NASDAQ:RSSS Research Solutions Q3 2026 Earnings Report $2.21 +0.06 (+2.79%) Closing price 04:00 PM EasternExtended Trading$2.22 +0.00 (+0.23%) As of 06:27 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Massive. Learn more. ProfileEarnings HistoryForecast Research Solutions EPS ResultsActual EPS$0.03Consensus EPS $0.04Beat/MissMissed by -$0.01One Year Ago EPSN/AResearch Solutions Revenue ResultsActual Revenue$12.12 millionExpected Revenue$12.37 millionBeat/MissMissed by -$250.40 thousandYoY Revenue GrowthN/AResearch Solutions Announcement DetailsQuarterQ3 2026Date5/14/2026TimeAfter Market ClosesConference Call DateThursday, May 14, 2026Conference Call Time5:00PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Research Solutions Q3 2026 Earnings Call TranscriptProvided by QuartrMay 14, 2026 ShareLink copied to clipboard.Key Takeaways Neutral Sentiment: Research Solutions reported improving EBITDA and net income in fiscal Q3, with adjusted EBITDA up 14% year over year to $1.6 million and net income rising to $860,000. Negative Sentiment: Revenue missed management’s expectations, as total revenue fell to $12.1 million from $12.7 million a year ago because platform subscription growth was more than offset by lower-margin transaction declines. Positive Sentiment: Platform subscription revenue continues to grow, increasing about 7% to $5.2 million, and platform mix rose to 43% of total revenue from 38% last year, supporting higher gross margins. Negative Sentiment: B2B churn remains the main drag on top-line growth, with 46 logos churning in the quarter versus 61 new or upsell logos, although management said most churn is controllable and not tied to AI usage. Positive Sentiment: The company highlighted AI-driven product momentum, including new MCP connectors for Scite and Article Galaxy, improved B2C retention, and a sales pipeline of more than $1 million for these new offerings. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallResearch Solutions Q3 202600:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good afternoon, everyone, and thank you for participating in today's conference call to discuss Research Solutions' financial and operating results for its fiscal 2026 third quarter ended March 31st, 2026. As a reminder, this conference is being recorded. I'd like to now turn the conference over to your host, John Beisler, Investor Relations. John BeislerVP at Three Part Advisors00:00:21Thank you, operator. Good afternoon, everyone. Thank you for joining us today for Research Solutions' third quarter fiscal year 2026 earnings call. On the call today are Roy W. Olivier, President, Chairman, and Chief Executive Officer, and Dave Kutil, Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the third quarter of fiscal 2026. The release is available on the company's website, researchsolutions.com. Before Roy and Dave begin their prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied due to a variety of factors. John BeislerVP at Three Part Advisors00:01:07We refer you to Research Solutions' recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the company's future operating results and financial condition. On today's call, management will reference certain non-GAAP financial measures which we believe provide useful information for investors. A reconciliation of those measures to GAAP measures is included in today's earnings press release as well. I would like to again remind everyone this call is being recorded and made available for replay via a link on the company's website. I would now like to turn the call over to Roy W. Olivier. Roy? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:01:47Thanks, John. The third quarter represented improving EBITDA and net income but was certainly lower than our expectations in terms of top-line growth. Churn continues to be an area that needs action, which I will talk about in more detail later in the call. New bookings were good at 61 new or upsell logos, representing $961,000 in ARR. Unfortunately, churn was 46 logos, representing $398,000 in ARR. Most of those were smaller accounts. However, there was one large account in that total that represented about $130,000. As a reminder, about one-third of churn is uncontrollable. That category is primarily driven by one of our customers being acquired, going out of business, or experience a reorg that includes eliminating the research function. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:02:44Two-thirds are controllable, and that's where our focus is, and none of it is related to, quote, AI usage, end quote. There was a lot of good news in the quarter. Academic and corporate sales were both strong. We signed sizable academic deals in Johannesburg, Singapore, and several with top U.S. universities, including my alma mater, Texas A&M. These deals are primarily scite deals. We also signed several large corporate deals at levels well above or at historic average sales price, or ASP. This is a good mix of both scite and Article Galaxy deals. About 70% of those deals are AG deals. The point is that new bookings are executing well, and I feel good about our new bookings growth. We have been using AI internally in virtually every area of the business. The product teams have seen a nice uptick in productivity as a result. