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Research Solutions Inc (RSSS)
NASDAQ:RSSS
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Research Solutions
(NASDAQ:RSSS)
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Rating:65Neutral
Price Target:
$2.50
▼(-16.67% Downside)
The score is driven primarily by solid financial footing (no debt) and improved profitability/cash generation, supported by constructive earnings-call operating progress (ARR/platform growth and margin expansion). These positives are tempered by weak technicals, a high P/E with no dividend support, and ongoing top-line pressure (transaction/B2C weakness and recent TTM revenue decline).
Positive Factors
Conservative balance sheet (no debt)
Zero debt materially reduces financial leverage and default risk, giving the company flexibility to fund product investments, absorb revenue volatility, and meet earn-out obligations from operations. This durable strength supports strategic optionality and resilience through industry cycles.
Strong cash generation and FCF
Consistent positive operating and free cash flow with FCF roughly equal to net income indicates high earnings quality and internal funding capacity. This supports reinvestment in API/AI product work, funds remaining site earn-outs, and reduces reliance on external capital over the medium term.
Recurring ARR growth & high platform margins
Expanding ARR and a high-margin platform mix increase revenue predictability and long-run profitability. Platform share gains and very strong platform gross margins imply scalable unit economics, greater customer stickiness, and potential for durable margin expansion as SaaS replaces lower-margin transactions.
Negative Factors
Sharp TTM revenue decline
A ~25% TTM revenue decline materially weakens scale economics and raises questions about demand sustainability. Even with margin recovery, declining top line constrains operating leverage, makes reinvestment decisions harder, and increases dependence on a successful transition to higher-growth SaaS revenue.
Customer churn & transaction concentration
Revenue sensitivity to a few large customers and visible active-account declines undermine predictability. Large-account churn magnifies volatility in transaction revenue, making multi-year planning and sustained recoveries harder without clear diversification of customer base and reduced concentration risk.
API/MCP pricing execution & B2C competition
Transitioning to per-call API/MCP models and scaling AI integrations creates material execution and monetization risk over the medium term. Combined with tougher B2C dynamics and weaker trial conversion, this leaves revenue growth and margin capture dependent on successful commercial and pricing execution.
Research Solutions (RSSS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$78.64M
Dividend YieldN/A
Average Volume (3M)82.98K
Price to Earnings (P/E)20.3
Beta (1Y)0.25
Revenue Growth5.83%
EPS GrowthN/A
CountryUS
Employees145
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.02
Shares Outstanding32,905,476
10 Day Avg. Volume143,761
30 Day Avg. Volume82,980
Financial Highlights & Ratios
PEG Ratio-0.53
Price to Book (P/B)6.32
Price to Sales (P/S)1.79
P/FCF Ratio12.57
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit2.68
Enterprise Value/Ebitda11.66
Forecast
1Y Price Target
$5.00Price Target Upside66.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Research Solutions Business Overview & Revenue Model
Company DescriptionResearch Solutions (RSSS) is a technology company that provides cloud-based software solutions aimed at simplifying the process of accessing and managing scientific, technical, and medical (STM) content. The company operates primarily in the information services and technology sectors, offering platforms and services that enable researchers, academic institutions, and corporate customers to streamline document retrieval and content management.
How the Company Makes MoneyResearch Solutions makes money through a subscription-based revenue model and transactional services. Key revenue streams include subscription fees from its cloud-based platform, Article Galaxy, which offers on-demand document retrieval and management services. The company also generates revenue from per-transaction fees when users access or purchase specific articles or documents. Significant partnerships with academic institutions, corporate research divisions, and publishers help broaden its customer base and ensure a continuous flow of content, contributing to its earnings.
Research Solutions Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call presented a mix of strong operational and financial improvements (ARR +14%, platform subscription revenue +14%, adjusted EBITDA +36%, margin expansion, positive net income and improved cash flow) alongside continuing top-line pressure in transaction/document delivery and B2C channels driven by a churned large account, lower trial-to-subscriber conversion, and increased competition. Management emphasized strategic progress—API/AI integrations, infrastructure deals with much higher ASPs, and product investments—that underpin durable, higher-margin growth, while acknowledging near-term revenue and pricing execution risks related to transaction dynamics and evolving API pricing models.Q2-2026 Updates
Positive Updates
ARR Growth and Platform Strength
Annual recurring revenue (ARR) ended the quarter at $21.8M, up 14% year-over-year; B2B ARR ~ $15.3M and normalized B2C ARR ~ $6.4M. Platform revenue share rose to 44% of total revenue from 39% a year ago (≈+500 bps).
Platform Subscription Revenue Increase
Platform subscription revenue increased roughly 14% to $5.2M, driven by a net increase of 47 platform deployments and upsells/cross-sells within customers.
Record Organic ARR Addition in Q2
Total incremental ARR for the quarter was $560K, the highest organic second-quarter ARR in company history.
