Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal 2026 was $11.8 million, a slight decrease from $11.9 million in Q2 fiscal 2025 [7] - Platform subscription revenue increased by approximately 14% to $5.2 million, driven by a net increase of 47 platform deployments [7] - Annual recurring revenue (ARR) reached $21.8 million, up 14% year-over-year, with B2B ARR at approximately $15.3 million and B2C ARR at about $6.4 million [7][8] - Gross profit for the quarter was $6.2 million, a 6% increase from the prior year, with a gross margin of 52.4%, reflecting a 350 basis point improvement [9] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2 million in the prior year [11] Business Line Data and Key Metrics Changes - The B2B segment saw strong results with 47 net new deployments, indicating customer excitement about product development [5] - B2C ARR experienced softness due to a pullback in marketing channels, impacting trial-to-subscriber conversion rates [8] - Transaction revenue for Q2 was $6.6 million, down from $7.3 million in the prior year, primarily due to churned accounts and volume reductions from larger customers [8] Market Data and Key Metrics Changes - The company noted increased competition in the B2C segment, which is expected to continue as digital marketing spend becomes more competitive [4] - The total active customer count decreased to 1,321 from 1,384 year-over-year [8] Company Strategy and Development Direction - The company is focusing on B2B annual and multiyear agreements as the primary growth driver, while also making product and sales process improvements [5] - A strategic shift is underway from a document delivery model to an "answers and access" platform, integrating API and AI capabilities [20][25] - The company aims to leverage its unique capabilities in data and rights management to support AI tools and enhance research efficiency [17][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the fiscal year, expecting stronger B2B and transaction performance compared to the first half [16] - The company is focused on maintaining balance sheet flexibility to fund high-return growth initiatives while managing operating expenses [15] - Management acknowledged the potential disruption from AI but believes their unique data capabilities will insulate them from direct competition [16][30] Other Important Information - Cash and cash equivalents as of December 31, 2025, were $12.3 million, reflecting disciplined working capital management [12] - The company has no outstanding borrowings on its revolving line of credit, providing additional balance sheet flexibility [13] Q&A Session Summary Question: Can you discuss the pipeline for B2B deals, particularly related to the API model? - Management noted consistent growth in the pipeline, with many deals now being API integrations, leading to larger contracts [32] Question: What are the trends in B2C business growth? - Management indicated uncertainty about B2C growth, citing increased competition and lower conversion rates from trials to subscribers [33][34] Question: What are the top priorities for improvement? - Key focuses include operating expense management, understanding churn causes, and enhancing working capital management [39] Question: How is AI being utilized internally to improve efficiency? - AI is being leveraged for software development and productivity improvements, with ongoing training for staff [45][51] Question: What is the market opportunity for the infrastructure model? - Management believes the ASP could increase by 20%-30%, with new pricing models being explored for API usage [55] Question: How is the relationship with smaller publishers evolving? - There is a growing interest from smaller publishers in AI rights and collaboration, which could strengthen the company's position [77][80]

Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal 2026 was $11.8 million, a slight decrease from $11.9 million in Q2 fiscal 2025 [7] - Platform subscription revenue increased by approximately 14% to $5.2 million, driven by a net increase of 47 platform deployments [7] - Annual recurring revenue (ARR) reached $21.8 million, up 14% year-over-year, with B2B ARR at approximately $15.3 million and B2C ARR at about $6.4 million [7][8] - Gross profit for the quarter was $6.2 million, a 6% increase from the prior year, with a gross margin of 52.4%, reflecting a 350 basis point improvement [9] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2 million in the prior year [11] Business Line Data and Key Metrics Changes - The B2B segment saw strong results in ARR bookings and net ARR bookings, with 47 net new deployments [5] - Transaction revenue for Q2 was $6.6 million, down from $7.3 million in the prior year, primarily due to churned accounts and volume reductions from larger customers [8] - The platform business recorded a gross margin of 88.1%, a 160 basis point increase compared to the prior year [10] Market Data and Key Metrics Changes - The total active customer count decreased to 1,321 from 1,384 year-over-year [8] - The company experienced increased competition in the B2C segment, impacting growth and conversion rates [4][8] Company Strategy and Development Direction - The company is focusing on B2B annual and multiyear agreements as the primary growth driver, while also making product and sales process improvements [5] - There is a strategic shift towards API and AI integration, evolving from a document delivery company to an answers and access platform [20][25] - The company aims to leverage its unique capabilities in data and rights management to support AI tools and enhance research efficiency [17][30] Management's Comments on Operating Environment and Future Outlook - Management expects continued pressure in B2C and transaction segments but anticipates stronger performance in B2B and overall profitability in the second half of the fiscal year [14][16] - The company is optimistic about its ability to grow cash balances while funding obligations from operating cash flow [12][14] - Management acknowledges the potential disruption from AI but believes their unique data capabilities will provide a competitive advantage [16][30] Other Important Information - The company has no outstanding borrowings on its revolving line of credit, providing additional balance sheet flexibility [13] - Cash flow from operations was $1.4 million, a 35% increase from the previous year, reflecting higher profitability and disciplined working capital management [12] Q&A Session Summary Question: Can you discuss the pipeline for B2B deals? - The pipeline has grown consistently, with many deals now being API integrations with larger customers, resulting in larger contracts [32] Question: What are the trends in B2C business? - There is increased competition in digital marketing, leading to lower conversion rates from trials to subscribers [33][34] Question: What are the top priorities for improvement? - Focus areas include operating expense management, understanding churn causes, and working capital management [38] Question: How is AI being utilized internally? - AI is being leveraged for software development and productivity improvements, enhancing efficiency across teams [44][50] Question: What is the market opportunity for infrastructure sales? - The ASP for infrastructure sales could be 20%-30% higher, with new pricing models being explored [53] Question: How is the relationship with smaller publishers developing? - There is a growing interest from smaller publishers in rights deals, with ongoing discussions to enhance collaboration [76][78]

Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal 2026 was $11.8 million, a slight decrease from $11.9 million in Q2 fiscal 2025 [6] - Platform subscription revenue increased by approximately 14% to $5.2 million, driven by a net increase of 47 platform deployments [6][7] - Annual recurring revenue (ARR) reached $21.8 million, up 14% year-over-year, with B2B ARR at approximately $15.3 million and B2C ARR at about $6.4 million [7] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2 million in the prior year [11] - Adjusted EBITDA for the quarter was $1.3 million, a 36% increase from the year-ago quarter [11] Business Line Data and Key Metrics Changes - The B2B segment saw strong results in both ARR bookings and net ARR bookings, with 47 net new deployments [4] - Transaction revenue for Q2 was $6.6 million, down from $7.3 million in the prior year, primarily due to churned accounts and volume reductions from larger customers [8] - Gross profit for the quarter was $6.2 million, up 6% year-over-year, with a gross margin of 52.4%, reflecting a 350 basis point improvement [9][10] Market Data and Key Metrics Changes - The total active customer count decreased to 1,321 from 1,384 in the same period a year ago [8] - The company experienced increased competition in the B2C segment, impacting results and expected to continue in the second half of the year [3] Company Strategy and Development Direction - The company is focusing on B2B annual and multiyear agreements as the primary growth driver, while also making product and sales process improvements [4] - A strategic shift is underway from a document delivery model to an "answers and access" platform, integrating API and AI technologies [18][24] - The company aims to leverage its unique capabilities in data and rights management to support AI tools and enhance research efficiency [16][20] Management's Comments on Operating Environment and Future Outlook - Management expects continued pressure in B2C and transaction segments but anticipates stronger performance in the B2B segment in the second half of the fiscal year [3][14] - The company is optimistic about its ability to grow cash balances while funding obligations from operating cash flow [12] - Management believes that the transition to an AI-driven environment presents opportunities for growth and innovation [27] Other Important Information - The company is maintaining balance sheet flexibility to fund high-return growth initiatives while managing operating expenses [10][14] - The company has seen a reduction in churn year-over-year, which is a positive trend moving into the third quarter [32] Q&A Session Summary Question: Can you discuss the pipeline for B2B deals? - The pipeline has grown consistently, with many deals now being API integrations, leading to larger contracts [29] Question: What are the trends in the B2C business? - The company is facing increased competition in digital marketing, leading to lower conversion rates from trials to subscribers [30] Question: What are the top three areas for improvement? - Focus areas include operating expense management, understanding churn causes, and working capital management [35] Question: How is AI being adopted internally? - AI is being leveraged for software development and improving productivity across teams [41][47] Question: What is the market opportunity for the API business? - The ASP for API deals could be 20%-30% higher, with new pricing models being explored [50] Question: How is the relationship with smaller publishers developing? - The company is actively engaging with smaller publishers to offer rights deals and enhance collaboration [74]

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]

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 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]

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]

Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 was approximately $49.1 million, a 10% increase from fiscal year 2024 [17] - Platform subscription revenue increased 36% to roughly $19 million [17] - Annual recurring revenue (ARR) reached $20.9 million, up 20% year over year [11] - Net income for the quarter was $2.4 million or $0.07 per diluted share, compared to a net loss of $2.8 million or $0.09 per diluted share in the prior year quarter [16] - Adjusted EBITDA for the year was $5.3 million, a company record compared to $2.2 million in fiscal year 2024 [19] Business Line Data and Key Metrics Changes - Platform subscription revenue accounted for over 40% of total revenue in the quarter, increasing from 35% in the prior year quarter [11] - Transaction revenue for fiscal year 2025 was $30.1 million, a 2% decrease from the prior year [17] - The company added 38 net new platform deployments in the last quarter, with balanced growth between new sales and upsells [12] Market Data and Key Metrics Changes - The company experienced a modest sequential decline in B2C ARR due to seasonal challenges [12] - The total active customer count for the quarter was 1,338, down from 1,398 in the same period a year ago [13] - The company noted competitive pressures in the B2C space that may affect near-term growth [24] Company Strategy and Development Direction - The company aims to reach a $30 million platform ARR target by the end of fiscal year 2027, focusing on product development and unique value delivery [5] - A shift from a transaction-based model to a vertical SaaS model is underway, with an emphasis on AI-driven solutions [8] - The company is pursuing a headless strategy, allowing customers to integrate services into their own systems and workflows [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in B2B ARR growth and expects continued strong performance [23] - There are expectations for transaction revenue growth to remain challenging in fiscal year 2026, but a potential flattening of declines is anticipated [24] - The company plans to continue investing in sales and marketing as well as technology and product development while aiming to reduce overall general and administrative expenses [24] Other Important Information - The company generated over $7 million in cash flow from operations in fiscal year 2025, almost double the previous year's result [23] - The final earn-out for the SITE acquisition was determined to be $15.4 million, with payments structured to be 62% in cash [20] Q&A Session Summary Question: Can you touch on the sequential uptick in ASP? - Management noted that larger deals have been secured due to the onboarding of a new Chief Revenue Officer and improved sales training [42] Question: How is the Resolute software adapting to the new strategy? - Management indicated that Resolute's strong API aligns well with the headless strategy, allowing for better integration into customer workflows [44] Question: What are the trends regarding COGS on the platform side? - Management explained that cost optimization efforts, including prepayments for hosting services, have contributed to lower COGS despite revenue growth [52] Question: Can AI-related deals continue to grow at the current pace? - Management expects continued strong results in the B2B space but anticipates slower growth in the B2C space due to increased competition [55] Question: What is driving the strength in deals above $100,000? - The new sales process and pricing strategy have led to larger deals, with a focus on understanding customer pain points and delivering value [58] Question: Can you elaborate on the partnership with LibKey? - Management described the partnership as an opportunity to expand the academic business by facilitating access to scientific articles through link resolver technology [64] Question: What is the current penetration of Article Galaxy customers also using SITE? - Management indicated that penetration remains low to mid-single digits, with most SITE sales going to new customers [68] Question: How do you expect margins to expand in fiscal year 2026? - Management anticipates crossing the 10% EBITDA margin threshold while continuing to invest in growth [70]

Financial Data and Key Metrics Changes - Total revenue for Q4 FY 2025 was $12.4 million, up from $12.1 million in Q4 FY 2024, marking a strong quarter for the business [9] - Annual recurring revenue (ARR) reached $21 million, growing 20% year-over-year [4] - Gross margin for Q4 was 51%, a 450 basis point improvement over the previous year, marking the first time gross margin exceeded 50% [12] - Net income for Q4 was $2.4 million, compared to a net loss of $2.8 million in the prior year [15] - For the full fiscal year 2025, total revenue was approximately $49.1 million, a 10% increase from fiscal 2024 [16] Business Line Data and Key Metrics Changes - Platform subscription revenue increased 21% year-over-year to approximately $5.2 million in Q4 [10] - B2B ARR grew significantly, with net B2B ARR growth of $724,000 in Q4, compared to $407,000 in the prior year [10] - Transaction revenue for Q4 was approximately $7.3 million, down from $7.9 million in the prior year [11] - Total deployments ended the year at 1,171, up 150 for the year [16] Market Data and Key Metrics Changes - The company experienced a modest sequential decline in B2C ARR, attributed to seasonal challenges [11] - The total active customer count for Q4 was 1,338, down from 1,398 in the same period a year ago [12] - The company noted competitive pressures in the B2C space affecting near-term growth, but remains optimistic about long-term prospects [22] Company Strategy and Development Direction - The company aims to reach a $30 million platform ARR target by the end of FY 2027, focusing on product development and unique value delivery [4] - A shift from a transaction-based model to a vertical SaaS model is underway, with an emphasis on AI's impact on research workflows [7] - The company is pursuing a headless strategy, allowing customers to integrate services into their own systems and workflows [30] - New AI-based products are growing at nearly 4X the pace of legacy products, indicating a strong future focus on AI [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of B2B ARR growth and the potential for a return to low levels of growth in transaction revenue [22] - The company plans to continue investing in sales and marketing while aiming to reduce general and administrative expenses [23] - Management expects to maintain adjusted EBITDA margins above 10% and gross margins above 50% in FY 2026 [66] Other Important Information - The final earnout for the Scite acquisition was determined to be $15.4 million, with a cash mix increased to approximately 62% [18] - Cash flow from operations in FY 2025 was over $7 million, nearly double the previous year's result [20] - The company ended FY 2025 with a cash balance of $12.2 million, with no outstanding borrowings [21] Q&A Session Summary Question: Sequential uptick in ASP drivers - Management noted larger deals and improved sales execution as key drivers for the increase in average selling price [38] Question: Resolute software adaptation to new strategy - The company is focusing on leveraging Resolute's strong API capabilities within the headless strategy, enhancing its value proposition [40] Question: Competitive environment for API strategy - Management highlighted that while some publishers are exploring similar strategies, the company is uniquely positioned due to its extensive partnerships with various publishers [43] Question: Trends in COGS and platform optimization - Management indicated that cost stabilization and prepayment strategies have contributed to lower COGS despite revenue growth [47] Question: AI-related deals growth sustainability - Management expects continued strong growth in B2B AI-related deals, while B2C growth may moderate due to increased competition [50] Question: Strength in deals above $100,000 - The new sales process and pricing strategy have enabled the company to secure larger deals, with a focus on understanding customer pain points [52]

