Core Insights - Research Solutions has launched Scite MCP, a new platform that connects directly to leading AI tools, allowing researchers to access evidence-backed answers from over 250 million scientific articles [1] Company Overview - Research Solutions (NASDAQ: RSSS) is recognized as a leading provider of AI-powered scientific research tools, enhancing the research process for users [1] Product Features - Scite MCP enables researchers and developers to search scientific literature seamlessly while evaluating the trustworthiness of research findings [1]

User Base and Content Access - 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[111]. - The company’s Platforms enable researchers to access and manage content efficiently, with single article delivery typically completed in under an hour, often in seconds[113]. - The company has established arrangements with hundreds of content publishers, allowing for rapid electronic delivery of articles, which is a key competitive advantage[113]. - The Platforms facilitate rights and permissions for various reuse cases, including AI applications, ensuring compliance with copyright laws[106]. - The company utilizes advanced AI models, including generative AI assistants, to enhance user experience and streamline research workflows across its Platforms[108]. Revenue and Financial Performance - Revenue is derived from two main sources: annual licenses for accessing premium features and transactional sales of STM content, with revenue recognized upon delivery of articles[117][119]. - Research Solutions operates under a subscription model, with revenue recognized ratably over the term of the subscription agreement, typically one year[118]. - Total revenue for the three months ended December 31, 2025, decreased by $121,568, or 1.0%, compared to the prior year, primarily due to a $745,156 decrease in transaction revenue[131]. - Platforms revenue increased by $623,588, or 13.6%, for the three months ended December 31, 2025, driven by additional deployments and cross-sell revenue[131]. - Gross profit for the three months ended December 31, 2025, increased by $355,857, or 6.1%, with platforms gross profit rising by 15.6%[136]. - Total revenue for the six months ended December 31, 2025, increased by $146,135, or 0.6%, with platforms revenue up by 15.8%[130]. - Total cost of revenue decreased by $669,144, or 5.4%, for the six months ended December 31, 2025, contributing to improved profitability[134]. - The total gross profit margin for the six months ended December 31, 2025, improved to 51.5%, up from 48.4% in the prior year[136]. - Net income for the three months ended December 31, 2025, was $546,919, a significant improvement from a net loss of $1,980,234 in the prior year[129]. - Net income for the six months ended December 31, 2025, was $1,296,306, an increase of $2,607,536 or 198.9% compared to a net loss of $(1,311,230) in 2024[141]. Operating Expenses and Cash Flow - Operating expenses decreased by $290,646, or 5.1%, for the three months ended December 31, 2025, with significant reductions in general and administrative expenses by 19.3%[131]. - Operating expenses for the three months ended December 31, 2025, totaled $5,437,600, a decrease of $290,646 or 5.1% compared to the same period in 2024[138]. - Total operating expenses for the six months ended December 31, 2025, were $10,701,227, a decrease of $146,204 or 1.3% compared to $10,847,431 in 2024[139]. - Net cash provided by operating activities for the six months ended December 31, 2025, was $2,491,176, primarily driven by net income and adjustments to contingent earnout liability[145]. - Cash and cash equivalents at the end of the period on December 31, 2025, were $12,262,780, an increase of $35,468 from $12,227,312 at the beginning of the period[144]. - Net cash used in financing activities for the six months ended December 31, 2025, was $(2,436,443), mainly due to the payment of contingent acquisition consideration[148]. Strategic Focus and Adjustments - Sales and marketing expenses increased by $781,929, or 30.9%, for the six months ended December 31, 2025, indicating a strategic focus on growth initiatives[130]. - The change in fair value of contingent earnout liability improved significantly, resulting in a gain of $1,810,283 for the six months ended December 31, 2025[130]. - Adjusted EBITDA for the three months ended December 31, 2025, was $1,305,336, reflecting an increase of $342,380 or 35.6% from $962,956 in 2024[153]. - Stock-based compensation expense decreased by $320,873 or 60.1% for the three months ended December 31, 2025, compared to the same period in 2024[139]. - Foreign currency transaction loss increased by $6,558 or 22.2% for the three months ended December 31, 2025, compared to the same period in 2024[139]. Credit Management - As of December 31, 2025, the allowance for doubtful accounts was recorded at $79,869, a decrease from $182,234 as of June 30, 2025, indicating improved credit management[125]. - The company does not engage in currency hedging activities, which may expose it to fluctuations in exchange rates, particularly for operations in Mexico[126].

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Research Solutions Inc. (RSSS) came out with quarterly earnings of $0.03 per share, in line with the Zacks Consensus Estimate . This compares to a loss of $0.07 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this company would post earnings of $0.03 per share when it actually produced earnings of $0.03, delivering no surprise.Over the last four quarters, the company has surpassed consensus EPS estimates just once.Research Solutions, which belong ...

