Company Overview
Research Solutions, Inc. (RSSS) is a pioneering software-as-a-service (SaaS) and artificial intelligence (AI) company that has established itself as a leader in streamlining the research process for organizations across various industries. With its innovative suite of platforms and AI-powered solutions, the company has been at the forefront of transforming how researchers and knowledge workers access, manage, and derive insights from scientific, technical, and medical (STM) content.
Founded in 2006 and headquartered in Henderson, Nevada, Research Solutions has a rich history of adapting to the changing needs of its customers. Initially focused on providing single-article delivery services, the company has since evolved into a comprehensive research intelligence platform, leveraging cutting-edge technologies to enhance the research workflow.
History and Development
Research Solutions was incorporated in the State of Nevada on November 2, 2006, with the goal of simplifying the research process for research-intensive organizations through the development of innovative software platforms. As of December 31, 2024, the company operates as a publicly traded holding company with five wholly owned subsidiaries.
In its early years, Research Solutions established its core Platforms, which provide cloud-based SaaS solutions to corporate, academic, government, and individual researchers. These Platforms cover key areas of the research workflow, including advanced search and discovery tools (Discovery Tools), content access and delivery (Access), and research workflow management (Manage). This focus on developing comprehensive solutions to address the needs of the research community has been a key driver of the company's growth over time.
Despite its growth, Research Solutions faced some challenges in the early 2020s, struggling with high customer churn and difficulties in driving consistent upsells within its existing customer base. To address these issues, the company reorganized its sales team, investing in specialized corporate and academic sales forces, and worked to improve customer experience and retention. These efforts helped stabilize the business and paved the way for the company's more recent successes.
Strategic Acquisitions
In 2023, Research Solutions made two strategic acquisitions that have significantly bolstered its capabilities. The first was the acquisition of ResoluteAI, a Delaware-based company that specializes in advanced search and discovery tools powered by AI and natural language processing (NLP) technologies. This integration has strengthened Research Solutions' ability to equip organizations with enhanced search, knowledge management, and analytics capabilities.
The second acquisition was that of Scite, a Delaware-based platform that utilizes AI models to create unique "Smart Citations" for scientific articles. This innovative technology provides researchers with valuable context and insights, enabling them to better evaluate the quality and significance of the research they are reviewing. The addition of Scite has further solidified Research Solutions' position as a leader in AI-driven research intelligence.
Business Segments
Research Solutions operates through two primary revenue segments: Platforms and Transactions.
The Platforms segment consists of cloud-based SaaS research intelligence platforms, typically sold to corporate, academic, government, and individual researchers through annual or multi-year subscription agreements. These platforms offer premium features such as advanced search tools, content access and management capabilities, and AI-powered research assistants.
For the six months ended December 31, 2024, the Platforms segment generated revenue of $8.93 million, a 56% increase compared to the prior year period. This growth was driven by additional deployments to new and existing customers, expansion of existing customer relationships, and additional revenue from the Scite acquisition. The gross profit margin for the Platforms segment improved to 86.9%, up from 84.8% in the prior year, primarily due to lower personnel costs and slightly higher hosting costs.
The Transactions segment facilitates the sale of published STM content to researchers and knowledge workers. Customers can purchase individual journal articles, book chapters, and other STM content either as standalone transactions or through the company's research platform solutions. Research Solutions earns both a transactional service fee for electronic content delivery and a corresponding copyright fee for permitted use of the content.
For the six months ended December 31, 2024, the Transactions segment generated revenue of $15.03 million, a 2.6% increase compared to the prior year period. This growth was primarily due to organic growth in copyright revenues. The gross profit margin for the Transactions segment improved slightly to 25.4% from 25.0% in the prior year, due to higher copyright margins.
Financials
As of the company's latest reported financial results for the fiscal year ended June 30, 2024, Research Solutions generated total revenue of $44.62 million, representing an 18% increase from the previous fiscal year. The company's annual recurring revenue (ARR), a key metric that provides visibility into the sustainability of its business, reached $17.4 million, an 84% year-over-year increase.
Gross margin for the fiscal year 2024 was 44.0%, reflecting the higher-margin nature of the company's platform offerings. This improvement in profitability was driven by the continued shift in the revenue mix towards the company's software platforms, which accounted for 35% of total revenue, up from 23% in the prior year.
