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Research Solutions Inc (RSSS)
NASDAQ:RSSS
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Research Solutions
(NASDAQ:RSSS)
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Rating:59Neutral
Price Target:―
Research Solutions has a solid revenue growth trajectory and strong cash flow generation, but profitability challenges and weak technical indicators weigh on its score. While the earnings call showed positive growth, valuation remains a concern with a negative P/E ratio. The overall outlook suggests cautious optimism, focusing on addressing profitability and technical weaknesses.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.
Platform Subscription Revenue
Robust growth in subscription revenue highlights the company's successful platform strategy, ensuring recurring income and customer retention.
Cash Flow Generation
Strong cash flow generation enhances financial stability, providing resources for reinvestment and strategic initiatives.
Negative Factors
Profitability Challenges
Increasing net losses indicate ongoing profitability challenges, necessitating improved cost management and operational efficiencies.
Customer Churn
High customer churn can hinder revenue stability and growth, emphasizing the need for better customer retention strategies.
Seasonal B2C Slowdown
Seasonal slowdowns in B2C can impact revenue predictability, requiring diversification to mitigate cyclical business impacts.
Research Solutions (RSSS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$85.78M
Dividend YieldN/A
Average Volume (3M)61.78K
Price to Earnings (P/E)69.2
Beta (1Y)0.23
Revenue Growth5.83%
EPS GrowthN/A
CountryUS
Employees145
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.02
Shares Outstanding32,866,070
10 Day Avg. Volume56,211
30 Day Avg. Volume61,781
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 Cap1.26
Enterprise Value/Revenue2.18
Enterprise Value/Gross Profit4.37
Enterprise Value/Ebitda34.78
Forecast
1Y Price Target
$5.33Price Target Upside104.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)0.15
Revenue Forecast (FY)$50.88M
Research Solutions Business Overview & Revenue Model
Company DescriptionResearch Solutions, Inc., through its subsidiaries, provides cloud-based software-as-a-service research platform. The company is also involved in the transactional sale of published scientific, technical, and medical (STM) content managed, sourced, and delivered through the Transactions platform. Its solutions enable life science and other research intensive organizations to accelerate their research and development activities with access and management STM articles used throughout the intellectual property development lifecycle. The company was formerly known as Derycz Scientific, Inc. and changed its name to Research Solutions, Inc. in March 2013. Research Solutions, Inc. was founded in 2006 and is based in Henderson, Nevada.
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:Nov 13, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong B2B performance, increased gross margins, and strategic AI initiatives contributing positively. However, challenges remain with declining transaction revenue, B2C ARR issues, and customer churn impacts. The sentiment is balanced by both significant achievements and persistent challenges.Q1-2026 Updates
Positive Updates
Record B2B Performance
Strongest organic first quarter B2B results on record with a 21% increase in Total ARR, driven by large deals including Real Chemistry and a top 10 pharma company.
Growth in Platform Subscription Revenue
Platform subscription revenue increased by 18% to $5.1 million, driven by new platform deployments, upsells, and cross-sells.
Increased Gross Margin
Gross margin improved to 50.6%, a 270 basis point increase over the prior year, driven by a shift towards higher-margin platforms business.
Strong Cash Flow
Cash flow from operations increased by 31% to $1.1 million, and there were no outstanding borrowings under the revolving line of credit.
Successful AI Initiatives
Introduction of AI rights offering and AI gateway product to monetize AI usage of content, aligning with market trends and creating new revenue streams.
Negative Updates
Decline in Transaction Revenue
Transaction revenue decreased to $7.2 million from $7.7 million in the prior year, with ongoing challenges expected through the first half of fiscal 2026.
B2C ARR Decline
B2C ARR experienced a decline, and conversion rates for new subscriber sign-ups are below expectations.
Customer Churn Impact
Three customers, including two with reduced spending, are driving a significant portion of the year-over-year transaction business decline.
Reduced Active Customer Count
Total active customer count decreased to 1,326 from 1,390 in the same period a year ago.
