Research Solutions (RSSS) Q3 2025 earnings summary

Executive summary

• Achieved total revenue of $12.7 million for the quarter ended March 31, 2025, up 4.5% year-over-year, driven by 22% platform revenue growth and strong B2B and B2C performance.

• Annual Recurring Revenue (ARR) reached a record $20.4 million, with B2B ARR at $13.5 million and B2C (scite) ARR at $6.9 million; 43 net B2B platform deployments in the quarter.

• Net income for the quarter was $216,000 ($0.01 per diluted share), up 183.7% year-over-year, with Adjusted EBITDA at a record $1.4 million and operating cash flow of $2.9 million.

• AI-based products, especially in B2B, saw 180% year-over-year growth; acquisitions of ResoluteAI and scite expanded AI and SaaS capabilities.

• Transitioning from transactional to high-margin SaaS platform, with platform revenue now 37-38% of total and a focus on ARR growth toward a $30 million target.

Financial highlights

• Gross margin improved to 49.5% (up 430 bps year-over-year), with platform gross margin at 87.4% and transaction gross margin at 26%.

• Adjusted EBITDA for the quarter was $1.4 million (11.2% margin), with trailing 12-month Adjusted EBITDA at $5.1 million.

• Cash and equivalents grew to $9.9 million as of March 31, 2025, with $2.9 million cash flow from operations in Q3 and $6.7 million on a trailing 12-month basis.

• Operating expenses increased due to higher sales, marketing, and technology costs, mainly from the scite acquisition.

• No customers represented more than 10% of revenue or accounts receivable.

Outlook and guidance

• Management expects continued strong ARR and platform revenue growth, targeting ~$30 million ARR in two years and 50%+ group gross margins.

• Ongoing investments in sales, marketing, and AI-driven product development, with new platform solutions planned to enhance research workflows.

• Strategic acquisitions and capital allocation to support organic growth and potential share buybacks.