Financial Data and Key Metrics Changes - Total revenue for Q4 FY 2025 was $12.4 million, up from $12.1 million in Q4 FY 2024, marking a strong quarter for the business [9] - Annual recurring revenue (ARR) reached $21 million, growing 20% year-over-year [4][10] - Gross margin for Q4 was 51%, a 450 basis point improvement year-over-year, marking the first time blended gross margin exceeded 50% [12] - Net income for Q4 was $2.4 million or $0.07 per diluted share, compared to a net loss of $2.8 million or $0.09 per diluted share in the prior year [15] - For the full fiscal year 2025, total revenue was approximately $49.1 million, a 10% increase from fiscal 2024 [16] Business Line Data and Key Metrics Changes - Platform subscription revenue increased 21% year-over-year to approximately $5.2 million in Q4 [10] - B2B ARR grew significantly, with net B2B ARR growth of $724,000 in Q4, compared to $407,000 in the prior year quarter [10] - Transaction revenue for Q4 was approximately $7.3 million, down from $7.9 million in the prior year quarter [11] - Total deployments ended the year at 1,171, up 150 for the year [16] Market Data and Key Metrics Changes - The total active customer count for Q4 was 1,338, down from 1,398 in the same period a year ago [12] - The company experienced a modest sequential decline in B2C ARR, attributed to seasonal challenges [11] Company Strategy and Development Direction - The company aims to reach a $30 million platform ARR target by the end of FY 2027, focusing on product development and AI integration [4] - A shift from a transaction-based model to a vertical SaaS model is underway, with an emphasis on AI's impact on research workflows [7] - The company is pursuing a headless strategy, allowing customers to integrate services into their own systems and workflows [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about B2B ARR growth momentum, despite competitive pressures in the B2C space [22] - Transaction revenue growth is expected to remain challenging in the first half of FY 2026, with hopes for stabilization or low growth in the latter half [22] - The company plans to continue investing in sales and marketing while reducing general and administrative expenses [23] Other Important Information - The final earnout for the Scite acquisition was determined to be $15.4 million, with a cash mix increased to approximately 62% [18] - Cash flow from operations for FY 2025 was over $7 million, nearly double the previous year's result [20] - The company ended FY 2025 with a cash balance of $12.2 million, with no outstanding borrowings [21] Q&A Session Summary Question: Can you discuss the sequential uptick in ASP? - Management noted that larger deals have been secured due to the onboarding of a new Chief Revenue Officer and improved sales training [38] Question: How is the Resolute software adapting to the new API strategy? - The company indicated that Resolute's strong API capabilities align well with the headless strategy, allowing for better integration into customer workflows [40] Question: What is the competitive landscape for the headless strategy? - Management highlighted that while some publishers are opening up their articles to LLM providers, the company is uniquely positioned to work with a wide range of publishers [43] Question: Can you elaborate on the strength in deals above $100,000? - The new sales process and pricing strategies have led to larger deals, with a focus on understanding customer pain points and delivering value [52] Question: What are the expectations for margin expansion in FY 2026? - Management anticipates EBITDA margins to remain above 10%, with potential for growth while continuing to invest in sales and marketing [66]