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:03:45Due to this, we can now assign software development issues to AI and then have a developer check that work. This has accelerated the number of new items in each release. In addition, during the quarter, we released two new AI-based products. These are called MCPs, which stands for Model Context Protocol. You can think of an MCP as similar to a software API, but it is a connector to integrate an AI-based LLM, like ChatGPT or Claude, or an internally developed LLM into Article Galaxy or scite. This is part of our headless strategy, which means we want to be where our customers are working. I'll talk about that also more later in the call. I'll discuss all this with you in a little bit more detail, but for now, I'll have Dave walk you through the results in more detail. Dave? Dave KutilCFO at Research Solutions00:04:44Thank you, Roy, and good afternoon, everyone. Total revenue for the third quarter of fiscal 2026 was $12.1 million, compared to $12.7 million in the third quarter of fiscal 2025. Growth in platform subscription revenue was more than offset by decline in our lower margin transactions business. Our platform subscription revenue increased approximately 7% to $5.2 million. The growth was primarily driven by a net increase of 15 platform deployments over the prior year, as well as expansion within our existing customer base through upsells and cross-sells. Platform revenue accounted for about 43% of our total revenue for the quarter, compared to approximately 38% in the prior year quarter, as this mix continues to move towards the higher margin platform business. Dave KutilCFO at Research Solutions00:05:38We ended the quarter with $22.1 million in annual recurring revenue, or ARR, up 8.5% year-over-year, consisting of approximately $15.7 million in B2B ARR and approximately $6.4 million in normalized ARR associated with scite's B2C subscribers. Although it was down 7.5% year-over-year, B2C ARR has shown signs of improvement in recent months. As the MCP launch that Roy mentioned earlier has increased both conversion and retention. Net incremental platform ARR for the quarter was approximately $317,000. Please see today's press release for how we define and use annual recurring revenue and other non-GAAP items. Transaction revenue for the third quarter was $7 million, compared to $7.8 million in the prior year quarter. Dave KutilCFO at Research Solutions00:06:34The softness was driven by a previously discussed churned account and volume reductions from a small number of larger customers. It is notable that the monthly trend inside the quarter showed meaningful directional improvement, and while not a full recovery, it is an early sign of stabilization. Our total active transaction customer count for the quarter was 1,346, compared to 1,380 in the same period a year ago. Gross profit for the third quarter was $6.3 million, essentially flat with the prior year quarter from a dollar basis standpoint on lower revenue. Gross margin was 51.7%, a 220 basis point improvement over the third quarter of fiscal 2025. The increase was driven primarily by the ongoing revenue mix shift towards our higher margin platforms business. Dave KutilCFO at Research Solutions00:07:27On a trailing 12-month basis, the company's blended gross margin now stands at 51.4%. The platform business recorded a gross margin of 86.4% compared to 87.4% in the prior year quarter, reflecting modest hosting and infrastructure investment to support our AI and integration roadmap, and is still well within our high to mid 80% target range. Gross margin in our transaction business was 26%, essentially unchanged from the third quarter of fiscal 2025. Total operating expenses in the quarter were $5.2 million compared to $5.7 million in the prior year quarter. The improvement was driven primarily by lower G&A expenses and lower stock-based compensation, partially offset by continued investment in sales, marketing, and product. Dave KutilCFO at Research Solutions00:08:24This is further evidence that the company's profitability improvement is not just emanating from margin mix. It is also a function of our operating discipline. We are being deliberate about G&A spend, keeping it contained while we put resources to work against growth initiatives. We expect the discipline to translate into continued operating leverage. Net income for the quarter was $860,000, or $0.03 per diluted share, compared to net income of $216,000, or $0.01 per diluted share in the prior year quarter, an increase of approximately 297%. Adjusted EBITDA for the quarter was $1.6 million compared to $1.4 million in the year ago quarter, a 14% increase. Dave KutilCFO at Research Solutions00:09:11On a trailing 12-month basis, our adjusted EBITDA margin was 12.3%, a 220 basis points increase from the prior year quarter. Trailing 12-month adjusted EBITDA