Company Guidance
During Research Solutions' fiscal 2026 Q1 earnings call, the company reported a strong performance with total annual recurring revenue (ARR) increasing by 21% year-over-year to $21.3 million. The quarter saw a significant 18% rise in platform subscription revenue, reaching $5.1 million, fueled by an increase in platform deployments and upsells. The adjusted EBITDA for the quarter was $1.5 million, marking a 16% increase from the previous year, driven by the strongest organic first-quarter B2B results in company history. The company also reported a gross margin improvement to 50.6%, a 270 basis point increase, due to a shift towards higher-margin platform revenues. Despite a decline in transaction revenue, which fell to $7.2 million, the company maintained healthy cash flow, with cash and equivalents at $12 million. The management emphasized ongoing efforts in sales process improvements and AI product offerings to sustain growth and enhance profitability.Research Solutions Financial Statement Overview
Summary
Research Solutions demonstrates strong revenue growth and cash flow generation. The balance sheet is stable with no debt, but profitability challenges due to negative net income and low return on equity suggest the need for improved cost management.Income Statement
Research Solutions shows a steady revenue growth trajectory with a significant increase of approximately 21.2% in TTM (Trailing-Twelve-Months) compared to the previous period. However, profitability metrics such as the net profit margin are concerning, with a substantial negative net income in TTM, indicating challenges in cost management despite the higher revenue growth.73
Positive
Balance Sheet
The company's balance sheet demonstrates stability with a strong equity base, evidenced by an equity ratio of 26% in TTM. The absence of debt is a positive indicator of financial prudence. However, the relatively low return on equity of -64.6% in TTM due to negative net income suggests inefficiencies in generating profits from shareholders' equity.68
Positive
Cash Flow
The cash flow statement highlights a strong free cash flow generation, with a growth rate of 67.6% in TTM. The operating cash flow to net income ratio is positive, at -0.008 in TTM, indicating that the company is generating cash from operations despite negative earnings. This suggests a potential for operational resilience and cash flow stability.75
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 49.33M | 49.06M | 44.62M | 37.70M | 32.93M | 31.76M |
| Gross Profit | 24.66M | 24.20M | 19.64M | 14.70M | 12.02M | 10.29M |
| EBITDA | 3.10M | 3.54M | 88.12K | 169.30K | -1.47M | -235.14K |
| Net Income | 1.35M | 1.27M | -3.79M | 571.62K | -1.63M | -285.09K |
Balance Sheet | ||||||
| Total Assets | 45.51M | 46.12M | 41.86M | 21.83M | 17.03M | 16.92M |
| Cash, Cash Equivalents and Short-Term Investments | 11.96M | 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 | 29.92M | 32.19M | 30.17M | 14.50M | 12.14M | 11.49M |
| Stockholders Equity | 15.59M | 13.93M | 11.69M | 7.33M | 4.88M | 5.43M |
Cash Flow | ||||||
| Free Cash Flow | 7.25M | 7.00M | 3.48M | 3.34M | -461.49K | 1.85M |
| Operating Cash Flow | 7.29M | 7.02M | 3.55M | 3.38M | -417.20K | 1.87M |
| Investing Cash Flow | -36.80K | -19.26K | -10.10M | -344.66K | -44.29K | -19.85K |
| Financing Cash Flow | -2.22M | -877.88K | -905.85K | -97.26K | 63.27K | -159.97K |
Research Solutions Technical Analysis
Negative
2.61
Price Trends
3.37
Negative
3.13
Negative
3.01
Negative
Market Momentum
-0.14
Positive
26.58
Positive
14.34
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 2.61 is below the 20-day moving average (MA) of 3.12, below the 50-day MA of 3.37, and below the 200-day MA of 3.01, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 26.58 is Positive, neither overbought nor oversold. The STOCH value of 14.34 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 |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $85.78M | 69.23 | 9.49% | ― | 5.83% | ― | |
51 Neutral | $87.56M | -92.98 | 1.17% | ― | 14.20% | ― | |
50 Neutral | $138.63M | ― | -12.19% | ― | 4.71% | 11.12% | |
47 Neutral | $165.98M | ― | -38.62% | ― | 159.00% | 33.19% | |
45 Neutral | $61.58M | 20.02 | ― | ― | ― | ― | |
44 Neutral | $113.84M | -11.12 | -14.61% | ― | -1.83% | -642.89% |
* Technology Sector Average
RSSS
Research Solutions
2.61
-0.47
-15.26%
IDN
Intellicheck Mobilisia
7.13
4.54
175.29%
SSTI
SoundThinking Inc
6.26
-5.48
-46.68%
DUOT
Duos Technologies Group
8.84
3.95
80.78%
EXFY
Expensify
1.47
-1.85
-55.72%
YXT
YXT.COM Group Holding Limited Sponsored ADR
0.75
-1.35
-64.29%
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.