Profitability and Cash Flow Improvement
Net income of $547K ($0.02/diluted) versus a net loss of $2.0M ($0.07) in the prior-year quarter. Adjusted EBITDA rose to $1.3M from $963K (≈+36%). Cash flow from operations was $1.4M, up 35% year-over-year.
Margin Expansion
Reported gross profit of $6.2M (≈+6% YoY) and blended gross margin of 52.4%, a 350 basis-point improvement year-over-year. Platform gross margin was 88.1%, up 160 bps vs. prior year; trailing 12-month blended gross margin at 50.8%.
Operating Expense Discipline
Total operating expenses declined to $5.4M from $5.7M year-over-year, reflecting lower G&A and stock-based comp that offset higher S&M investment, supporting improved operating leverage.
Balance Sheet and Liquidity
Cash and cash equivalents were $12.3M (vs. $12.2M on June 30, 2025). No borrowings on the revolving line of credit. Site earn-out payments were funded (total cash ~$2.6M plus ~487K shares) and management expects remaining site earn-out to be funded from operations.
Product & Go-to-Market Transformation (API / AI)
Strategic pivot to API and AI integrations: launched a new API for Article Galaxy, selling infrastructure (API/MCP) that management says yields deals 2x–5x larger than seat-based sales. Examples include customers performing hundreds of thousands to >1M API calls/year, and improved enterprise traction and stickiness.
Sales Momentum and ASP Improvement
47 net new B2B deployments plus continued year-over-year pipeline ASP growth; management reported a 6% ASP increase during the quarter at the pipeline stage.
Negative Updates
Overall Revenue Essentially Flat / Slight Decline
Total revenue was $11.8M versus $11.9M in the prior-year quarter (≈-0.8%), indicating top-line pressure despite platform growth.
Transaction Revenue Decline
Transaction (document delivery) revenue declined to $6.6M from $7.3M year-over-year (≈-9.6%). Management attributes most of the decline to one churned large account and reduced volume from a few large customers and expects transaction pressure to persist year-over-year in the near term.
Active Customer Count Down
Total active customers fell to 1,321 from 1,384 year-over-year (≈-4.6%), reflecting churn and lower transaction activity among some large accounts.
B2C Softness and Competitive Headwinds
B2C softness driven by a deliberate pullback in lower-quality marketing channels and increased competition for digital keywords. Management reported trial-to-subscriber conversion rates are lower than a year ago and expects this B2C headwind to continue in H2.
Pressure on Transaction Margins
Transaction gross margin decreased to 24% from 25.2% year-over-year (≈-120 bps), driven by lower fixed-cost leverage from reduced transaction volumes and some copyright-related margin pressure.
SaaS Growth Rate and Pricing Uncertainty
Management acknowledged the overall SaaS growth rate needs improvement and expressed intent to return to 20%+ growth. They also noted that pricing and revenue models for high-usage API/MCP (per-call) offerings and publisher revenue-sharing are still being developed and will be refined over the next 12 months, introducing near-term execution risk.
Stock/Market Reaction to AI Headlines
Company noted short-term sell-first stock reactions to AI news and acknowledged AI-related market volatility has impacted the stock, creating external sentiment/headline risk despite the company's view of being well-positioned.
Company Guidance
Management said transaction revenue weakness (Q2 transaction revenue $6.6M vs $7.3M LY)—driven largely by one churned account—is expected to persist into the second half and B2C will face continued competition, while B2B is the primary growth driver: ARR finished Q2 at $21.8M (+14% YoY) including roughly $15.3M of B2B ARR and $6.4M of normalized B2C ARR, platform subscription revenue rose to ~$5.2M (+~14%), total incremental ARR was $560K (the largest organic Q2), 47 net new platform deployments were added and ASP increased 6%; management reiterated a goal to return SaaS growth to 20%+, to exceed fiscal 2025 EBITDA levels in each remaining quarter (Q3/Q4 are typically strongest), to grow cash flow (Q2 cash from operations $1.4M, +35%) while funding remaining site earn-outs from operations, and to exit the year with stronger earnings, cash generation and balance-sheet flexibility (cash $12.3M, no revolver borrowings).Research Solutions Financial Statement Overview
Summary
Financials show a conservative profile with zero debt, improving profitability, and strong TTM operating/free cash flow with good earnings quality. The key offset is the sharp TTM revenue decline (~-25%) and a history of profit/cash-flow volatility, which makes the recovery less fully de-risked.Income Statement
