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Research Solutions Reports Impressive Fiscal Third Quarter 2025 Results

Research Solutions, Inc. (NASDAQ: RSSS), a front-runner in AI-powered research workflow solutions, recently shared its financial performance for the fiscal third quarter that ended on March 31, 2025. This quarter marked a new era for the company, showcasing significant upward trends across various financial metrics.

During this quarter, Research Solutions experienced a total revenue of $12.7 million, a 4.5% increase compared to $12.1 million reported in the equivalent quarter from the previous year. The notable aspect of this growth was the surge in platform revenue, which climbed by 22% to $4.8 million, indicating a rising contribution of platforms to overall revenue.

For the first time in the company’s history, it achieved an Annual Recurring Revenue (ARR) above $20 million—specifically, at $20.4 million, representing a 23% increase year-over-year. This substantial growth included about $13.5 million from B2B recurring revenue and $6.9 million from B2C, showcasing a balanced revenue stream across different sectors. The company recorded net B2B ARR growth of $736,000, achieving a company record for quarterly B2B expansion.

The gross profit for Research Solutions also saw an upward trend, improving by 14% year-over-year, with total gross margin escalating by 430 basis points to 49.5%. This positive margin shift reflects the company's strategic shift towards higher-margin offerings, which further catalyzed profitability.

For this quarter, the net income stood at $216,000, a remarkable increase from $76,000 in the previous fiscal year. This translated to $0.01 per diluted share, compared to nil in the same quarter last year. The positive trajectory continued with an Adjusted EBITDA of $1.4 million, which is an increase from the $961,000 reported a year prior. Over the trailing twelve months, the company's Adjusted EBITDA totaled $5.1 million, reflecting a 10.4% margin.

Additionally, the cash flow from operations recorded a notable figure of approximately $2.9 million, establishing a new quarterly record for the company and enhancing the operational liquidity to invest back into the business or explore acquisition opportunities.

Roy W. Olivier, the President and CEO of Research Solutions, expressed enthusiasm regarding the company's milestones. He stated, “This quarter represents significant achievements for our company. We are pleased to report ARR exceeding $20 million for the first time. The growth of our AI-driven B2B offerings has surged over 180% in the past year, while we also witness robust growth in our B2C offerings and our core Article Galaxy platform.” He attributed this success to a revamped sales strategy that better articulates the efficiency and cost-saving benefits of their solutions within the research workflow.

The growth trajectory is bolstered by an increase in active customers, with a total of 1,380 customers in the quarter, down slightly from 1,426 in the previous year. The company acknowledges a slight drop in transaction revenue due to lower paid order volume, reaching $7.8 million this quarter as compared to $8.2 million last year.

Overall, Research Solutions’ fiscal third quarter of 2025 demonstrates a strong performance bolstered by innovative strategies, leading to significant growth in recurring revenues and operational efficiency. Moving forward, the focus on enhancing product capabilities and expanding market presence remains a priority, positioning the company for sustained success in the evolving research landscape.

For further inquiries, Research Solutions invites shareholders and interested parties to join their upcoming conference call led by Olivier and CFO Bill Nurthen on May 8, 2025. The call will start at 5 PM ET, providing an opportunity for PG investors and analysts to discuss the financial results and future outlook of the company.

In conclusion, Research Solutions not only marks a significant milestone in its ARR growth but also demonstrates impressive financial resilience and the potential to capture further market share through continued innovation and strategic initiatives.