Research Solutions Inc (RSSS) Q4 2024 Earnings Report

RSSS delivered a transformational Q4 and a strong full-year 2024, marked by a strategic post-transaction uplift from Resolute.ai and Scite acquisitions and a meaningful shift in revenue mix toward higher-margin platform offerings. In Q4 2024, total revenue rose to $12.13 million, up 22% year over year, with platform subscription revenue up 86% to approximately $4.3 million. For the full year, revenue reached $44.6 million, an 18% increase from 2023, supported by a platform gross margin of 85.3% within an overall gross margin of 46.0% (44% full year). ARR stood at $17.4 million at year-end, up 84% YoY, with platform customers exceeding 1,000 for the first time. Net income remained negative in Q4 2024 (-$2.82 million) due to one-time earn-out accounting, while Adjusted EBITDA reached a quarterly record of $1.40 million and annual EBITDA of $2.2 million. The company maintained a robust liquidity profile, ending the year with $6.1 million in cash and no debt. Management emphasized a deliberate, cross-sell-led growth strategy and a bifurcated go-to-market (corporate vs. academic) to accelerate expansion in both enterprise and university libraries. Near-term guidance acknowledged seasonality and longer sales cycles, particularly in B2B, with ARR growth expected to moderate in Q1 2025, although pipelines remain strong and long-term profitability remains intact. The investment thesis centers on (i) a scalable platform that blends discovery (Scite/Resolute) with access and literature management (Article Galaxy/Scholar), (ii) ongoing M&A optionality at compelling valuations, and (iii) a path to higher EBITDA as the platform mix continues to dominate revenue mix. Despite macro headwinds, RSSS appears positioned to monetize cross-sell opportunities and leverage the AI-enabled capabilities of its unified research platform over multiple fiscal years.