now stands at $6 million. Turning to our balance sheet, cash and cash equivalents as of quarter end were $12.1 million, essentially unchanged from our 2025 fiscal year-end, even after funding the scite earn-out payments made during the first nine months of fiscal 2026. That consisted of approximately $3.7 million in cash and the issuance of approximately 739,000 shares of stock. We ended the quarter with no outstanding borrowings on our revolving line of credit, providing additional flexibility on the balance sheet. Dave KutilCFO at Research Solutions00:10:02Cash flow from operations for the quarter were $1 million compared to $2.9 million in the prior year quarter. The decline reflects the timing of customer billings and strategic prepays rather than a change in underlying earnings power or a change in the collectibility of receivables. Trailing 12-month cash flow from operations was $5.7 million. We are entering the final quarter of fiscal 2026 with the aim of delivering adjusted EBITDA growth over the prior year, driven by continued platform subscription growth, improved retention, growing stabilization in transactions, and disciplined expense management. We expect to exit fiscal 2026 with stronger earnings power and cash generation, reinforcing the durability of our software as a service platform model and our ability to invest behind the next phase of growth. I'll now turn the call back to Roy. Roy? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:11:04Thanks, Dave. By the way, Josh, who normally attends these calls, is out today. He and his wife had a baby last week, and he's home taking care of the baby. Turning back to B2B bookings, the academic and corporate teams are doing well. As a reminder, we built out the academic-focused team back in 2025 or fiscal year 2025. The corporate team has been around for many, many years. The corporate team did well during the quarter, booking around $400,000. The academic team generated about $265,000, even though it's a seasonally slow time for them. The remainder or the balance of the new bookings was generated by the CSM upsell renewal team. While many reps on those teams are still new or in their first year, the performance on those teams is on track and improving. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:11:56As I mentioned earlier, B2B churn is the primary drag on top-line growth. We are doing several things to improve churn, including reorganizing the team, adding additional resources to that team, installing new technology to move us from reactive to proactive, as well as identifying low usage users and kicking off workflows to reengage with those users. Finally, we are improving our onboarding and training to ensure that we improve customer adoption. While this is not something that gets fixed in a quarter, I feel very good about our plan to get this back to historic levels. We'll report more on this during our next call. Turning to B2C, we have started to see some improvement from previous quarters. Product enhancements and the new AI-based solutions I previously mentioned helped reverse what was a steady decline in that business. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:12:57We saw less new trials on far less digital spend, have kept MRR about flat quarter-over-quarter. We've reduced our CAC by about 24%, and we've increased our lifetime value or LTV. We have had a good start to Q4, but keep in mind that we'll be entering the low season as universities let out for summer. That said, we have some exciting new versions of the B2C product and those are growing nicely. Product strategy and innovation are the drivers of all things for us. We've continued to improve the scite and AG products. As a reminder, we deliver scite and AG's value three ways. First is to customers that literally license the software and use it daily. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:13:49Second, we provide that same functionality and value via software APIs for customers that have internally developed their own solutions but need our unique capability at points in that workflow. The third option is the new two AI-based products that connect AI LLMs to the product. These, again, are called MCPs, and they are one-click connectors that allow the value of scite and AG to work within an LLM. They are working now with ChatGPT and Claude. We have this running for all B2C and some B2B users today. Back to our previous quarters where we talked about our headless strategies, headless strategy to be where the customer is, many of our users are starting to work in an LLM. They can ask a question of that LLM and interact with scite content in a copyright compliant way. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:14:50Once they get a fully cited answer, they can ask that LLM for the articles, and it will talk to Article Galaxy and go get that content for the user in a copyright compliant way. This basically allows an LLM to work with Article Galaxy and/or scite, again, in a copyright compliant way. This will be a big part of our future growth. The scite MCP was launched about two months ago, the AG MCP one month ago. We already have a sales pipeline of more than $1 million in opportunities for these new products. These MCPs will work with academic or corporate customers. In addition, we have integrated the Resolute databases into these MCPs. As a reminder, we purchased Resolute about two years ago, and one of the assets in that acquisition was access to over a dozen curated databases relevant to research. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:15:49We have integrated those into our MCP, so when a user asks a question in the AI tool, the tool's answer today will include patents, clinical trial, and major grant data. This means users can start and end their research journey in the AI LLM of their choice. There's a tremendous amount of excitement internally and across our customer base about these databases being integrated. We'll announce additional datasets as we add them. Integrating the unique value we can deliver with where our customers are doing research will remain the cornerstone of our strategy. In short, AI will not eliminate research, but it will change how it is accessed. Regarding document delivery or DocDel, we expect to see improvement in Q4 in terms of year-over-year performance. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:16:51As noted on earlier earnings calls, most of this decline is driven by a handful of customers. We have a large customer churn impacting the year-over-year decline, and a few other customers are doing less research than they did a year ago. Other than those customers, we are seeing increases in DocDel, particularly in OA or other free DocDel, but paid is slightly down. Regarding M&A, we continue to look for interesting opportunities and are progressing with some of those opportunities. That said, we are currently trading at 2.7-3.4 based on TTM enterprise value to revenue, depending on how you value the DocDel. This makes it challenging to pay the multiple sellers expect, which are still based on pre-SaaS software values declining due to AI concerns. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:17:46To summarize, I'm happy with the cash flow, net income, EBITDA, sales execution, and product work we did in Q3. I don't think our numbers reflect the great work we are doing in those areas. I do believe that progress will show up in future quarters and in FY 2027. Now I'll pass it over to the operator for questions. Operator? Operator00:18:10Thank you. If you'd like to ask a question, please press star one on your keypad. To leave the queue at any time, please press star two. Once again, that's star one to ask a question. We'll take our first question from Jacob Stephan with Lake Street Capital Markets. Please go ahead. Your line is open. Jacob StephanAnalyst at Lake Street Capital Markets00:18:28Yeah. Hey, guys, I appreciate you taking the questions. Roy, I guess, first, I just wanted to touch on the, on the B2B churn a little bit. You know, obviously, it sounds like a great new logo quarter, hindered by some of that churn. I guess what are the pain points of customers? You know, what are you hearing from them as reasons for the churn? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:18:53Basically, it comes down to customers that have limited engagement. In other words, we don't see a lot of usage of the platform, or they don't purchase enough articles, in Article Galaxy's case, to make the ROI work for the platform. Some cases in this economy, customers are simply looking for ways to save money. They may not be a big research organization, but they wanna cut costs associated with doing that. For us, the priorities moving forward are improving onboarding and training to ensure that at the end of a 90-day window, we have a majority of the researchers logged in, having used the product and been trained on the product. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:19:39Number two, we wanna monitor usage of the product so that when we see a cohort of customers that are not using the product, we can automatically kick off a three or four-point communication to that customer via in-product messaging and email to reengage them and get them to use the product. Number three, we know there are certain features in our product that are very high renewal features. In other words, people that use certain features in the product use it heavily, and they very rarely churn out. Just like usage, we will monitor cohorts of customers that are not using those features and kick off workflows to help them know those features are there, help them know how to use those features. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:20:26For us, a majority of that churn is related either to lack of ROI, which can come from lack of usage or can come from lower DocDel purchases, and lack of engagement on users' parts. In other words, they're not using the product as much as they had hoped. Jacob StephanAnalyst at Lake Street Capital Markets00:20:44Got it. Very helpful. Maybe just touching on the B2C side then. I know we're kinda entering a seasonally, seasonal slowdown, kind of on just as students are, you know, leaving class and everything. Maybe, you know, help me think about the improving CAC metrics. Are you spending less on marketing and still seeing better conversion? I guess, you know, numerator versus denominator, type question. