Research Solutions Announces Fiscal Fourth Quarter and Full Year 2023 Results

Reports Full-Year GAAP Net Income, Record Adjusted EBITDA and 28% Increase in Platform Revenue
HENDERSON, Nev., Sept. 13, 2023 /PRNewswire/ — Research Solutions, Inc. (NASDAQ: RSSS), a pioneer in providing cloud-based workflow solutions for R&D driven organizations, reported financial results for its fiscal fourth quarter and full year ended June 30, 2023.

Fiscal Fourth Quarter 2023 Summary
Total revenue increased 16% to $10.0 millionPlatform revenue up 22% to $2.3 million; Annual recurring revenue up 19% to $9.4 millionGross profit up 19% to the prior-year quarter; Total gross margin improved 110 basis points to 39.4%Net income of $375,746 or one cent per diluted share, compared to a net loss of ($438,267) or one cent per share in the prior-year quarterAdjusted EBITDA of $825,087 compared to ($121,327) in the same period a year agoCash flow from operations of $1.5 million compared to slightly negative cash flow in the prior-year quarterFull-Year Fiscal 2023 Summary
Total revenue increased 14% to $37.7 millionPlatform revenue of $8.7 million, a 28% increase, with a 14% increase in total deployments to 835Total gross margin increased 250 basis points to 39.0%Net income of $0.6 million, or $0.02 per diluted share, compared to a net loss of $1.6 million or  ($0.06) per share in the prior yearAdjusted EBITDA of $2.0 million compared to ($0.4 million) in the previous yearCash flow from operations of $3.4 million, compared to ($0.4 million) in the previous yearItems Subsequent to End of Fiscal 2023
Acquired ResoluteAI, a developer of advanced search and discovery toolsEngaged Jeremy Murphy as an advisor and observer to the Board of Directors”Fiscal year 2023 was an exciting year for our business.  Our results represent the significant progress made across our organization, highlighted by our highest annual organic revenue growth in more than a decade and first year of GAAP profitability since fiscal 2015,” said Roy W. Olivier, President and CEO of Research Solutions. “Our customers continue to recognize the greater efficiency and cost savings offered through our Article Galaxy platform and our recent acquisition of ResoluteAI expands these offerings and capabilities, providing us with meaningful cross-selling opportunities.  While we continue to see headwinds in the platform business, we are optimistic about our fiscal year 2024 and look to continue to grow the business organically as well as through strategic M&A.”
Fiscal Fourth Quarter 2023 Results
Total revenue increased 16% to $10.0 million, compared to $8.6 million in the same year-ago quarter.
Platform subscription revenue increased 22% to $2.3 million compared to approximately $1.9 million in the year-ago quarter. The increase was primarily due to an increase in upsell activity within our existing customer base and an increase in the total number of paid Platform deployments, including 20 added in the quarter. The quarter ended with annual recurring revenue of $9.4 million, up 4% sequentially and 19% year-over-year (see the company’s definition of annual recurring revenue below).
Transaction revenue was up 15%, increasing to $7.7 million, compared to $6.7 million in the fourth quarter of fiscal 2022. Transaction customers count for the quarter was 1,404, compared to 1,213 customers in the prior year quarter (see the company’s definition of active customer accounts and transactions below).
Total gross margin improved 110 basis points from the prior-year quarter to 39.4%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.
Total operating expenses were approximately $3.7 million, a $62,000 decrease from the fourth quarter of 2022. The decrease was primarily due to lower sales and marketing expenses.
Net income in the fourth quarter was $376,000, or one cent per diluted share, compared to a net loss of ($438,000), or two cents per share, in the prior-year quarter. Adjusted EBITDA was $825,000, compared to ($121,000) in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).
Full-Year Fiscal 2023 Results
Total revenue increased 14% to $37.7 million, compared to $32.9 million in fiscal 2022.
Platform subscription revenue was $8.7 million, a 28% increase over the prior year. The increase was due to upselling current platform customers and an increase in the total number of paid Platform deployments.
Transaction revenue was $29.0 million, an 11% increase compared to the previous year. The increase is primarily due to organic growth and also the acquisition of certain customer contracts from FIZ Karlsruhe which became effective in the third quarter of fiscal 2023.
Total gross margin improved 250 basis points over the prior year to 39.0%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.
Total operating expenses were $14.5 million compared to $13.7 million in the prior year. The increase was primarily due to higher stock compensation expense related to the transition to a new program that the Company views as better aligned with shareholders’ interests.
Net income for fiscal year 2023 was $572,000, or $0.02 per diluted share. Net loss in fiscal 2022 was $1.6 million, or ($0.06) per share. Adjusted EBITDA for fiscal 2023 was a positive $2.0 million, compared to a negative $374,000 in the prior year (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).
Cash and cash equivalents on June 30, 2023, amounted to $13.5 million compared to $10.6 million as of June 30, 2022. There were no outstanding borrowings under the company’s $2.5 million revolving line of credit and the company had no long-term liabilities or other debt.
Conference Call
Research Solutions President and CEO Roy W. Olivier and CFO Bill Nurthen will host the conference call, followed by a question and answer period.
Date: Wednesday, September 13, 2023Time: 5:00 p.m. ET (2:00 p.m. PT)Dial-in number: 1-412-317-5180Conference ID: 10182138
The conference call will be broadcast live and available for replay until October 13, 2023, by dialing 1-412-317-6671 and using the replay ID 10182138, and via the investor relations section of the company’s website at http://researchsolutions.investorroom.com/.