For the most recent quarter (Q2 2025), Research Solutions reported revenue of $11.91 million, representing a 15.5% year-over-year increase. This growth was primarily driven by a 47% increase in Platform revenue, attributed to additional deployments to new and existing customers, as well as contributions from the Scite acquisition. Transaction revenue also saw a modest increase of 1.7% year-over-year.
The company's net income for Q2 2025 was -$1.98 million. For the fiscal year 2024, Research Solutions reported a net income of -$3.79 million.
Geographic Performance
Research Solutions generates revenue from various geographic markets, with the majority coming from the United States. In Q2 2025, the United States accounted for 58.6% of total revenue, slightly down from 58.9% in the prior year quarter. Europe represented 31.6% of revenue in Q2 2025, compared to 32.0% in the prior year quarter. The rest of the world made up the remaining 9.8% in Q2 2025, up from 9.1% in the prior year quarter.
Liquidity
Research Solutions' financial position remains strong, with a healthy balance sheet and no long-term debt as of June 30, 2024. The company generated positive operating cash flow of $3.55 million and free cash flow of $3.48 million during the fiscal year 2024, indicating its ability to generate sustainable cash flow to fund future growth initiatives.
As of December 31, 2024, the company's cash and cash equivalents stood at $7.7 million, an increase from $6.1 million as of June 30, 2024. Research Solutions maintains a $500,000 secured revolving line of credit with PNC Bank, set to mature on April 15, 2025, with no outstanding borrowings as of December 31, 2024.
The company's current ratio and quick ratio both stood at 0.77 as of December 31, 2024, reflecting its short-term liquidity position.
AI-Powered Solutions
The company's focus on AI-powered research solutions has been a significant driver of its recent success. Through the integration of advanced AI and NLP capabilities, Research Solutions has been able to offer its customers enhanced search, discovery, and analysis tools that streamline the research process and deliver tangible ROI.
One of the key differentiators of Research Solutions' AI-driven offerings is the company's deep relationships with STM content publishers. This access to proprietary content, combined with the company's vertical expertise in research workflows, has enabled it to develop tailor-made AI solutions that cater to the specific needs of its customers.
Future Outlook and Guidance
Looking ahead, Research Solutions remains well-positioned to capitalize on the growing demand for AI-powered research tools. The company's recent product enhancements, including the introduction of Scite's "Smart Citations" and the expansion of AI rights to allow for the use of content in AI applications, have positioned it as a trusted partner for organizations seeking to maximize the value of their research efforts.
For the second half of fiscal 2025, Research Solutions has outlined several key priorities:
1. Continuing to focus on building out a professional and disciplined sales team. The company recently conducted sales training for 45 team members to help standardize their sales process.
2. Investing more in sales and marketing, which may negatively impact their Customer Acquisition Cost (CAC) and CAC-to-Lifetime Value (LTV) metrics in the short term. However, the company expects to see acceleration in bookings in Q4 and FY 2026 Q1, which should cause these metrics to return to normal levels.
3. Improving the user experience and customer experience across the Scite and Article Galaxy Platforms, continuing the integration of AI into the workflow of both products, and enhancing their instrumentation and analytics.
The company delivered a record in terms of organic net new deployments in Q2 2025, with net incremental ARR growth of approximately $1.5 million. While this aligns with their quarterly run rate goals, management noted that it will take a few more quarters before they can consistently deliver this result every quarter.
Research Solutions remains optimistic about its long-term growth plans, both organic and non-organic, despite the ongoing need to stay ahead of the curve and continuously innovate to meet the evolving needs of its customers. Additionally, the competitive landscape in the AI and research intelligence space continues to intensify, as larger technology giants and specialized startups vie for market share.
Conclusion
In conclusion, Research Solutions has demonstrated its ability to adapt and thrive in the dynamic research intelligence market. With its comprehensive suite of AI-driven platforms, strategic acquisitions, and focus on delivering tangible ROI for its customers, the company appears poised to continue its growth trajectory and solidify its position as a leading provider of innovative research solutions. The company's strong financial performance, coupled with its strategic focus on enhancing its AI capabilities and expanding its market presence, suggests that Research Solutions is well-equipped to navigate the evolving landscape and deliver long-term value for its shareholders.