TTM (Trailing-Twelve-Months) results show a clear earnings rebound: operating profit improved to ~7.7% of revenue and net profit is positive, while gross margin remains strong near ~49%. However, the latest revenue growth is meaningfully negative (down ~25% TTM), which raises questions about demand momentum despite improved profitability. Over the last few years, revenue generally grew, but profitability has been volatile (losses in FY2022 and FY2024), making the current margin improvement a positive but not yet fully de-risked trend.67
Positive
Balance Sheet
The balance sheet is conservatively positioned with zero debt across periods, eliminating leverage-driven financial risk. Equity has grown materially versus prior years, and TTM (Trailing-Twelve-Months) return on equity is solid (~10%), reflecting improved profitability on a strengthened capital base. The main drawback is that returns have been inconsistent historically (negative in FY2022 and FY2024), so the stronger ROE appears cyclical or recovery-driven rather than consistently steady.82
Very Positive
Cash Flow
Cash generation is a key strength: TTM (Trailing-Twelve-Months) operating cash flow (~$7.6M) and free cash flow (~$7.6M) are strong and closely track reported earnings (free cash flow is ~1.0x net income), indicating good earnings quality. Free cash flow growth is also very strong in the latest period. Offsetting this, operating cash flow relative to revenue is modest (single-digit), and cash flow has shown volatility in the past (including negative operating/free cash flow in FY2022).79
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 49.20M | 49.06M | 44.62M | 37.70M | 32.93M | 31.76M |
| Gross Profit | 24.70M | 24.20M | 19.64M | 14.70M | 12.02M | 10.29M |
| EBITDA | 5.69M | 3.54M | 88.12K | 169.30K | -1.47M | -235.14K |
| Net Income | 3.87M | 1.27M | -3.79M | 571.62K | -1.63M | -285.09K |
Balance Sheet | ||||||
| Total Assets | 44.24M | 46.12M | 41.86M | 21.83M | 17.03M | 16.92M |
| Cash, Cash Equivalents and Short-Term Investments | 12.26M | 12.23M | 6.10M | 13.55M | 10.60M | 11.00M |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 27.02M | 32.19M | 30.17M | 14.50M | 12.14M | 11.49M |
| Stockholders Equity | 17.23M | 13.93M | 11.69M | 7.33M | 4.88M | 5.43M |
Cash Flow | ||||||
| Free Cash Flow | 7.60M | 7.00M | 3.48M | 3.34M | -461.49K | 1.85M |
| Operating Cash Flow | 7.64M | 7.02M | 3.55M | 3.38M | -417.20K | 1.87M |
| Investing Cash Flow | -38.42K | -19.26K | -10.10M | -344.66K | -44.29K | -19.85K |
| Financing Cash Flow | -3.05M | -877.88K | -905.85K | -97.26K | 63.27K | -159.97K |
Research Solutions Technical Analysis
Negative
3.00
Price Trends
2.81
Negative
3.03
Negative
2.99
Negative
Market Momentum
-0.11
Positive
27.98
Positive
16.40
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSSS, the sentiment is Negative. The current price of 3 is above the 20-day moving average (MA) of 2.69, above the 50-day MA of 2.81, and above the 200-day MA of 2.99, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 27.98 is Positive, neither overbought nor oversold. The STOCH value of 16.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RSSS.
Research Solutions Risk Analysis
Research Solutions disclosed 31 risk factors in its most recent earnings report. Research Solutions reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Research Solutions Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $78.64M | 20.30 | 9.49% | ― | 5.83% | ― | |
62 Neutral | $98.20M | 498.99 | 1.17% | ― | 14.20% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $186.62M | -9.40 | -38.62% | ― | 159.00% | 33.19% | |
50 Neutral | $109.79M | -7.61 | -12.19% | ― | 4.71% | 11.12% | |
49 Neutral | $88.64M | -8.77 | -14.61% | ― | -1.83% | -642.89% | |
49 Neutral | $33.04M | 0.70 | ― | ― | ― | ― |
* Technology Sector Average
RSSS
Research Solutions
2.43
-0.82
-25.23%
IDN
Intellicheck Mobilisia
4.94
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92.97%
SSTI
SoundThinking Inc
7.43
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DUOT
Duos Technologies Group
8.92
2.30
34.74%
EXFY
Expensify
1.29
-2.16
-62.61%
YXT
YXT.COM Group Holding Limited Sponsored ADR
0.55
-1.40
-71.79%
Research Solutions Corporate Events
Executive/Board Changes
Research Solutions Appoints Dave Kutil as Interim CFO
Neutral
Dec 11, 2025
On December 10, 2025, William Nurthen resigned as Chief Financial Officer and Secretary of Research Solutions, Inc. to pursue another opportunity. Dave Kutil, who has been the company’s Global Controller since March 2023, was appointed as the Interim CFO and Secretary. Kutil brings over 15 years of financial leadership experience, having previously worked at Lesaffre Yeast Corporation and Badger Meter. His appointment is expected to maintain continuity in the company’s financial operations and strategic vision.
The most recent analyst rating on (RSSS) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on Research Solutions stock, see the RSSS Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.