by $1,475,673, or 47.2%, to $4,601,257 for the three months ended December 31, 2024, driven by additional deployments and the Scite acquisition [135]. - Gross profit for the three months ended December 31, 2024, increased by $1,337,291, or 29.8%, totaling $5,821,093 [141]. - Total revenue for the six months ended December 31, 2024, increased by $3,583,988, or 17.6%, reaching $23,958,701 [134]. - Platforms revenue for the six months ended December 31, 2024, increased by $3,205,126, or 56.0%, totaling $8,930,902 [134]. - Total gross profit for the six months ended December 31, 2024, was $11,586,969, an increase of $3,071,601, or 36.1% [141]. - Total cost of revenue as a percentage of revenue decreased from 58.2% to 51.6% for the six months ended December 31, 2024 [139]. Operating Expenses and Losses - Operating expenses rose by $824,447, or 16.8%, to $5,728,246 for the three months ended December 31, 2024, with sales and marketing expenses increasing by 66.9% [135]. - Net loss for the three months ended December 31, 2024, was $1,980,234, compared to a net loss of $53,628 in the prior year, representing a 3,592.5% increase in loss [135]. - Total operating expenses for the three months ended December 31, 2024, increased by $824,447, or 16.8%, compared to the same period in 2023, reaching $5,728,246 [142]. - Sales and marketing expenses rose by $538,160, or 66.9%, primarily due to increased personnel costs and marketing expenditures related to the Scite acquisition [144]. - Net loss for the three months ended December 31, 2024, was $(1,980,234), an increase of $1,926,606, or 3,592.5%, compared to the prior year, mainly due to charges related to the Scite acquisition [145]. - Adjusted EBITDA for the three months ended December 31, 2024, was $962,956, reflecting an increase of $644,487, or 202.4%, compared to the same period in 2023 [155]. Cash Flow and Financing - Cash and cash equivalents at the end of the period on December 31, 2024, were $7,701,155, an increase of $1,601,124 from $6,100,031 at the beginning of the period [148]. - Net cash provided by operating activities for the six months ended December 31, 2024, was $1,871,493, primarily due to adjustments related to contingent earnout liability [149]. - Net cash used in investing activities for the six months ended December 31, 2024, was $5,404, significantly lower than $10,079,509 in the same period of 2023, which included payments for acquisitions [151]. - Net cash used in financing activities for the six months ended December 31, 2024, was $267,838, compared to $346,943 in the same period of 2023 [152]. - The company entered into a $500,000 secured revolving line of credit with PNC Bank, which matures on April 15, 2025, with no outstanding borrowings as of December 31, 2024 [153]. Accounting and Impairment - Stock-based compensation is calculated using the Black-Scholes-Merton Option Pricing model, which could materially affect compensation expenses [129]. - The company follows ASC 606 for revenue recognition, ensuring that revenue reflects the transfer of goods or services to customers [122]. - Goodwill is tested for impairment annually, with no indicators of impairment for intangible assets reported for the period ended December 31, 2024 [127][128].
Research Solutions(RSSS) - 2025 Q2 - Quarterly Report