Skip to content
Research Solutions Reports Fourth Quarter and Fiscal Year 2024 Results

Reports 18% Revenue Increase, ARR of $17.4 Million and Record Cash Flow

HENDERSON, Nev., Sept. 19, 2024 /PRNewswire/ -- Research Solutions, Inc. (NASDAQ: RSSS), a trusted partner providing cloud-based workflow solutions to accelerate research for R&D-driven organizations, reported record financial results for its fourth quarter and full fiscal year ended June 30, 2024.

Fiscal Fourth Quarter 2024 Summary (compared to prior-year quarter)

  • Total revenue of $12.1 million, a 22% increase.
  • Platform revenue up 86% to $4.3 million. Platform revenue accounted for 35% of the revenue as compared to 23% in the prior year.
  • Annual Recurring Revenue ("ARR") up 84% to $17.4 million, which includes approximately $12.1 million of B2B recurring revenue and $5.4M of B2C recurring revenue.
  • Gross profit up 44%. Total gross margin improved 710 basis points to 46.5%.
  • Net loss of $2.8 million, or ($0.09) per diluted share, compared to $376,000 or $0.01 per diluted share. The quarter's result includes a charge of approximately $4.3 million related to increasing the projected earnout for Scite.
  • Adjusted EBITDA of $1.4 million, a 70% improvement and a Company quarterly record, compared to $825,000.
  • Cash flow from operations of $2.0 million, compared to $1.5 million, a 30% improvement.

Fiscal Year 2024 Summary (compared to Fiscal 2023)

  • Total revenue of $44.6 million, an 18% increase.
  • Platform revenue up 61% to $14.0 million. Transaction revenue increased 5.7% to $30.7 million.
  • Gross profit up 34%. Total gross margin improved 500 basis points to 44.0%.
  • Net loss of $3.8 million, or ($0.13) per diluted share, including the previously mentioned $4.3 million charge and $1.5 million in proxy and acquisition-related expenses, compared to net income of $572,000 or $0.02 per diluted share.
  • Adjusted EBITDA of $2.2 million, which is inclusive of proxy and acquisition-related expenses of $1.4 million, a Company record, compared to $2.0 million.
  • Cash flow from operations of $3.6 million, a Company record, compared to $3.4 million.

"Fiscal 2024 was a transformational year for the Company. We completed two acquisitions which helped position us as a vertical SaaS and AI company, helping researchers throughout their entire workflow. The integration of these acquisitions and our operational execution were meaningful contributors to our 85% year-over-year ARR growth and the double-digit increase in Adjusted EBITDA," said Roy W. Olivier, President and CEO of Research Solutions. "There are many untapped market opportunities where our highly specialized product offerings can serve as a vital piece of the research process.  Overall, we believe we are well-positioned to deliver meaningful ARR growth while expanding Adjusted EBITDA margins, creating long-term value for our shareholders." 

Fiscal Fourth Quarter 2024 Results

Total revenue was $12.1 million, a 22% increase from $10.0 million in the year-ago quarter primarily driven by increased platform revenue versus the prior-year period due to revenue from the Company's acquisitions as well as organic platform revenue growth.

Platform subscription revenue for the quarter was $4.3 million, an 86% year-over-year increase. The increase was primarily due to the acquisition of Scite, as well as organic growth in the core Article Galaxy platform. The quarter ended with annual recurring revenue of $17.4 million, up 84% year-over-year (see the company's definition of annual recurring revenue below).

Transaction revenue was $7.9 million, compared to $7.7 million in the fourth quarter of fiscal 2023. The transaction active customer count for the quarter was 1,398, compared to 1,404 customers in the prior-year quarter (see the company's definition of active customer accounts and transactions below).

Total gross margin improved 710 basis points from the prior-year quarter to 46.5%. The increase was primarily driven by the continued revenue mix shift to the higher-margin Platforms business, as well as a 70 basis point increase in margins in the transactions business.

Total operating expenses were $5.0 million, compared to $3.7 million in the fourth quarter of 2023. The increase was primarily related to the additional cost base associated with the aforementioned acquisitions, as well as increased non-cash depreciation and amortization expense related to such acquisitions. 

Other expense for the quarter was approximately $3.5 million, compared to other income of $120,000 in the prior-year quarter. The primary driver of this was $4.3M of expense related to increasing the earn-out assumption associated with the Scite acquisition.

Net loss in the fourth quarter was $2.8 million, or ($0.09) per diluted share, compared to net income of $376,000, or $0.01 per diluted share, in the prior-year quarter. Adjusted EBITDA was $1.4 million, compared to $825,000 in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Full-Year Fiscal 2024 Results

Total revenue was $44.6 million, an 18% increase from fiscal 2023, driven by both increased platform revenue and transaction revenue.

