Research Solutions, Inc.

What they do

Research Solutions operates cloud-based SaaS platforms (Article Galaxy, Article Galaxy Scholar, Scite.ai, Resolute.ai) that help researchers discover, access, manage, and purchase scientific, technical, and medical (STM) content. It also facilitates transactions for individual articles and rights/permissions for content reuse, including AI training. Customers include corporate, academic, government, and individual researchers under auto-renewing licenses.

Revenue drivers

• Platforms — Subscription revenue from SaaS platforms; $5.2M in Q3 FY2026, up 6.6% YoY; accounts for 43% of total revenue; includes B2B ARR of $15.7M and B2C ARR of $6.4M.
• Transactions — Sale of individual STM articles; $7.0M in Q3 FY2026, down 11% YoY due to lower volume from a churned and several large customers; 1,346 active transaction customers.
• Annual Recurring Revenue (ARR) — ARR grew 8.5% YoY to $22.1M; 15 net new deployments in Q3; 10% deployment growth over past 12 months; mix shift to higher-margin Platforms drives profitability.

Recent performance

In Q3 FY2026 (ended March 31, 2026), total revenue was $12.1M, down from $12.7M in the prior-year period, as platform growth was offset by transaction decline. Net income was $860,000, up 297% from $216,000, and diluted EPS was $0.03. Adjusted EBITDA rose 14% to $1.6M; TTM adjusted EBITDA reached $6.0M (12.3% margin). Gross margin improved 220 bps to 51.7%. For the nine months ended March 31, 2026, revenue was $36.2M, down slightly from $36.6M, but income from operations more than doubled to $2.7M from $1.3M.

Strategy

Management is focused on expanding the Platforms business to improve gross margin and profitability, investing in sales and marketing to drive upsells and larger new deals. Recently introduced two new AI-based products for Article Galaxy and Scite to integrate with existing AI tools. The company aims to leverage its AI capabilities to simplify research processes and grow recurring revenue.

Risks

• Customer concentration — No customer accounts for >10% of revenue, but loss of largest customers could significantly reduce revenue.
• Supplier concentration — Loss of largest content suppliers could significantly reduce revenue.
• Historical losses — Accumulated deficit of $25.0M as of June 30, 2025; may be unable to sustain profitability despite recent net income.
• Revenue mix shift — Decline in transaction revenue could persist, as seen in Q3 with lower volume from churned and large customers.

Outlook

Management cites improving profitability and growth prospects despite a softer operating environment. New AI products are expected to help remain an integral partner with researchers. Focus on Platforms expansion and sales/marketing investments is expected to drive long-term shareholder value.