Fiscal Fourth Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter
Quarter Ended June 30,
2023
2022
Change
% Change
Revenue:
Platforms
$ 2,303,375
$ 1,886,845
$     416,530
22.1 %
Transactions
$ 7,656,342
$ 6,675,164
981,178
14.7 %
Total Revenue
9,959,717
8,562,009
1,397,708
16.3 %
Gross Profit:
Platforms
2,028,265
1,646,631
381,634
23.2 %
Transactions
1,892,278
1,636,511
255,767
15.6 %
Total Gross Profit
3,920,543
3,283,142
637,401
19.4 %
Gross profit as a % of revenue:
Platforms
88.1 %
87.3 %
0.8 %
Transactions
24.7 %
24.5 %
0.2 %
Total Gross Profit
39.4 %
38.3 %
1.0 %
Operating Expenses:
Sales and marketing
455,030
691,368
(236,338)
-34.2 %
Technology and product development
991,093
1,049,430
(58,337)
-5.6 %
General and administrative
1,649,333
1,663,671
(14,339)
-0.9 %
Depreciation and amortization
22,163
5,507
16,656
302.5 %
Stock-based compensation
585,384
225,501
359,883
159.6 %
Foreign currency translation loss
(37,743)
91,279
(129,022)
NM
Total Operating Expenses
3,665,260
3,726,756
(61,497)
-1.7 %
Income (loss) from operations
255,283
(443,614)
698,897
157.5 %
Other Income (Expenses):
Other income (expense)
120,522
6,377
114,145
NM
Provision for income taxes
(59)
(1,030)
971
-94.3 %
Total Other Income (Expenses):
120,463
5,347
115,116
NM
Net income (loss)
$     375,746
$   (438,267)
814,013
185.7 %
Adjusted EBITDA
$     825,087
$   (121,327)
$     946,414
NM
Quarter Ended June 30,
2023
2022
Change
% Change
Platforms:
ARR (Annual recurring revenue):
  Beginning of Period
$ 9,107,681
$ 7,348,847
$ 1,758,834
23.9 %
   Incremental ARR
336,449
573,341
(236,892)
-41.3 %
  End of Period
$ 9,444,130
$ 7,922,188
$ 1,521,942
19.2 %
Deployments:
  Beginning of Period
815
680
135
19.9 %
   Incremental Deployments
20
53
(33)
-62.3 %
  End of Period
835
733
102
13.9 %
ASP (Average sales price):
  Beginning of Period
$       11,175
$       10,807
$             368
3.4 %
  End of Period
$       11,310
$       10,808
$             502
4.6 %
Transaction Customers:
Corporate customers
1,090
920
170
18.5 %
Academic customers
314
293
21
7.2 %
Total customers
1,404
1,213
191
15.7 %
Fiscal Full Year Financial and Operational Summary Tables vs. Prior-Year
Twelve Months Ended June 30,
2023
2022
Change
% Change
Revenue:
Platforms
$   8,683,246
$   6,787,772
$  1,895,474
27.9 %
Transactions
$ 29,020,206
$ 26,146,380
2,873,826
11.0 %
Total Revenue
37,703,452
32,934,152
4,769,300
14.5 %
Gross Profit:
Platforms
7,655,960
5,851,183
1,804,777
30.8 %
Transactions
7,044,931
6,168,491
876,440
14.2 %
Total Gross Profit
14,700,891
12,019,674
2,681,217
22.3 %
Gross profit as a % of revenue:
Platforms
88.2 %
86.2 %
2.0 %
Transactions
24.3 %
23.6 %
0.7 %
Total Gross Profit
39.0 %
36.5 %
2.5 %
Operating Expenses:
Sales and marketing
2,285,478
2,276,172
9,306
0.4 %
Technology and product development
3,742,192
3,711,085
31,107
0.8 %
General and administrative
6,654,012
6,406,400
247,612
3.9 %
Depreciation and amortization
52,649
17,651
34,998
198.3 %
Stock-based compensation
1,849,906
1,096,384
753,522
68.7 %
Foreign currency translation loss
(121,953)
143,898
(265,851)
NM
Total Operating Expenses
14,462,284
13,651,590
810,694
5.9 %
Income (loss) from operations
238,608
(1,631,916)
1,870,523
114.6 %
Other Income (Expenses):
Other income (expense)
338,617
7,154
331,463
NM
Provision for income taxes
(5,602)
(7,622)
2,020
-26.5 %
Total Other Income (Expenses):
333,015
(468)
333,483
NM
Net income (loss)
$       571,623
$  (1,632,384)
2,204,006
135.0 %
Adjusted EBITDA
$   2,019,210
$     (373,983)
$  2,393,192
NM
Twelve Months Ended June 30,
2023
2022
Change
% Change
Platforms:
ARR (Annual recurring revenue):
  Beginning of Period
$   7,922,188
$   5,880,179
$  2,042,009
34.7 %
   Incremental ARR
1,521,942
2,042,009
(520,067)
-25.5 %
  End of Period
$   9,444,130
$   7,922,188
$  1,521,942
19.2 %
Deployments:
  Beginning of Period
733
553
180
32.5 %
   Incremental Deployments
102
180
(78)
-43.3 %
  End of Period
835
733
102
13.9 %
ASP (Average sales price):
  Beginning of Period
$         10,808
$         10,633
$              175
1.6 %
  End of Period
$         11,310
$         10,808
$              502
4.6 %
Transaction Customers:
Corporate customers
1,012
886
126
14.2 %
Academic customers
304
299
5
1.6 %
Total customers
1,316
1,185
131
11.1 %
Active Customer Accounts, Transactions and Annual Recurring Revenue
The company defines active customer accounts as the sum of the total quantity of customers per month for each month in the period divided by the respective number of months in the period. The quantity of customers per month is defined as customers with at least one transaction during the month.
A transaction is an order for a unit of copyrighted content fulfilled or managed in the Platform.
The company defines annual recurring revenue as the value of contracted Platform subscription recurring revenue normalized to a one-year period.
Use of Non-GAAP Measure – Adjusted EBITDA
Research Solutions’ management evaluates and makes operating decisions using various financial metrics. In addition to the company’s GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the company’s operating results.
The tables below provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. Adjusted EBITDA is defined as net income (loss), plus interest expense, other income (expense), foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, gain on sale of discontinued operations, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):
Quarter Ended June 30,
2023
2022
Change
% Change
Net Income (loss)
$     375,746
$   (438,267)
$     814,013
185.7 %
 Add (deduct):
Other income (expense)
(120,522)
(6,377)
(114,145)
NM
Foreign currency translation loss
(37,743)
91,279
(129,022)
-141.3 %
Provision for income taxes
59
1,030
(971)
-94.3 %
Depreciation and amortization
22,163
5,507
16,656
302.5 %
Stock-based compensation
585,384
225,501
359,883
159.6 %
 Adjusted EBITDA
$     825,087
$   (121,327)
$     946,414
NM
 