Platform subscription revenue for fiscal 2024 was $14.0 million, a 61% year-over-year increase. The increase was primarily due to the acquisition of Scite, as well as organic growth in the core Article Galaxy platform.

Transaction revenue was $30.7 million, compared to $29.0 million in fiscal 2023. The increase was driven by organic growth and the impact of a full year of contribution from the acquisition of contracts from FIZ Karlsruhe, compared to six months in fiscal 2023.

Total gross margin improved 500 basis points from the prior-year to 44.0%. The increase was primarily driven by the continued revenue mix shift to the higher-margin Platforms business, as well as a 100 basis point increase in margins in the transactions business related to pricing initiatives.

Total operating expenses for the year were $20.4 million, compared to $14.5 million in fiscal 2023. The increase was primarily related to the additional cost base associated with the acquisitions, including increased non-cash depreciation and amortization expense related to such acquisitions, as well as the aforementioned proxy and acquisition-related expenses.

Net loss for fiscal 2024 was $3.8 million, or ($0.13) per diluted share, compared to net income of $572,000, or $0.02 per diluted share, in the prior-year. Adjusted EBITDA was $2.2 million, compared to $2.0 million in fiscal 2023 (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, September 19, 2024
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-412-317-5180

The conference call will be broadcast live and available for replay until October 19, 2024 by dialing  1-412-317-6671 and using the replay ID 10191850, and via the investor relations section of the company's website at http://researchsolutions.investorroom.com/.

Fiscal Fourth Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter



Quarter Ended June 30,


Twelve Months Ended June 30,



2024

2023

Change

% Change


2024

2023

Change

% Change

Revenue:











Platforms

$   4,277,338

$ 2,303,375

$  1,973,963

85.7 %


$ 13,956,517

$   8,683,246

$  5,273,271

60.7 %


Transactions

$   7,856,176

$ 7,656,342

199,834

2.6 %


$ 30,667,382

$ 29,020,206

1,647,176

5.7 %

Total Revenue

12,133,514

9,959,717

2,173,797

21.8 %


44,623,899

37,703,452

6,920,447

18.4 %











Gross Profit:











Platforms

3,650,286

2,028,265

1,622,021

80.0 %


11,889,314

7,655,960

4,233,353

55.3 %


Transactions

1,992,580

1,892,278

100,302

5.3 %


7,750,852

7,044,931

705,921

10.0 %

Total Gross Profit

5,642,866

3,920,543

1,722,323

43.9 %


19,640,166

14,700,891

4,939,274

33.6 %











Gross profit as a % of revenue:











Platforms

85.3 %

88.1 %

-2.7 %



85.2 %

88.2 %

-3.0 %



Transactions

25.4 %

24.7 %

0.6 %



25.3 %

24.3 %

1.0 %


Total Gross Profit

46.5 %

39.4 %

7.1 %



44.0 %

39.0 %

5.0 %












Operating Expenses:











Sales and marketing

830,195

455,030

375,165

82.4 %


3,442,503

2,285,478

1,157,025

50.6 %


Technology and product development

1,489,491

991,093

498,398

50.3 %


5,442,382

3,742,192

1,700,190

45.4 %


General and administrative

1,917,907

1,649,333

268,574

16.3 %


8,511,697

6,654,012

1,857,685

27.9 %


Depreciation and amortization

311,004

22,163

288,841

1303.3 %


836,271

52,649

783,622

1488.4 %


Stock-based compensation

426,190

585,384

(159,194)

-27.2 %


2,155,461

1,849,906

305,555

16.5 %


Foreign currency translation loss

6,336

(37,743)

44,079

116.8 %


21,395

(121,953)

143,348

117.5 %

Total Operating Expenses

4,981,123

3,665,260

1,315,863

35.9 %


20,409,709

14,462,284

5,947,425

41.1 %

Income (loss) from operations

661,743

255,283

406,460

159.2 %


(769,543)

238,608

(1,008,151)

-422.5 %











Other Income (Expenses):











Other income

(3,451,948)

120,522

(3,572,470)

NM 


(2,903,983)

338,617

(3,242,600)

NM 


Provision for income taxes

(31,022)

(59)

(30,963)

NM 


(113,071)

(5,602)

(107,469)

NM 

Total Other Income (Expenses):

(3,482,970)

120,463

(3,603,433)

NM 


(3,017,054)

333,015

(3,350,069)

NM 

Net income (loss)

$  (2,821,227)

$    375,746

(3,196,973)

NM 


$ (3,786,597)

$      571,623

(4,358,220)

