RSSS · Research Solutions, Inc.

Research Solutions delivered a high-quality earnings result in Q3 FY2026, marked by strong profitability expansion despite modest top-line contraction. The $12.1 million in total revenue reflected a $540k YoY decline, primarily driven by an $860k drop in transaction revenue — attributed to churn from a known customer and reduced volume from several large accounts — while platform revenue grew 6.6% to $5.2 million, lifting its share of total revenue to 43% (from 38% YoY). This strategic shift toward higher-margin platform subscriptions directly fueled the 220-basis-point gross margin improvement to 51.7%, underscoring successful execution on business model transformation. Net income more than tripled YoY to $860k ($0.03 diluted EPS), aided not only by margin gains but also by disciplined expense management: total operating expenses fell $490k YoY, led by $220k in G&A reductions and a $346k decline in stock-based compensation. Adjusted EBITDA rose 14% to $1.6 million, and the TTM figure reached $6.0 million at a 12.3% margin — evidence of durable operating leverage. Management highlighted new AI-powered integrations for Article Galaxy and Scite as key drivers of customer engagement and upsell potential, reinforcing their focus on embedding within researchers’ existing workflows. While operating cash flow declined YoY to $1.0 million due to billing timing and working capital shifts, the TTM figure remains healthy at $5.7 million. The balance sheet remained robust, with $12.1 million in cash and minimal debt, positioning the company to continue investing in sales and product development without financial constraint.