Twelve Months Ended June 30,
2023
2022
Change
% Change
Net Income (loss)
$       571,623
$  (1,632,384)
$  2,204,006
135.0 %
 Add (deduct):

Other income (expense)
(338,617)
(7,154)
(331,463)
NM
Foreign currency translation loss
(121,953)
143,898
(265,851)
-184.7 %
Provision for income taxes
5,602
7,622
(2,020)
-26.5 %
Depreciation and amortization
52,649
17,651
34,998
198.3 %
Stock-based compensation
1,849,906
1,096,384
753,522
68.7 %
 Adjusted EBITDA
$   2,019,210
$     (373,983)
$  2,393,192
NM
About Research Solutions 
Research Solutions, Inc. (NASDAQ: RSSS) provides cloud-based technologies to streamline the process of obtaining, managing, and creating intellectual property. Founded in 2006 as Reprints Desk, the company was a pioneer in developing solutions to serve researchers. Today, more than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, the company’s SaaS research platform, to streamline access to the latest scientific research and data with 24/7 customer support. For more information and details, please visit www.researchsolutions.com and www.reprintsdesk.com
Important Cautions Regarding Forward-Looking Statements
Certain statements in this press release may contain “forward-looking statements” regarding future events and our future results. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the markets in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects”, “intends,” “plans,” “believes,” “seeks,” “estimates,” “endeavors,” “strives,” “may,” or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Such risks and uncertainties include those factors described in the Company’s most recent annual report on Form 10-K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports filed with the Securities and Exchange Commission. Examples of forward-looking statements in this release include statements regarding improved product offerings and cross-selling opportunities, ,  management’s optimistic outlook for fiscal 2024, and the Company’s prospects for growth. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. For more information, please refer to the Company’s filings with the Securities and Exchange Commission. 
Research Solutions, Inc. and SubsidiariesConsolidated Balance Sheets
June 30, 
June 30, 
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
13,545,333
$
10,603,175
Accounts receivable, net of allowance of $85,015 and $94,144, respectively
6,153,063
5,251,545
Prepaid expenses and other current assets
400,340
276,026
Prepaid royalties
1,202,678
846,652
Total current assets
21,301,414
16,977,398
Other assets:
Property and equipment, net of accumulated depreciation of $881,908 and $840,996, respectively
70,193
47,985
Intangible assets, net of accumulated amortization of $747,355 and $723,036, respectively
462,068

