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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
$106.67M
Dividend YieldN/A
Average Volume (3M)156.22K
Price to Earnings (P/E)93.0
Beta (1Y)0.15
Revenue Growth9.94%
EPS GrowthN/A
CountryUS
Employees145
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.07
Shares Outstanding32,821,780
10 Day Avg. Volume73,721
30 Day Avg. Volume156,225
Financial Highlights & Ratios
PEG Ratio-0.53
Price to Book (P/B)<0.01
Price to Sales (P/S)0.00179
P/FCF Ratio12.57
Enterprise Value/Market Cap0.76
Enterprise Value/Revenue1.65
Enterprise Value/Gross Profit3.35
Enterprise Value/Ebitda31.23
Forecast
1Y Price Target
$5.33Price Target Upside66.56% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
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:Sep 18, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in ARR, platform subscription revenue, and improved gross margins, supported by successful AI strategy implementation and significant cash flow increase. However, challenges in transaction revenue decline and competitive pressures in the B2C space were noted, indicating some areas of concern.Q4-2025 Updates
Positive Updates
Record Annual Recurring Revenue (ARR)
The company achieved $21 million in ARR, with a 20% growth in FY 2025. They are focused on reaching a $30 million platform ARR target by the end of FY 2027.
Strong Platform Subscription Revenue Growth
Platform subscription revenue increased by 21% in Q4 2025 compared to the prior year quarter, driven by both B2C and B2B platform revenue growth.
Improved Gross Margin
Gross margin for Q4 2025 was 51%, a 450 basis point improvement over Q4 2024. This was the first time in the company's history that blended gross margin has been in excess of 50% for a quarter.
Record Adjusted EBITDA
Adjusted EBITDA for Q4 2025 was $1.6 million, a 13% margin and a new company quarterly record. For the full fiscal year, adjusted EBITDA was $5.3 million, a company record compared to $2.2 million in fiscal 2024.
Significant Increase in Cash Flow
The company generated over $7 million in cash flow from operations in fiscal 2025, almost double the result from the previous year.
Successful AI Strategy Implementation
AI-based products are growing at almost 4x the pace of legacy products, with strong tailwinds expected from AI in the next few quarters.
Negative Updates
Decline in Transaction Revenue
Transaction revenue for Q4 2025 was approximately $7.3 million compared to $7.9 million in the prior year quarter, with declines in order volumes continuing to be a challenge.
Challenges in B2C ARR Growth
There was a modest sequential decline in B2C ARR due to the late spring into summer being a seasonally difficult time for that product.
Competitive Pressures in B2C Space
The company is experiencing competitive pressures in the B2C space, which may affect near-term growth.
Headwinds in Transactions Business
The transactions business has seen headwinds, with declines in paid transaction order volumes starting from February 2025.
Company Guidance
During the fourth quarter and full fiscal year 2025 earnings call, Research Solutions highlighted several key metrics and strategic focuses. The company achieved a record $21 million in annual recurring revenue (ARR), marking a 20% year-over-year growth, with a target of reaching $30 million by the end of fiscal year 2027. Platform subscription revenue increased by 21% from the prior year quarter, contributing to a total revenue of $12.4 million for the fourth quarter. The company's gross margin improved to 51%, a 450 basis point increase over the previous year, while adjusted EBITDA reached a new quarterly record of $1.6 million. The company ended the year with $20.9 million in ARR, and cash flow from operations doubled to over $7 million. Research Solutions emphasized its strategic shift towards becoming a vertical SaaS company, focusing on leveraging AI to enhance customer value and drive growth, particularly through API-first strategies and integrations with large language models (LLMs).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 | 49.06M | 49.06B | 44.62M | 37.70M | 32.93M | 31.76M |
| Gross Profit | 24.20M | 24.20B | 19.64M | 14.70M | 12.02M | 10.29M |
| EBITDA | 2.59M | 2.59M | 66.73K | 291.26K | -1.47M | -235.14K |
| Net Income | 1.27M | 1.27M | -3.79M | 571.62K | -1.63M | -285.09K |
Balance Sheet | ||||||
| Total Assets | 46.12M | 46.12B | 41.86M | 21.83M | 17.03M | 16.92M |
| Cash, Cash Equivalents and Short-Term Investments | 12.23M | 12.23B | 6.10M | 13.55M | 10.60M | 11.00M |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 32.19M | 32.19B | 30.17M | 14.50M | 12.14M | 11.49M |
| Stockholders Equity | 13.93M | 13.93B | 11.69M | 7.33M | 4.88M | 5.43M |
Cash Flow | ||||||
| Free Cash Flow | 7.00M | 7.00M | 3.48M | 3.34M | -461.49K | 1.85M |
| Operating Cash Flow | 7.02M | 7.02M | 3.55M | 3.38M | -417.20K | 1.87M |
| Investing Cash Flow | -19.26K | -19.26K | -10.10M | -344.66K | -44.29K | -19.85K |
| Financing Cash Flow | -877.88K | -877.88K | -905.85K | -97.26K | 63.27K | -159.97K |
Research Solutions Technical Analysis
Neutral
3.20
Price Trends
3.36
Negative
3.07
Positive
3.08
Positive
Market Momentum
-0.06
Positive
43.57
Neutral
25.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSSS, the sentiment is Neutral. The current price of 3.2 is below the 20-day moving average (MA) of 3.46, below the 50-day MA of 3.36, and above the 200-day MA of 3.08, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 43.57 is Neutral, neither overbought nor oversold. The STOCH value of 25.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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% | |
61 Neutral | $139.68M | -13.82 | -13.49% | ― | 1.47% | -430.99% | |
59 Neutral | $106.67M | 93.02 | 9.88% | ― | 9.94% | ― | |
58 Neutral | $168.52M | ― | -274.34% | ― | 172.93% | 34.97% | |
55 Neutral | $64.28M | 20.90 | ― | ― | ― | ― | |
51 Neutral | $92.57M | -99.15 | -5.20% | ― | 7.13% | -99.15% | |
46 Neutral | $156.58M | ― | -12.58% | ― | 4.13% | 54.44% |
* Technology Sector Average
RSSS
Research Solutions
3.25
0.63
24.05%
IDN
Intellicheck Mobilisia
4.66
2.21
90.20%
SSTI
SoundThinking Inc
11.06
-0.03
-0.27%
DUOT
Duos Technologies Group
9.03
4.81
113.98%
EXFY
Expensify
1.68
-0.03
-1.75%
YXT
YXT.COM Group Holding Limited Sponsored ADR
1.06
-1.36
-56.20%
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.