Research Solutions (RSSS) Q2 2025 earnings summary

Executive summary

• Total revenue for Q2 FY2025 was $11.9 million, up 15.5% year-over-year, driven by record organic platform deployments, customer expansion, and the Scite acquisition.

• Platform revenue rose 47% to $4.6 million, now 39% of total revenue, with B2C and B2B segments both contributing to growth.

• Annual recurring revenue (ARR) increased 23% to $19.1 million, with B2B ARR at $12.7 million and B2C ARR at $6.4 million.

• Net loss was $2 million, or $0.07 per share, compared to a net loss of $54,000 in the prior year, mainly due to a $2.4 million provision for Scite earn-out.

• Adjusted EBITDA improved to $963,000, up 202% year-over-year, reflecting improved operating performance excluding non-recurring items.

Financial highlights

• Gross margin improved to 48.9%, up 540 basis points year-over-year, driven by a shift to higher-margin platform business.

• Transaction revenue was $7.3 million, up 1.7% year-over-year, with modest growth mainly from the academic segment.

• Operating expenses increased 16.8% year-over-year, mainly from higher sales, marketing, and technology costs associated with the Scite acquisition.

• Cash and cash equivalents were $7.7 million at quarter end, with strong cash flow from operations of $1 million in the quarter.

• For the six months ended December 31, 2024, total revenue was $24.0 million, up 17.6% year-over-year, with a net loss of $1.3 million.

Outlook and guidance

• Expect continued strong performance in Q3 and Q4, with Q3 and Q4 typically being the strongest for profitability and cash flow.

• Management expects continued growth from expanded platform deployments, customer base expansion, and integration of Scite and Resolute AI.

• Anticipate increased sales and marketing investment in the next quarters, with CAC and CAC to LTV temporarily impacted but expected to normalize as bookings accelerate.

• No material shift expected in SG&A expenses from Q2 levels.

• No material changes to risk factors or forward-looking statements since the last annual report.