Deposits and other assets
1,052
893
Total assets
$
21,834,727
$
17,026,276
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses
$
8,079,516
$
6,604,032
Deferred revenue
6,424,724
5,538,526
Total current liabilities
14,504,240
12,142,558
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued and outstanding


Common stock; $0.001 par value; 100,000,000 shares authorized; 29,487,508 and27,075,648 shares issued and outstanding, respectively
29,487
27,076
Additional paid-in capital
29,941,873
28,072,855
Accumulated deficit
(22,522,649)
(23,094,272)
Accumulated other comprehensive loss
(118,224)
(121,941)
Total stockholders’ equity
7,330,487
4,883,718
Total liabilities and stockholders’ equity
$
21,834,727
$
17,026,276
 
Research Solutions, Inc. and SubsidiariesConsolidated Statements of Operations and Other Comprehensive Loss
Years Ended
June 30, 
2023
2022
Revenue:
Platforms
$
8,683,246
$
6,787,772
Transactions
29,020,206
26,146,380
Total revenue
37,703,452
32,934,152
Cost of revenue:
Platforms
1,027,286
936,589
Transactions
21,975,275
19,977,889
Total cost of revenue
23,002,561
20,914,478
Gross profit
14,700,891
12,019,674
Operating expenses:
Selling, general and administrative
14,409,634
13,633,939
Depreciation and amortization
52,649
17,651
Total operating expenses
14,462,283
13,651,590
Income (loss) from operations
238,608
(1,631,916)
Other income
338,617
7,154
Income (loss) from operations before provision for income taxes
577,225
(1,624,762)
Provision for income taxes
(5,602)
(7,622)
Net income (loss)
571,623
(1,632,384)
Other comprehensive income (loss):
Foreign currency translation
3,717
(2,364)
Comprehensive income (loss)
$
575,340
$
(1,634,748)
Basic income (loss) per common share:
Net income (loss) per share
$
0.02
$
(0.06)
Weighted average common shares outstanding
26,860,761
26,422,295
Diluted income (loss) per common share:
Net income (loss) per share
$
0.02
$
(0.06)
Weighted average common shares outstanding
29,139,759
26,422,295
 
Research Solutions, Inc. and SubsidiariesConsolidated Statements of Cash Flows
Years Ended
June 30, 
2023
2022
Cash flow from operating activities:
Net income (loss)
$
571,623
$
(1,632,384)
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
52,649
17,651
Fair value of vested stock options
375,189
470,615
Fair value of vested restricted common stock
1,418,718
557,496
Fair value of vested unrestricted common stock
68,272

Modification cost of stock options
56,000

Changes in operating assets and liabilities:
Accounts receivable
(901,518)
(534,092)
Prepaid expenses and other current assets
(124,314)
(5,774)
Prepaid royalties
(356,026)
58,269
Accounts payable and accrued expenses
1,337,056
(83,156)
Deferred revenue
886,198
734,175
Net cash provided by (used in) operating activities
3,383,847
(417,200)
Cash flow from investing activities:
Purchase of property and equipment
(47,209)
(44,288)
Payment for non-refundable deposit for asset acquisition
(297,450)

Net cash used in investing activities
(344,659)
(44,288)
Cash flow from financing activities:
Proceeds from the exercise of stock options
57,500
97,688
Proceeds from the exercise of warrants

59,500
Common stock repurchase
(104,250)
(93,918)
Payment of contingent acquisition consideration
(50,509)

Net cash provided by (used in) financing activities
(97,259)
63,270
Effect of exchange rate changes
229
(2,944)
Net increase (decrease) in cash and cash equivalents
2,942,158
(401,162)
Cash and cash equivalents, beginning of period
10,603,175
11,004,337
Cash and cash equivalents, end of period
$
13,545,333
$
10,603,175
Supplemental disclosures of cash flow information:
Cash paid for income taxes
$
5,602
$
7,622
Non-cash investing and financing activities:
Contingent consideration accrual on asset acquisition
$
138,428
$

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SOURCE Research Solutions, Inc. 

Reports Full-Year GAAP Net Income, Record Adjusted EBITDA and 28% Increase in Platform Revenue

HENDERSON, Nev., Sept. 13, 2023 /PRNewswire/ — Research Solutions, Inc. (NASDAQ: RSSS), a pioneer in providing cloud-based workflow solutions for R&D driven organizations, reported financial results for its fiscal fourth quarter and full year ended June 30, 2023.

