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Press Releases


Research Solutions Reports Fiscal First Quarter 2024 Results

November 13, 2023

Reports 16% Revenue Increase and ARR over $11.0 Million

HENDERSON, Nev., Nov. 9, 2023 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), a trusted partner providing cloud-based workflow solutions to accelerate research for R&D-driven organizations, reported financial results for its fiscal first quarter ended September 30, 2023.

Fiscal First Quarter 2024 Summary

  • Total revenue of $10.1 million, a 16% increase from the prior-year quarter.
  • Platform revenue up 29% to $2.6 million. Annual Recurring Revenue ("ARR") of over $11.0 million.
  • Gross profit up 20% from prior-year quarter. Total gross margin improved 150 basis points to 40.1%.
  • Loss of ($988,000) or ($0.04) per share, compared to net income of $215,000 or $0.01 per diluted share in the prior-year quarter. This quarter's loss includes $1.161M in expenses itemized as follows: $339,000 in costs associated with M&A activities, $542,000 in proxy-related expenses and $280,000 in separation costs related to the termination of the Executive Chairman.
  • Adjusted EBITDA of ($441,000) compared to $433,000 in the prior-year quarter. The Adjusted EBITDA result includes approximately $1.078M in costs related to the M&A activities, proxy-related expenses and separation expenses noted above. Without these costs, Adjusted EBITDA would have been approximately $637,000.
  • The company closed its acquisition of Resolute Innovation, Inc. ("ResoluteAI") on July 28, 2023. The numbers for the quarter are inclusive of approximately two months of activity from ResoluteAI.

"Our first quarter results reflect the continued growth across our platform and transaction offerings and our acquisition of ResoluteAI completed in late July, which helped push our ARR over $11 million," said Roy W. Olivier, President and CEO of Research Solutions. "We continue to experience softer growth in our platform products due to ongoing inflationary pressures and budgetary constraints, however, our profit performance remained strong when you exclude a number of unique items that impacted our first quarter.  Lasty, we continue to be active in the M&A market with additional potential transactions that we believe will help complete our product set and enhance our growth profile."  

Fiscal First Quarter 2024 Results

Total revenue was $10.1 million, a 16% increase from $8.7 million in the year-ago quarter as both platform and transaction revenue increased from the prior-year period.

Platform subscription revenue increased 29% to $2.6 million compared to $2.0 million in the year-ago quarter. The increase was primarily due to an increase in the total number of paid Platform deployments and the acquisition of ResoluteAI, as well as upsells to existing customers. When consolidating ARR from the ResoluteAI acquisition, the quarter ended with annual recurring revenue of $11.0 million, up 32% year-over-year (see the company's definition of annual recurring revenue below).

Transaction revenue was $7.5 million, compared to $6.7 million in the first quarter of fiscal 2023. The increase was primarily due to organic growth and higher transaction volumes related to contracts transferred from FIZ Karlsruhe effective on January 1, 2023. The transaction customer count for the quarter was 1,395, compared to 1,220 customers in the prior-year quarter (see the company's definition of active customer accounts and transactions below).

Total gross margin improved 150 basis points from the prior-year quarter to 40.1%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platforms business as well as increased margins in the transactions business.

Total operating expenses were $5.1 million, compared to $3.2 million in the first quarter of 2023. This quarter's results include $339,000 in expenses related to the Company's M&A activities, $542,000 in proxy-related expenses and $280,000 in separation costs related to the termination of the Executive Chairman.

Net loss in the first quarter was ($988,000), or ($0.04) per share, compared to net income of $215,000, or $0.01 per diluted share, in the prior-year quarter. Adjusted EBITDA was ($441,000), compared to $433,000 in the year-ago quarter.  The net loss result included the $1.161M of itemized operating costs noted above and the Adjusted EBITDA result is inclusive of approximately $1.078M of those costs (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, November 9, 2023
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-631-891-4304
Conference ID: 10022638

The conference call will be broadcast live and available for replay until December 9, 2023 by dialing  1-412-317-6671 and using the replay ID 10022638, and via the investor relations section of the company's website at http://researchsolutions.investorroom.com/.

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

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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.

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), foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, gain on sale of discontinued operations, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

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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 additional customers, potential acquisitions and the Company's prospects for growth, profitability, and cash flow. 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.

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SOURCE Research Solutions, Inc.

For further information: Steven Hooser or John Beisler, Three Part Advisors, (214) 872-2710, shooser@threepa.com; jbeisler@threepa.com.

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