<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1054151198438221&amp;ev=PageView&amp;noscript=1">

It looks like your browser is incompatible with our website.

If you are currently using IE 11 or earlier, we recommend you update to the new Microsoft Edge or visit our site on another supported browser.


Press Releases


Research Solutions Reports Fiscal Second Quarter 2021 Results

February 18, 2021

Reports 35 Percent Year-over-Year Increase in Platform Annual Recurring Revenue to $5.0 Million

HENDERSON, Nev., Feb. 11, 2021 /PRNewswire/ — Research Solutions, Inc. (NASDAQ: RSSS), a pioneer in providing cloud-based workflow solutions for R&D driven organizations, reported financial results for its fiscal 2021 second quarter ended December 31, 2020.

Fiscal Second Quarter 2021 Summary Compared to Prior Year Quarter:

  • Platform revenue increased 29% to $1.2 million, Annual recurring revenue increased 35% to $5.0 million
  • Total gross margin improved 190 basis points to 32.1%
  • Total revenue decreased 1% to $7.4 million
  • Net loss of $(261,000), an improvement of $332,000; loss per share of $(0.01), a two-cent improvement
  • Adjusted EBITDA of $161,000, an improvement of $345,000

"I am pleased with the continued momentum within our Platforms business with 29 net deployments in the second quarter, and surpassing the $5 million mark for Annual Recurring Revenue, representing a 35% increase from the same quarter a year ago," said Peter Derycz, President and CEO of Research Solutions. "While our total transaction count is steadily increasing, the number of paid transactions is decreasing as we continue to transition away from new, large transaction customers in favor of higher margin SMB platform customers. This is, in part, why our transaction revenue decreased in the second quarter."

Fiscal Second Quarter 2021 Results

Total revenue decreased 1% to $7.4 million, compared to $7.5 million in the same year-ago quarter.

Platform subscription revenue increased 29% to approximately $1.2 million compared to $950,000 in the year-ago quarter. The increase was primarily due to an increase in the total number of paid Platform deployments, including 29 net deployments added in the quarter. The quarter ended with annual recurring revenue of $5.0 million, up 6% sequentially and 35% year-over-year (see the company's definition of annual recurring revenue below).

Transaction revenue decreased 5% to $6.2 million compared to $6.6 million in the prior-year quarter. Total transaction count, which consists of paid and unpaid transactions, increased 3.5% from the year-ago quarter to 220,000. The improvement was due to an increase in unpaid transactions, offset by a decrease in paid transactions. Customers that have purchased the Article Galaxy platform benefit from unpaid transactions (such as open access, direct publisher subscription and token content) as part of its offering, and the increase in unpaid transactions reflects customers' ever growing dependence on the platform.  As we continue to gain higher margin SMB platform customers, we expect unpaid transactions to continue to increase. There were 1,109 transaction customers in the quarter, compared to 1,139 customers in the second quarter of fiscal year 2020 (see the company's definition of active customer accounts and transactions below).

Total gross margin improved 190 basis points from the prior-year quarter to 32.1%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.

Total operating expenses were $2.7 million, a $330,000 decrease from the year-ago quarter.

Net loss in the second quarter was $(261,000), or a loss of $(0.01)  per share, compared to a net loss of ($592,000), or $(0.03) per share, in the prior-year quarter. Adjusted EBITDA was $161,000, a $345,000 improvement from the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Cash and cash equivalents on December 31, 2020, amounted to $10.2 million, similar to the prior quarter and an increase from $9.3 million as of June 30, 2020. 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.

Conference Call

Research Solutions President and CEO Peter Derycz and CFO Alan Urban will host the conference call, followed by a question and answer period.

Date: Thursday, February 11, 2021
Time: 5:00 p.m. ET (2:00 p.m. PT)
Toll-free dial-in number: 1-855-327-6837
International dial-in number: 1-631-891-4304
Conference ID: 10012898

The conference call will be broadcast live and available for replay until March 4, 2021, by dialing 1-844-512-2921 and using the replay ID 10012898, and via the investor relations section of the company's website at researchsolutions.investorroom.com.


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 and Reprints Desk

Research Solutions, Inc. (NASDAQ: RSSS) is a pioneer in providing seamless access and simplifies how organizations and individual researchers discover, acquire, and manage scholarly journal articles, book chapters and other content in scientific, technical, and medical (STM) research. More than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, a cloud-based SaaS research platform, for simplified and lowest cost access to the latest scientific research and data. Featuring an ecosystem of app-like Gadgets for a personalized research experience, Article Galaxy offers individual as well as enterprise plans, coupled with unparalleled, 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 continued momentum in the Company's business and financial performance, and the Company's strong outlook. 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.




SOURCE Research Solutions, Inc.

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

Ready to See
Article Galaxy in Action?

Schedule a call with one of our advisors. We will get you
started with a FREE 14-day trial, with no obligation.