Fiscal Fourth Quarter 2023 Summary

Total revenue increased 16% to $10.0 millionPlatform revenue up 22% to $2.3 million; Annual recurring revenue up 19% to $9.4 millionGross profit up 19% to the prior-year quarter; Total gross margin improved 110 basis points to 39.4%Net income of $375,746 or one cent per diluted share, compared to a net loss of ($438,267) or one cent per share in the prior-year quarterAdjusted EBITDA of $825,087 compared to ($121,327) in the same period a year agoCash flow from operations of $1.5 million compared to slightly negative cash flow in the prior-year quarter

Full-Year Fiscal 2023 Summary

Total revenue increased 14% to $37.7 millionPlatform revenue of $8.7 million, a 28% increase, with a 14% increase in total deployments to 835Total gross margin increased 250 basis points to 39.0%Net income of $0.6 million, or $0.02 per diluted share, compared to a net loss of $1.6 million or  ($0.06) per share in the prior yearAdjusted EBITDA of $2.0 million compared to ($0.4 million) in the previous yearCash flow from operations of $3.4 million, compared to ($0.4 million) in the previous year

Items Subsequent to End of Fiscal 2023

Acquired ResoluteAI, a developer of advanced search and discovery toolsEngaged Jeremy Murphy as an advisor and observer to the Board of Directors

“Fiscal year 2023 was an exciting year for our business.  Our results represent the significant progress made across our organization, highlighted by our highest annual organic revenue growth in more than a decade and first year of GAAP profitability since fiscal 2015,” said Roy W. Olivier, President and CEO of Research Solutions. “Our customers continue to recognize the greater efficiency and cost savings offered through our Article Galaxy platform and our recent acquisition of ResoluteAI expands these offerings and capabilities, providing us with meaningful cross-selling opportunities.  While we continue to see headwinds in the platform business, we are optimistic about our fiscal year 2024 and look to continue to grow the business organically as well as through strategic M&A.”

Fiscal Fourth Quarter 2023 Results

Total revenue increased 16% to $10.0 million, compared to $8.6 million in the same year-ago quarter.

Platform subscription revenue increased 22% to $2.3 million compared to approximately $1.9 million in the year-ago quarter. The increase was primarily due to an increase in upsell activity within our existing customer base and an increase in the total number of paid Platform deployments, including 20 added in the quarter. The quarter ended with annual recurring revenue of $9.4 million, up 4% sequentially and 19% year-over-year (see the company’s definition of annual recurring revenue below).

Transaction revenue was up 15%, increasing to $7.7 million, compared to $6.7 million in the fourth quarter of fiscal 2022. Transaction customers count for the quarter was 1,404, compared to 1,213 customers in the prior year quarter (see the company’s definition of active customer accounts and transactions below).

Total gross margin improved 110 basis points from the prior-year quarter to 39.4%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.

Total operating expenses were approximately $3.7 million, a $62,000 decrease from the fourth quarter of 2022. The decrease was primarily due to lower sales and marketing expenses.

Net income in the fourth quarter was $376,000, or one cent per diluted share, compared to a net loss of ($438,000), or two cents per share, in the prior-year quarter. Adjusted EBITDA was $825,000, compared to ($121,000) in the year-ago quarter (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Full-Year Fiscal 2023 Results

Total revenue increased 14% to $37.7 million, compared to $32.9 million in fiscal 2022.

Platform subscription revenue was $8.7 million, a 28% increase over the prior year. The increase was due to upselling current platform customers and an increase in the total number of paid Platform deployments.

Transaction revenue was $29.0 million, an 11% increase compared to the previous year. The increase is primarily due to organic growth and also the acquisition of certain customer contracts from FIZ Karlsruhe which became effective in the third quarter of fiscal 2023.

Total gross margin improved 250 basis points over the prior year to 39.0%. The increase was primarily driven by a continued revenue mix shift to the higher-margin Platform business.

Total operating expenses were $14.5 million compared to $13.7 million in the prior year. The increase was primarily due to higher stock compensation expense related to the transition to a new program that the Company views as better aligned with shareholders’ interests.

Net income for fiscal year 2023 was $572,000, or $0.02 per diluted share. Net loss in fiscal 2022 was $1.6 million, or ($0.06) per share. Adjusted EBITDA for fiscal 2023 was a positive $2.0 million, compared to a negative $374,000 in the prior year (see definition and further discussion about the presentation of Adjusted EBITDA, a non-GAAP term, below).

Cash and cash equivalents on June 30, 2023, amounted to $13.5 million compared to $10.6 million as of June 30, 2022. There were no outstanding borrowings under the company’s $2.5 million revolving line of credit and the company had no long-term liabilities or other debt.

Conference Call

Research Solutions President and CEO Roy W. Olivier and CFO Bill Nurthen will host the conference call, followed by a question and answer period.