NM










NM

Adjusted EBITDA

$   1,405,273

$    825,087

$      580,186

70.3 %


$   2,243,584

$   2,019,210

$     224,374

11.1 %














Quarter Ended June 30,


Twelve Months Ended June 30,



2024

2023

Change

% Change


2024

2023

Change

% Change

Platforms:











B2B ARR (Annual recurring revenue*):











  Beginning of Period

$ 11,653,063

$ 9,107,681

$  2,545,382

27.9 %


$   9,444,130

$   7,922,188

$  1,521,942

19.2 %


   Incremental ARR

407,139

336,448

70,691

21.0 %


2,616,072

1,521,941

1,094,131

71.9 %


  End of Period

$ 12,060,202

$ 9,444,129

$  2,616,073

27.7 %


$ 12,060,202

$   9,444,129

$  2,616,073

27.7 %












Deployments:











  Beginning of Period

983

815

168

20.6 %


835

733

102

13.9 %


   Incremental Deployments

38

20

18

90.0 %


186

102

84

82.4 %


  End of Period

1,021

835

186

22.3 %


1,021

835

186

22.3 %












ASP (Average sales price):











  Beginning of Period

$         11,855

$      11,175

$             680

6.1 %


$        11,310

$        10,808

$             502

4.6 %


  End of Period

$         11,812

$      11,310

$             502

4.4 %


$        11,812

$        11,310

$             502

4.4 %













B2C ARR (Annual recurring revenue*):











  Beginning of Period

$   4,902,975

$               -

$  4,902,975



$                 -

$                 -

$                -



   Incremental ARR

460,154

-

460,154

NM


5,363,129

-

5,363,129

NM


  End of Period

$   5,363,129

$               -

$  5,363,129

NM


$   5,363,129

$                 -

$  5,363,129

NM













Total ARR (Annualized recurring revenue):

$ 17,423,331

$ 9,444,129

$  7,979,202

84.5 %


$ 17,423,331

$   9,444,129

$  7,979,202

84.5 %












Transaction Customers:











Corporate customers

1,093

1,090

3

0.3 %


1,088

1,012

76

7.5 %


Academic customers

305

314

(9)

-2.9 %


316

304

12

4.0 %


Total customers

1,398

1,404

(6)

-0.4 %


1,404

1,316

88

6.7 %

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 ("ARR") as the value of contracted Platform subscription recurring revenue normalized to a one-year period.  For B2C ARR, this includes the annualized value of monthly subscriptions, meaning their monthly value multiplied by twelve.

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) including any change in fair value of contingent earnout liability, 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):



Quarter Ended June 30,


Twelve Months Ended June 30,



2024

2023

Change

% Change


2024

2023

Change

% Change

Net Income (loss)

$  (2,821,227)

$    375,746

$ (3,196,973)

NM


$ (3,786,597)

$      571,623

$(4,358,220)

NM

 Add (deduct):








-



Other income (expense)

3,451,948

(120,522)

3,572,470

NM


2,903,983

(338,617)

3,242,600

NM


Foreign currency translation loss

6,336

(37,743)

44,079

116.8 %


21,395

(121,953)

143,348

117.5 %


Provision for income taxes

31,022

59

30,963

NM


113,071

5,602

107,469

NM


Depreciation and amortization

311,004

22,163

288,841

1303.3 %


836,271

52,649

783,622

1488.4 %


Stock-based compensation

426,190

585,384

(159,194)

-27.2 %


2,155,461

1,849,906

305,555

16.5 %


Gain on sale of disc. ops.

-

-

-



-

-

-


 Adjusted EBITDA

$   1,405,273

$    825,087

$      580,186

70.3 %


$   2,243,584

$   2,019,210

$     224,374

11.1 %

About Research Solutions 
Research Solutions, Inc. (NASDAQ: RSSS) provides cloud-based technologies to streamline the process of obtaining, managing, and creating intellectual property. Founded in 2006 as Reprints Desk, the company was a pioneer in developing solutions to serve researchers. Today, more than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, the company's SaaS research platform, to streamline access to the latest scientific research and data with 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 enhanced product offerings, additional customers, and the Company's prospects for growth. 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. 

