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Press Releases


Research Solutions Reports Fiscal Second Quarter 2020 Financial Results

February 13, 2020

ENCINO, Calif. – February 13, 2020 – Research Solutions, Inc. (OTCQB: RSSS), a SaaS provider of workflow efficiency solutions for R&D-driven organizations, reported financial results for its fiscal second quarter 2020 ended December 31, 2019.

Fiscal Second Quarter 2020 Highlights vs. Year-Ago Quarter

  • Platform revenue up 42% to $950,000, with a 27% increase in total Platform deployments to 338. Annual recurring revenue up 38% to $3.7 million.
  • Transaction revenue increased 4% to $6.6 million compared to $6.3 million, with customer count up to 1,139 compared to 1,083.
  • Total gross margin up 180 basis points to 30.2%.
  • Net loss from continuing operations was $0.6 million, or $(0.03) per share, compared to a net loss of $0.6 million, or $(0.03) per share.

Management Commentary

“During the second quarter, we maintained our momentum with strong relative growth in both our Platform and Transaction businesses and continued consolidated gross margin expansion,” said Peter Derycz, president and CEO of Research Solutions. “With our sales and marketing teams remaining heavily focused on generating new enterprise clients, we made good progress optimizing and fine-tuning our prospecting activities to ensure we are getting in front of the small-to-medium-sized organizations driven by R&D. In addition, we continued to make improvements to the Platform’s user experience and interface, along with rolling out multiple updates to various gadgets throughout the quarter.

“As we look to the back half of fiscal 2020, we continue to expect our focus on the enterprise, along with introducing our unique capabilities to an expanded audience through various partnerships, to accelerate Platform revenue growth. Our ability to provide an innovative research platform that is consistently evolving to meet the needs of our customers combined with our retooled sales and marketing strategies gives us confidence that we will continue executing our growth strategy for the remainder of the year and beyond.”

Fiscal Second Quarter 2020 Financial Results

Total revenue increased 8% to $7.5 million compared to $7.0 million in the same year-ago quarter.

Platform subscription revenue increased 42% to $950,000 compared to $668,000 in the same year-ago quarter. The increase was primarily due to a 27% increase in the total number of paid Platform deployments from 267 to 338 and upselling current platform customers. The quarter ended with annual recurring revenue up 38% to $3.7 million (see the company's definition of annual recurring revenue below).

Transaction revenue increased 4% to $6.6 million compared to $6.3 million in the same year-ago quarter. Total active customers increased 6% from 1,071 to 1,139 and transaction count increased 5% from 203,000 to 213,000 (see the company's definition of active customer accounts and transactions below).

Total gross margin increased 180 basis points to 30.2% from 28.4% in the same year-ago quarter. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.

Total operating expenses were $3.0 million compared to $2.7 million in the same year-ago quarter. The increase was primarily due to continued investment in sales and marketing associated with expanding the Platform business.

Net loss from continuing operations was $0.6 million, or $(0.03) per share, compared to a net loss of $0.6 million, or $(0.03) per share, in the year-ago quarter. Adjusted EBITDA totaled $(184,000) compared to $(192,000) in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Cash and cash equivalents at December 31, 2019, amounted to $6.8 million compared to $5.4 million at June 30, 2019. There were no outstanding borrowings under the company’s $2.5 million revolving line of credit and the company had no long-term liabilities or other debt.

Further details about these results are available in the company’s annual report on Form 10-Q, which is available in the investor relations section of the company’s website at www.researchsolutions.com.

Conference Call

Research Solutions President and CEO Peter Derycz and CFO Alan Urban will host an investor conference call to discuss these results and the company’s outlook, followed by a question and answer period.

  • Date: Thursday, February 13, 2020
  • Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
  • Toll-free dial-in number: 1-855-327-6837
  • International dial-in number: 1-631-891-4304
  • Conference ID: 100008494

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.

The conference call will be broadcast live and available for replayhere and via the investor relations section of the company’s website at www.researchsolutions.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through March 5, 2020.

  • Toll-free replay number: 1-844-512-2921
  • International replay number: 1-412-317-6671
  • Replay ID: 10008494


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 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):


About Research Solutions

Research Solutions, Inc. (OTCQB: RSSS) provides workflow efficiency solutions for R&D-driven organizations in life sciences, technology and academia worldwide. Our Software-as-a-Service platform provides tools or “Gadgets” that allow users to discover, access, manage and collaborate around science, technology and medical (STM) content and data. Our customers range from 70 percent of the top 25 global pharmaceutical companies to emerging small and medium-sized businesses. We generate recurring revenue from subscriptions to our SaaS platform and transactional revenue from the sale of STM content. For more information, 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. 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.

Investor Relations:

Gateway Investor Relations
Cody Slach
Tel 1-949-574-3860

Media Contact:

Research Solutions, Inc. and Reprints Desk, Inc.
Leah Rodriguez
+1 (310) 477-0354




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