Date: Wednesday, September 13, 2023
Time: 5:00 p.m. ET (2:00 p.m. PT)
Dial-in number: 1-412-317-5180
Conference ID: 10182138

The conference call will be broadcast live and available for replay until October 13, 2023, by dialing 1-412-317-6671 and using the replay ID 10182138, and via the investor relations section of the company’s website at http://researchsolutions.investorroom.com/.

Fiscal Fourth Quarter Financial and Operational Summary Tables vs. Prior-Year Quarter

Quarter Ended June 30,

2023

2022

Change

% Change

Revenue:

Platforms

$ 2,303,375

$ 1,886,845

$     416,530

22.1 %

Transactions

$ 7,656,342

$ 6,675,164

981,178

14.7 %

Total Revenue

9,959,717

8,562,009

1,397,708

16.3 %

Gross Profit:

Platforms

2,028,265

1,646,631

381,634

23.2 %

Transactions

1,892,278

1,636,511

255,767

15.6 %

Total Gross Profit

3,920,543

3,283,142

637,401

19.4 %

Gross profit as a % of revenue:

Platforms

88.1 %

87.3 %

0.8 %

Transactions

24.7 %

24.5 %

0.2 %

Total Gross Profit

39.4 %

38.3 %

1.0 %

Operating Expenses:

Sales and marketing

455,030

691,368

(236,338)

-34.2 %

Technology and product development

991,093

1,049,430

(58,337)

-5.6 %

General and administrative

1,649,333

1,663,671

(14,339)

-0.9 %

Depreciation and amortization

22,163

5,507

16,656

302.5 %

Stock-based compensation

585,384

225,501

359,883

159.6 %

Foreign currency translation loss

(37,743)

91,279

(129,022)

NM

Total Operating Expenses

3,665,260

3,726,756

(61,497)

-1.7 %

Income (loss) from operations

255,283

(443,614)

698,897

157.5 %

Other Income (Expenses):

Other income (expense)

120,522

6,377

114,145

NM

Provision for income taxes

(59)

(1,030)

971

-94.3 %

Total Other Income (Expenses):

120,463

5,347

115,116

NM

Net income (loss)

$     375,746

$   (438,267)

814,013

185.7 %

Adjusted EBITDA

$     825,087

$   (121,327)

$     946,414

NM

Quarter Ended June 30,

2023

2022

Change

% Change

Platforms:

ARR (Annual recurring revenue):

  Beginning of Period

$ 9,107,681

$ 7,348,847

$ 1,758,834

23.9 %

   Incremental ARR

336,449

573,341

(236,892)

-41.3 %

  End of Period

$ 9,444,130

$ 7,922,188

$ 1,521,942

19.2 %

Deployments:

  Beginning of Period

815

680

135

19.9 %

   Incremental Deployments

20

53

(33)

-62.3 %

  End of Period

835

733

102

13.9 %

ASP (Average sales price):

  Beginning of Period

$       11,175

$       10,807

$             368

3.4 %

  End of Period

$       11,310

$       10,808

$             502

4.6 %

Transaction Customers:

Corporate customers

1,090

920

170

18.5 %

Academic customers

314

293

21

7.2 %

Total customers

1,404

1,213

191

15.7 %

Fiscal Full Year Financial and Operational Summary Tables vs. Prior-Year

Twelve Months Ended June 30,

2023

2022

Change

% Change

Revenue:

Platforms

$   8,683,246

$   6,787,772

$  1,895,474

27.9 %

Transactions

$ 29,020,206

$ 26,146,380

2,873,826

11.0 %

Total Revenue

37,703,452

32,934,152

4,769,300

14.5 %

Gross Profit:

Platforms

7,655,960

5,851,183

1,804,777

30.8 %

Transactions

7,044,931

6,168,491

876,440

14.2 %

Total Gross Profit

14,700,891

12,019,674

2,681,217

22.3 %

Gross profit as a % of revenue:

Platforms

88.2 %

86.2 %

2.0 %

Transactions

24.3 %

23.6 %

0.7 %

Total Gross Profit

39.0 %

36.5 %

2.5 %

Operating Expenses:

Sales and marketing

2,285,478

2,276,172

9,306

0.4 %

Technology and product development

3,742,192

3,711,085

31,107

0.8 %

General and administrative

6,654,012

6,406,400

247,612

3.9 %

Depreciation and amortization

52,649

17,651

34,998

198.3 %

Stock-based compensation

1,849,906

1,096,384

753,522

68.7 %

Foreign currency translation loss

(121,953)

143,898

(265,851)

NM

Total Operating Expenses

14,462,284

13,651,590

810,694

5.9 %

Income (loss) from operations

238,608

(1,631,916)

1,870,523

114.6 %

Other Income (Expenses):

Other income (expense)

338,617

7,154

331,463

NM

Provision for income taxes

(5,602)

