Reports 21% Increase in ARR to $21.3 Million, Strong Growth in Net Income, Adjusted EBITDA and Operating Cash Flow
HENDERSON, Nev., Nov. 13, 2025 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), the leading AI-powered research workflow platform, reported financial results for its fiscal first quarter ended September 30, 2025.
Fiscal First Quarter 2026 Summary (compared to prior-year quarter)
- Annual Recurring Revenue ("ARR") up 21% to $21.3 million, which includes approximately $14.8 million of B2B recurring revenue and $6.5 million of B2C recurring revenue. Net B2B ARR growth of $561,000 was up over 300% from last year and represents the best organic Q1 performance in Company history.
- Platform revenue up 18% to $5.1 million. Platform revenue accounted for 42% of total revenue as compared to 36% in the prior-year quarter.
- Total revenue of $12.3 million, a 2% increase.
- Gross profit up 8% to $6.2 million. Total gross margin improved 270 basis points to 50.6%.
- Net income of $749,000, or $0.02 per diluted share, compared to $669,000 or $0.02 per diluted share.
- Adjusted EBITDA increased 16% to $1.5 million. On a trailing twelve-months ("TTM") basis, the Company has now generated Adjusted EBITDA of $5.5 million, which represents an 11.1% margin.
- Cash flow from operations increased 31% to $1.1 million, compared to $843,000. On a TTM basis, the Company has now generated $7.3 million of cash flow from operations.
"Our first quarter results show the continued progress of our transformation toward award winning SaaS and AI solutions. We posted the strongest organic Q1 growth on record within our B2B business, aided by winning multiple six-figure deals, including our largest ever Scite AI deal, which are being driven in part by the new capabilities offered within our Article Galaxy and Scite platforms, including API access, an AI rights add-on and the launch of Scite rankings. With these deals our Average Sales Price ("ASP") is now near all-time high levels," said Roy W. Olivier, President and CEO of Research Solutions. "We also continue to make incremental progress towards our 'Rule of 40' target, thanks to a 21% year-over-year increase in total ARR and our second-best EBITDA quarter in Company history. Lastly, the business continues to generate strong cash flow, placing us in a very strong position to reinvest into our sales and marketing efforts to further drive better execution and deliver for our shareholders."
Fiscal First Quarter 2026 Results
Total revenue was $12.3 million, compared to $12.0 million in the year-ago quarter, driven by increased platform revenue versus the prior-year period.
Platform subscription revenue for the quarter was $5.1 million, an 18% year-over-year increase from the prior-year period. The increase was due to organic growth in the core B2C and B2B platforms, with the latter increasing due to a mix of new logo generation as well as upsells and cross sells into existing customers. The quarter ended with annual recurring revenue of $21.3 million, up 21% year-over-year (see the Company's definition of annual recurring revenue below).
Transaction revenue was $7.2 million, compared to $7.7 million in the first quarter of fiscal 2025. The decrease was due to lower per article fees on paid orders. The transaction active customer count for the quarter was 1,326, compared to 1,390 customers in the prior-year quarter (see the Company's definition of active customer accounts and transactions below).
Total gross margin improved 270 basis points from the prior-year quarter to 50.6%. The increase was primarily driven by the continued revenue mix shift to the higher-margin Platforms business, including the expansion of the gross margin for that business.
Total operating expenses were $5.3 million, compared to $5.1 million in the first quarter of 2025. The increase was primarily related to higher sales and marketing expenses offset by reduced general and administrative and stock-based compensation expenses.
Net income in the first quarter was $749,000, or $0.02 per diluted share, compared to $669,000, or $0.02 per diluted share, in the prior-year quarter. Adjusted EBITDA was $1.5 million, compared to $1.3 million in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).
Conference Call
Research Solutions President and CEO Roy W. Olivier and CFO Bill Nurthen will host the conference call, followed by a question-and-answer period.
Date: Thursday, November 13, 2025
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-203-518-9708
Conference ID: RESEARCH
The conference call will be broadcast live and available for replay until December 13, 2025 by dialing 1-412-317-6671 and using the replay ID 11160315, and via the investor relations section of the Company's website at http://researchsolutions.investorroom.com/.
Fiscal First Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter
Quarter Ended September 30, | ||||||
2025 | 2024 | Change | % Change | |||
Revenue: | ||||||
Platforms | $ 5,120,840 | $ 4,329,645 | $ 791,195 | 18.3 % | ||
Transactions | 7,191,345 | 7,714,837 | (523,492) | -6.8 % | ||
Total Revenue | 12,312,185 | 12,044,482 | 267,703 | 2.2 % | ||
Gross Profit: | ||||||
Platforms | 4,510,465 | 3,782,478 | 727,987 | 19.2 % | ||
Transactions | 1,714,833 | 1,983,398 | (268,565) | -13.5 % | ||
Total Gross Profit | 6,225,298 | 5,765,876 | 459,422 | 8.0 % | ||
Gross profit as a % of revenue: | ||||||
Platforms | 88.1 % | 87.4 % | 0.7 % | |||
Transactions | 23.8 % | 25.7 % | -1.9 % | |||
Total Gross Profit | 50.6 % | 47.9 % | 2.7 % | |||
Operating Expenses: | ||||||
Sales and marketing | 1,666,825 | 1,190,407 | 476,418 | 40.0 % | ||
Technology and product development | 1,410,151 | 1,372,758 | 37,393 | 2.7 % | ||
General and administrative | 1,675,359 | 1,930,176 | (254,817) | -13.2 % | ||
Depreciation and amortization | 316,066 | 312,095 | 3,971 | 1.3 % | ||
Stock-based compensation | 212,482 | 417,989 | (205,507) | -49.2 % | ||
Foreign currency translation loss (gain) | (17,256) | (104,240) | 86,984 | -83.4 % | ||
Total Operating Expenses | 5,263,627 | 5,119,185 | 144,442 | 2.8 % | ||
Income (loss) from operations | 961,671 | 646,691 | 314,980 | 48.7 % | ||
Other Income (Expenses): | ||||||
Other income (expenses) | (191,053) | 68,525 | (259,578) | NM | ||
Provision for income taxes | (21,231) | (46,212) | 24,981 | -54.1 % | ||
Total Other Income (Expenses): | (212,284) | 22,313 | (234,597) | NM | ||
Net income | $ 749,387 | $ 669,004 | $ 80,383 | 12.0 % | ||
Adjusted EBITDA | $ 1,472,963 | $ 1,272,535 | $ 200,428 | 15.8 % | ||
Quarter Ended September 30, | ||||||
2025 | 2024 | Change | % Change | |||
Platforms: | ||||||
B2B ARR (Annual recurring revenue*): | ||||||
Beginning of Period | $ 14,197,598 | $ 12,060,201 | $ 2,137,397 | 17.7 % | ||
Incremental ARR | 560,874 | 127,633 | 433,241 | 339.4 % | ||
End of Period | $ 14,758,472 | $ 12,187,834 | $ 2,570,637 | 21.1 % | ||
Deployments: | ||||||
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