Research Solutions outlined its transition from document delivery to an AI-powered research platform at the 17th Annual Midwest IDEAS Conference, highlighting margin expansion driven by software integration.
The company, trading under NASDAQ: RSSS at $2.20 as of the report, reported platform revenue now represents 43% of total sales, up from 39% a year earlier. Platform gross margins exceed 85%, compared with 24% to 25% for document delivery services. Annual recurring revenue reached $22 million, a 144% increase over the past four years.
Chief Executive Officer Roy W. Olivier and Chief Financial Officer Dave Kutil emphasized the impact of AI connectors launched in the past six months, including integrations with ChatGPT, Claude, Copilot, and Microsoft Office 365. These tools link the company’s Scite and Article Galaxy platforms to large language models, enabling corporate and academic customers to incorporate curated research content directly into workflows.
The shift toward SaaS-based offerings has coincided with improved profitability. Research Solutions generated $6 million in EBITDA over the last 12 months and reported diluted EPS of $0.14 for the period ending Q3 2026, with management expecting net income to double year over year. The company holds $12 million in cash and maintains an untapped credit line, though its current ratio stands at 0.82 as of the latest quarter.
Customer metrics reflect steady demand, with corporate clients accounting for 80% of revenue. Pharmaceutical, medical device, and biotech sectors contribute half of total sales, while government and academic institutions make up the remainder. The company serves roughly 1,000 corporate customers across 60 industries and maintains relationships with 2,900 publishers, covering 85% of global scientific, technical, and medical content.
Deal sizes have increased alongside AI adoption, with recent contracts ranging from high five-figure to seven-figure values. Renewal rates approach 100%, and average customer lifetime value exceeds seven years, with some long-term contracts spanning 18 to 19 years.
Management acknowledged industry headwinds, including strained U.S. academic budgets and softening corporate demand, particularly in pharmaceuticals, where more than 10,000 jobs have been cut in the past six to eight months. Despite these pressures, Research Solutions remains focused on AI-driven growth, having reviewed 400 acquisition targets since Olivier’s appointment, though deal activity has slowed to assess AI’s long-term impact on the sector.