(7,622)

2,020

-26.5 %

Total Other Income (Expenses):

333,015

(468)

333,483

NM

Net income (loss)

$       571,623

$  (1,632,384)

2,204,006

135.0 %

Adjusted EBITDA

$   2,019,210

$     (373,983)

$  2,393,192

NM

Twelve Months Ended June 30,

2023

2022

Change

% Change

Platforms:

ARR (Annual recurring revenue):

  Beginning of Period

$   7,922,188

$   5,880,179

$  2,042,009

34.7 %

   Incremental ARR

1,521,942

2,042,009

(520,067)

-25.5 %

  End of Period

$   9,444,130

$   7,922,188

$  1,521,942

19.2 %

Deployments:

  Beginning of Period

733

553

180

32.5 %

   Incremental Deployments

102

180

(78)

-43.3 %

  End of Period

835

733

102

13.9 %

ASP (Average sales price):

  Beginning of Period

$         10,808

$         10,633

$              175

1.6 %

  End of Period

$         11,310

$         10,808

$              502

4.6 %

Transaction Customers:

Corporate customers

1,012

886

126

14.2 %

Academic customers

304

299

5

1.6 %

Total customers

1,316

1,185

131

11.1 %

Active Customer Accounts, Transactions and Annual Recurring Revenue

The company defines active customer accounts as the sum of the total quantity of customers per month for each month in the period divided by the respective number of months in the period. The quantity of customers per month is defined as customers with at least one transaction during the month.

A transaction is an order for a unit of copyrighted content fulfilled or managed in the Platform.

The company defines annual recurring revenue as the value of contracted Platform subscription recurring revenue normalized to a one-year period.

Use of Non-GAAP Measure – Adjusted EBITDA

Research Solutions’ management evaluates and makes operating decisions using various financial metrics. In addition to the company’s GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP measure provides useful information about the company’s operating results.

The tables below provide a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. Adjusted EBITDA is defined as net income (loss), plus interest expense, other income (expense), foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, gain on sale of discontinued operations, and other potential adjustments that may arise. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

Quarter Ended June 30,

2023

2022

Change

% Change

Net Income (loss)

$     375,746

$   (438,267)

$     814,013

185.7 %

 Add (deduct):

Other income (expense)

(120,522)

(6,377)

(114,145)

NM

Foreign currency translation loss

(37,743)

91,279

(129,022)

-141.3 %

Provision for income taxes

59

1,030

(971)

-94.3 %

Depreciation and amortization

22,163

5,507

16,656

302.5 %

Stock-based compensation

585,384

225,501

359,883

159.6 %

 Adjusted EBITDA

$     825,087

$   (121,327)

$     946,414

NM

 

Twelve Months Ended June 30,

2023

2022

Change

% Change

Net Income (loss)

$       571,623

$  (1,632,384)

$  2,204,006

135.0 %

 Add (deduct):

Other income (expense)

(338,617)

(7,154)

(331,463)

NM

Foreign currency translation loss

(121,953)

143,898

(265,851)

-184.7 %

Provision for income taxes

5,602

7,622

(2,020)

-26.5 %

Depreciation and amortization

52,649

17,651

34,998

198.3 %

Stock-based compensation

1,849,906

1,096,384

753,522

68.7 %

 Adjusted EBITDA

$   2,019,210

$     (373,983)

$  2,393,192

NM

About Research Solutions 

Research Solutions, Inc. (NASDAQ: RSSS) provides cloud-based technologies to streamline the process of obtaining, managing, and creating intellectual property. Founded in 2006 as Reprints Desk, the company was a pioneer in developing solutions to serve researchers. Today, more than 70 percent of the top pharmaceutical companies, prestigious universities, and emerging businesses rely on Article Galaxy, the company’s SaaS research platform, to streamline access to the latest scientific research and data with 24/7 customer support. For more information and details, please visit www.researchsolutions.com and www.reprintsdesk.com

Important Cautions Regarding Forward-Looking Statements

Certain statements in this press release may contain “forward-looking statements” regarding future events and our future results. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the markets in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects”, “intends,” “plans,” “believes,” “seeks,” “estimates,” “endeavors,” “strives,” “may,” or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward-looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Such risks and uncertainties include those factors described in the Company’s most recent annual report on Form 10-K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports filed with the Securities and Exchange Commission. Examples of forward-looking statements in this release include statements regarding improved product offerings and cross-selling opportunities, ,  management’s optimistic outlook for fiscal 2024, and the Company’s prospects for growth. Readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements. For more information, please refer to the Company’s filings with the Securities and Exchange Commission. 