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]

Financial Performance - Annual Recurring Revenue (ARR) increased by 14% to $21.8 million, comprising approximately $15.3 million from B2B and $6.4 million from B2C[6] - Net income for the quarter was $547,000, or $0.02 per diluted share, compared to a net loss of $2.0 million, or ($0.07) per share in the prior year[11] - Adjusted EBITDA rose by 36% to $1.3 million, with a trailing twelve-month Adjusted EBITDA of $5.8 million, representing 11.8% of revenue[6] - Total revenue was $11.8 million, slightly down from $11.9 million in the prior year, with platform revenue growth offset by a decline in transaction revenue[5] - Gross profit increased by 6% to $6.2 million, with total gross margin improving by 350 basis points to 52.4%[6] - Adjusted EBITDA for the quarter was $1,305,337, a 35.6% increase from $962,956 in the previous year[18] - The company reported a net income of $546,920, a significant turnaround from a net loss of $(1,980,234) in the same quarter last year[18] - Total revenue for the three months ended December 31, 2025, was $11,792,651, a slight decrease of 1.0% compared to $11,914,219 for the same period in 2024[23] - Gross profit for the six months ended December 31, 2025, increased to $12,402,248, up 7.0% from $11,586,969 in 2024[23] - Net income for the six months ended December 31, 2025, was $1,296,306, compared to a net loss of $1,311,230 for the same period in 2024[25] Revenue Breakdown - Platform revenue grew by 14% to $5.2 million, accounting for 44% of total revenue, up from 39% in the prior-year quarter[6] - Transaction revenue decreased by 10.2% to $6.6 million, impacted by customer churn and volume declines from larger customers[8] - B2B Annual Recurring Revenue (ARR) increased to $15,318,954, a 20.3% growth compared to $12,738,256 in the previous year[14] - B2C ARR decreased to $6,441,416, reflecting a 1.1% increase from $6,371,381, with a significant decline in incremental ARR of -110.0%[14] - Total ARR reached $21,760,370, marking a 13.9% increase from $19,109,637[14] Customer Metrics - The number of corporate customers grew by 26.2% to 1,326, while total customers increased by 19.2% to 1,650[14] - Deployments at the end of the period totaled 1,232, reflecting a 13.0% increase from 1,090[14] - The company achieved forty-seven net new deployments in the quarter, reflecting strong momentum in B2B customer acquisition[6] Operating Expenses and Cash Flow - Total operating expenses decreased by 5.1% to $5.4 million, primarily due to reduced general and administrative expenses[10] - Operating expenses for the six months ended December 31, 2025, were $10,701,227, a decrease of 1.4% from $10,847,431 in 2024[23] - The company reported a cash flow from operating activities of $2,491,176 for the six months ended December 31, 2025, compared to $1,871,493 in 2024[25] Assets and Liabilities - Cash and cash equivalents at the end of the period were $12,262,780, an increase from $7,701,155 at the end of December 31, 2024[25] - Total assets decreased to $44,243,880 as of December 31, 2025, down from $46,120,674 as of June 30, 2025[22] - Total liabilities decreased to $27,015,281 as of December 31, 2025, compared to $32,192,517 as of June 30, 2025[22] Strategic Focus - The company continues to focus on long-term growth strategies, reinvesting in sales and marketing to accelerate growth while maintaining financial flexibility[4] - The company emphasizes its commitment to enhancing product offerings and expanding customer base as part of its growth strategy[20]

Core Insights - Research Solutions, Inc. reported a 14% increase in Annual Recurring Revenue (ARR) to $21.8 million, with a net income of $547,000 and a 36% year-over-year growth in Adjusted EBITDA for the fiscal second quarter of 2026 [1][2] Financial Performance - Total revenue for the second quarter was $11.8 million, slightly down from $11.9 million in the prior year, primarily due to a decline in transaction revenue [1] - Platform revenue increased by 14% to $5.2 million, accounting for 44% of total revenue compared to 39% in the prior-year quarter [1] - Gross profit rose by 6% to $6.2 million, with total gross margin improving by 350 basis points to 52.4% [1] - Net B2B ARR growth was $560,000, marking the best organic second quarter performance in the company's history [1] - Adjusted EBITDA reached $1.3 million, up 36% from the previous year, with a trailing twelve-month Adjusted EBITDA of $5.8 million, representing 11.8% of revenue [1] Customer Metrics - The company achieved 47 net new deployments in the quarter, reflecting strong momentum in B2B customer acquisition [1] - The total number of active transaction customers decreased to 1,321 from 1,384 in the prior-year quarter [1] Operating Expenses - Total operating expenses decreased to $5.4 million from $5.7 million in the prior-year quarter, driven by reduced general and administrative costs [1] - Sales and marketing expenses increased by 22.7% year-over-year, indicating a focus on growth initiatives [1] Market Position - Research Solutions is positioned as a leading AI-powered research workflow platform, serving academic institutions, life science companies, and research organizations globally [2] - The company combines AI tools with access to both open access and paywalled research, enhancing the efficiency of scientific literature management [2]

HENDERSON, Nev., Jan. 29, 2026 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, will hold a conference call to discuss its financial results for the second quarter fiscal 2026 ended December 31, 2025, on Thursday, February 12, 2026, at 5:00 p.m. ET. A press release containing the Company's financial results will be issued following the market close. Management will host the conference call, followed by a question-and-answer period. Research Solution ...