 

Research Solutions, Inc. and Subsidiaries
Consolidated Balance Sheets










June 30, 


June 30, 



2024


2023

Assets







Current assets:







Cash and cash equivalents


$

6,100,031


$

13,545,333

Accounts receivable, net of allowance of $68,579 and $85,015, respectively



6,879,800



6,153,063

Prepaid expenses and other current assets



643,553



400,340

Prepaid royalties



1,067,237



1,202,678

Total current assets



14,690,621



21,301,414








Non-current assets:







Property and equipment, net of accumulated depreciation of $922,558 and $881,908,
respectively



88,011



70,193

Intangible assets, net of accumulated amortization of $1,535,310 and $747,355,
respectively ($8,343,056 provisional)



10,764,261



462,068

Goodwill ($13,171,486 provisional)



16,315,888



Deposits and other assets



981



1,052

Total assets


$

41,859,762


$

21,834,727








Liabilities and Stockholders' Equity







Current liabilities:







Accounts payable and accrued expenses


$

8,843,612


$

8,079,516

Deferred revenue



9,023,848



6,424,724

Total current liabilities



17,867,460



14,504,240








Non-current liabilities:







Contingent earnout liability



12,298,114



Total liabilities



30,165,574



14,504,240








Commitments and contingencies














Stockholders' equity:







Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued and
outstanding





Common stock; $0.001 par value; 100,000,000 shares authorized; 32,295,373 and
29,487,508 shares issued and outstanding, respectively



32,295



29,487

Additional paid-in capital



38,089,958



29,941,873

Accumulated deficit



(26,309,246)



(22,522,649)

Accumulated other comprehensive loss



(118,819)



(118,224)

Total stockholders' equity



11,694,188



7,330,487

Total liabilities and stockholders' equity


$

41,859,762


$

21,834,727

 

Research Solutions, Inc. and Subsidiaries
Consolidated Statements of Operations and Other Comprehensive Loss




Years Ended



June 30, 



2024


2023








Revenue:







Platforms


$

13,956,517


$

8,683,246

Transactions



30,667,382



29,020,206

Total revenue



44,623,899



37,703,452








Cost of revenue:







Platforms



2,067,203



1,027,286

Transactions



22,916,530



21,975,275

Total cost of revenue



24,983,733



23,002,561

Gross profit



19,640,166



14,700,891








Operating expenses:







Selling, general and administrative



19,573,438



14,409,634

Depreciation and amortization



836,271



52,649

Total operating expenses



20,409,709



14,462,283








Income (loss) from operations



(769,543)



238,608








Other income



333,088



338,617

Change in fair value of contingent earnout liability



(3,237,071)










Income (loss) from operations before provision for income taxes



(3,673,526)



577,225

Provision for income taxes



(113,071)



(5,602)








Net income (loss)



(3,786,597)



571,623








Other comprehensive income (loss):







Foreign currency translation



(595)



3,717

Comprehensive income (loss)


$

(3,787,192)


$

575,340








Basic income (loss) per common share:







Net income (loss) per share


$

(0.13)


$

0.02

Weighted average common shares outstanding



28,863,949



26,860,761








Diluted income (loss) per common share:







Net income (loss) per share


$

(0.13)


$

0.02

Weighted average common shares outstanding



28,863,949



29,139,759

 

Research Solutions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows




Years Ended



June 30, 



2024


2023








Cash flow from operating activities:







Net income (loss)


$

(3,786,597)


$

571,623

Adjustment to reconcile net income (loss) to net cash provided by operating activities:







Depreciation and amortization



836,271



52,649

Fair value of vested stock options



140,150



375,189

Fair value of vested restricted common stock



1,994,362



1,418,718

Fair value of vested unrestricted common stock





68,272

Modification cost of accelerated vesting of restricted common stock



20,949



56,000

Adjustment to contingent earnout liability



3,237,071



Changes in operating assets and liabilities:







Accounts receivable



(344,020)



(901,518)

Prepaid expenses and other current assets



(164,579)



(124,314)

Prepaid royalties



135,441



(356,026)

Accounts payable and accrued expenses



560,027



1,337,056

Deferred revenue



921,879



886,198

Net cash provided by operating activities



3,550,954



3,383,847








Cash flow from investing activities:







Purchase of property and equipment



(71,510)



(47,209)

Payment for acquisition of Resolute, net of cash acquired



(2,718,253)



Payment for acquisition of Scite, net of cash acquired



(7,305,493)



Payment for non-refundable deposit for asset acquisition





(297,450)

Net cash used in investing activities



(10,095,256)



(344,659)








Cash flow from financing activities:







Proceeds from the exercise of stock options





57,500

Common stock repurchase



(554,202)



(104,250)

Payment of contingent acquisition consideration



(351,649)



(50,509)

Net cash used in financing activities



(905,851)



(97,259)








Effect of exchange rate changes



4,851



229

Net increase (decrease) in cash and cash equivalents



(7,445,302)



2,942,158

Cash and cash equivalents, beginning of period



13,545,333



10,603,175

Cash and cash equivalents, end of period


$

6,100,031


$

13,545,333








Supplemental disclosures of cash flow information:







Cash paid for income taxes


$

113,071


$

5,602








Non-cash investing and financing activities:







Contingent consideration accrual on asset acquisition


$

32,022


$

138,428

 

SOURCE Research Solutions, Inc.

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