Research Solutions, Inc. and Subsidiaries
Consolidated Balance Sheets

June 30, 

June 30, 

2023

2022

Assets

Current assets:

Cash and cash equivalents

$

13,545,333

$

10,603,175

Accounts receivable, net of allowance of $85,015 and $94,144, respectively

6,153,063

5,251,545

Prepaid expenses and other current assets

400,340

276,026

Prepaid royalties

1,202,678

846,652

Total current assets

21,301,414

16,977,398

Other assets:

Property and equipment, net of accumulated depreciation of $881,908
and $840,996, respectively

70,193

47,985

Intangible assets, net of accumulated amortization of $747,355 and $723,036,
respectively

462,068

Deposits and other assets

1,052

893

Total assets

$

21,834,727

$

17,026,276

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

$

8,079,516

$

6,604,032

Deferred revenue

6,424,724

5,538,526

Total current liabilities

14,504,240

12,142,558

Commitments and contingencies

Stockholders’ equity:

Preferred stock; $0.001 par value; 20,000,000 shares authorized; no shares issued
and outstanding

Common stock; $0.001 par value; 100,000,000 shares authorized; 29,487,508 and
27,075,648 shares issued and outstanding, respectively

29,487

27,076

Additional paid-in capital

29,941,873

28,072,855

Accumulated deficit

(22,522,649)

(23,094,272)

Accumulated other comprehensive loss

(118,224)

(121,941)

Total stockholders’ equity

7,330,487

4,883,718

Total liabilities and stockholders’ equity

$

21,834,727

$

17,026,276

 

Research Solutions, Inc. and Subsidiaries
Consolidated Statements of Operations and Other Comprehensive Loss

Years Ended

June 30, 

2023

2022

Revenue:

Platforms

$

8,683,246

$

6,787,772

Transactions

29,020,206

26,146,380

Total revenue

37,703,452

32,934,152

Cost of revenue:

Platforms

1,027,286

936,589

Transactions

21,975,275

19,977,889

Total cost of revenue

23,002,561

20,914,478

Gross profit

14,700,891

12,019,674

Operating expenses:

Selling, general and administrative

14,409,634

13,633,939

Depreciation and amortization

52,649

17,651

Total operating expenses

14,462,283

13,651,590

Income (loss) from operations

238,608

(1,631,916)

Other income

338,617

7,154

Income (loss) from operations before provision for income taxes

577,225

(1,624,762)

Provision for income taxes

(5,602)

(7,622)

Net income (loss)

571,623

(1,632,384)

Other comprehensive income (loss):

Foreign currency translation

3,717

(2,364)

Comprehensive income (loss)

$

575,340

$

(1,634,748)

Basic income (loss) per common share:

Net income (loss) per share

$

0.02

$

(0.06)

Weighted average common shares outstanding

26,860,761

26,422,295

Diluted income (loss) per common share:

Net income (loss) per share

$

0.02

$

(0.06)

Weighted average common shares outstanding

29,139,759

26,422,295

 

Research Solutions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

Years Ended

June 30, 

2023

2022

Cash flow from operating activities:

Net income (loss)

$

571,623

$

(1,632,384)

Adjustment to reconcile net income (loss) to net cash provided by (used in)
operating activities:

Depreciation and amortization

52,649

17,651

Fair value of vested stock options

375,189

470,615

Fair value of vested restricted common stock

1,418,718

557,496

Fair value of vested unrestricted common stock

68,272

Modification cost of stock options

56,000

Changes in operating assets and liabilities:

Accounts receivable

(901,518)

(534,092)

Prepaid expenses and other current assets

(124,314)

(5,774)

Prepaid royalties

(356,026)

58,269

Accounts payable and accrued expenses

1,337,056

(83,156)

Deferred revenue

886,198

734,175

Net cash provided by (used in) operating activities

3,383,847

(417,200)

Cash flow from investing activities:

Purchase of property and equipment

(47,209)

(44,288)

Payment for non-refundable deposit for asset acquisition

(297,450)

Net cash used in investing activities

(344,659)

(44,288)

Cash flow from financing activities:

Proceeds from the exercise of stock options

57,500

97,688

Proceeds from the exercise of warrants

59,500

Common stock repurchase

(104,250)

(93,918)

Payment of contingent acquisition consideration

(50,509)

Net cash provided by (used in) financing activities

(97,259)

63,270

Effect of exchange rate changes

229

(2,944)

Net increase (decrease) in cash and cash equivalents

2,942,158

(401,162)

Cash and cash equivalents, beginning of period

10,603,175

11,004,337

Cash and cash equivalents, end of period

$

13,545,333

$

10,603,175

Supplemental disclosures of cash flow information:

Cash paid for income taxes

$

5,602

$

7,622

Non-cash investing and financing activities:

Contingent consideration accrual on asset acquisition

$

138,428

$

View original content to download multimedia:https://www.prnewswire.com/news-releases/research-solutions-announces-fiscal-fourth-quarter-and-full-year-2023-results-301926917.html

SOURCE Research Solutions, Inc.

 

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