Research Solutions (RSSS) Q4 2024 earnings summary

Executive summary

• Achieved a transformational year with acquisitions of ResoluteAI and Scite, expanding SaaS and AI capabilities and market reach.

• Scite outperformed expectations, especially in B2C sales and cross-selling into B2B.

• Rebranded for cohesive messaging and integrated product platforms, driving internal alignment.

• Achieved record revenue, ARR, and cash flow, with significant growth in platform revenue and adjusted EBITDA.

• Highest levels of automated article delivery achieved, with 76.8% instant delivery for articles with DOIs.

Financial highlights

• Fiscal 2024 revenue reached $44.6M, up 18% year-over-year; Q4 revenue was $12.1M, up 22% from prior year.

• Platform subscription revenue grew 61% to $14M for the year; Q4 platform revenue up 86% to $4.3M.

• Transaction revenue for the year was $30.7M, up 5.7% year-over-year.

• Gross margin for Q4 was 46.5%, up 710 bps year-over-year; full-year gross margin was 44%, up 500 bps.

• Adjusted EBITDA for the year was $2.2M, up 11%; Q4 Adjusted EBITDA was $1.4M, up 70%.

Outlook and guidance

• Expecting some softness in Q1 2025 ARR growth due to seasonality and longer B2B sales cycles.

• Profit profile and long-term value creation remain intact; EBITDA margins expected to remain in low double digits.

• Cash expected to increase through FY25, with strongest cash flow in Q3 and Q4.

• Management expects continued ARR growth and expanding adjusted EBITDA margins, citing untapped market opportunities and integration of acquisitions.