Research Solutions' Q3 2025 Results: A Pivot to Platform Dominance Pays Off

Research Solutions (NASDAQ: RSSS) has delivered a quarter that underscores its transition from transactional revenue reliance to a high-margin, recurring revenue model. Fiscal Q3 2025 results reveal a company gaining traction in its AI-driven SaaS strategy, with record metrics across profitability, customer adoption, and operational efficiency. Let’s dissect the numbers and assess what this means for investors.

Financial Highlights: Profitability and Margin Gains

Total revenue rose 4.5% year-over-year to $12.7 million, driven by a 22% surge in platform revenue to $4.8 million. This segment now accounts for 38% of total revenue, up from 33% in Q3 2024, signaling a structural shift toward higher-margin offerings. The

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The star performer is Annual Recurring Revenue (ARR), which soared 23% to $20.4 million, crossing the $20 million threshold for the first time. B2B ARR grew by $736,000—its largest quarterly increase ever—while B2C ARR benefited from subscriber growth and upselling. Gross margins expanded by 430 basis points to 49.5%, reflecting the profitability of platform services.

Net income turned positive at $216,000, up from $76,000 a year prior, while Adjusted EBITDA nearly doubled to $1.4 million. The trailing twelve-month Adjusted EBITDA of $5.1 million at a 10.4% margin highlights improving cash generation. Operating cash flow hit $2.9 million, a 45% increase year-over-year, reinforcing liquidity strength.

Operational Momentum: Platforms Outpace Transaction Declines

While platform momentum is strong, transaction revenue dipped to $7.8 million, down from $8.2 million in Q3 2024. Active transaction customers also fell to 1,380, but this decline appears intentional. CEO Roy Olivier framed it as part of a strategic pivot: “We’re no longer chasing low-margin transactional volume. Our focus is on high-value, recurring revenue streams.”

The company added 43 net new platform deployments in Q3, expanding its footprint in academia, life sciences, and corporate R&D. This aligns with its AI-driven offerings like Article Galaxy and acquisitions of scite (2023) and ResoluteAI, which integrate AI analytics for research workflows.

Strategic Shifts and Risks

The Q3 results validate Research Solutions’ shift toward SaaS and AI. The company is now prioritizing:
1. Cross-selling: Leveraging existing customers for upsells (e.g., B2C subscriptions to B2B enterprise solutions).
2. Product Innovation: Expanding AI tools like clinical trial analysis and tech landscape reports, which command premium pricing.
3. Efficiency: Gross margin improvements suggest cost controls are working, even as sales and marketing spending rose.

However, risks remain. Transaction revenue’s decline could continue, and competition in AI research tools is intensifying. Regulatory scrutiny of data usage in AI, particularly in healthcare and academia, could also pose hurdles.

Conclusion: A Strong Foundation for Growth

Research Solutions’ Q3 results mark a pivotal milestone. The 23% ARR growth, 49.5% gross margins, and positive net income demonstrate that its pivot to AI-powered SaaS is paying off. The company’s focus on recurring revenue, operational discipline, and strategic acquisitions positions it to capitalize on the $20 billion research workflow market.

Investors should note that the stock trades at just 2.1x trailing 12-month revenue, a valuation that could expand if ARR continues to grow at 20%+ rates. While transaction revenue headwinds linger, the shift toward high-margin platforms—and the $1.4 million EBITDA—suggests the company is building a durable, scalable business.

In short, Research Solutions is proving that AI-driven SaaS is not just a buzzword—it’s a revenue engine. For investors seeking exposure to the research tech sector, this quarter’s results are a compelling reason to take notice.