Research Solutions (RSSS) investor relations material

Business transformation and product evolution

• Transitioned from document delivery to a SaaS platform model, focusing on research workflow solutions for R&D-intensive organizations.

• Article Galaxy evolved to offer subscription optimization, rights management, and AI rights compliance.

• Acquired Scite and Resolute to enhance discovery and analysis capabilities, with Scite now the default search engine.

• Platform business now represents 40-42% of revenue, up from 26% two years ago, driving higher gross margins.

• B2B platform ARR is growing 20% organically, with high retention and sticky, recurring revenue.

Financial performance and outlook

• Adjusted EBITDA reached $5.5 million and cash flow from operations $7.3 million, both up significantly from fiscal 2023.

• Cash balance increased from $2.7 million post-Scite acquisition to $12 million, supporting organic growth.

• Transactional business faces headwinds from open access content and customer churn, with a 7% year-over-year decline.

• Platform business maintains 85%+ gross margins and 18-20% growth, while transactional business has 24.5% margins and is expected to remain flat.

• Share buybacks are under consideration due to current valuation and acquisition environment.

Market opportunity and customer base

• Serves 1,500 customers, with pharma, biotech, and medical device sectors comprising about half of corporate revenue.

• B2B market TAM is $4 billion, with B2C TAM described as huge; focus remains on B2B for long-term growth.

• Customer lifetime value averages 6-8 years, with top-tier accounts renewing at 97-98%.

• Expanding into new verticals is possible but not a current priority; focus is on deepening presence in existing 50+ verticals.

• Ongoing investments in customer success tools and ideal customer profiling to reduce churn.