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:21:13Yeah. We are spending significantly less on digital ad spend, even though we are seeing our conversion rate out of the funnel. In other words, that creates a trial user. The conversion rate's actually improved, which leads to, you know, flattish MRR on much less digital spend. Some of the things we've released, like the MCPs we've talked about, have really had a big impact on retention. We're seeing those customers stay longer, hence the improvement in lifetime value there. I think if we continue to execute there, you know, we may be able to get that thing growing again. Jacob StephanAnalyst at Lake Street Capital Markets00:22:00Got it. Dave KutilCFO at Research Solutions00:22:00Yeah. Jacob StephanAnalyst at Lake Street Capital Markets00:22:01Maybe just one. Oh, go ahead. Dave KutilCFO at Research Solutions00:22:03I was just gonna say, on the advertising spend side, we are able to, I think I mentioned in the last call as well, we are able to really manage that on a week-to-week basis. We can turn it on as we get into the fall, you know, the fall season returns, academic cohort, and then as we approach, you know, summer, we can be a lot more deliberate on that advertising spend. We'll continue to do that, and really having visibility into that and how that's converting has helped us, you know, manage costs and also, you know, tow that line where we're still keeping the MRR growing. Jacob StephanAnalyst at Lake Street Capital Markets00:22:44Got it. Maybe just last question for me. I know you guys are kind of innovating on the AI front, making scite and Article Galaxy integrated through MCPs, but and also the integration of Resolute. Maybe if you could look, you know, 12 to 18 months out, I guess what does your AI roadmap look like for kinda new product launches? Where are you seeing, you know, maybe pockets of opportunity for new product development? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:23:14Yeah. I think, you know, obviously scite as a platform was developed as a hundred percent AI. I think Article Galaxy has some opportunities within the Article Galaxy platform to implement AI in a copyright compliant way to do several things that take kinda friction out of the research process. For those customers that use AG on a daily basis, they'll be able to get summaries of stuff that are in a folder, assuming they have the rights to do that. They'll be able to get a summary of an article, assuming they have the rights to do that. They'll be able to extract tables and other information, again, assuming they have the rights to do that. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:23:51We'll continue to add I think there are several points in Article Galaxy we can continue to enhance by layering AI in on top of that workflow. Both the MCPs are 100% AI, and I think the real value add there is we have another roughly nine or 10 curated databases out of Resolute that we can integrate initially with those MCPs. An MCP user will see, "Here's patent results to your question. Here's clinical trial results to your question." Then ultimately, we'll add those other databases which you know, include drug databases and other research associated databases that'll be helpful to those researchers that they can add, turn on, turn off. Those are also revenue opportunities for us. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:24:38Once they're in the MCP, which will happen actually very quickly, then we'll circle back and be able to integrate those into scite AG or both, so that you can have that access as part of your search results in scite or in AG. It's continuing to add curated unique data that gets added into the answers of the questions that you're asking, if you want them added, and, you know, giving you a broader view of all information related to your query instead of just scientific research. Jacob StephanAnalyst at Lake Street Capital Markets00:25:17Got it. Very interesting. Thank you, guys. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:25:21Thank you. Dave KutilCFO at Research Solutions00:25:22Thanks. Operator00:25:24Thank you. Again, if you'd like to ask a question, please press star one now. We'll take our next question from Derek Greenberg with Maxim Group. Derek GreenbergAnalyst at Maxim Group00:25:32Hey, guys. Thanks for taking my questions. My first is just on the scite B2C, 2B pipeline. You guys had highlighted that in past quarters. I was just wondering if there's any progress on that front, just in terms of what you're seeing in the pipeline build-out from those opportunities. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:25:56You know, I didn't pull that specific slice of our pipeline. I was looking at the MCP part that I mentioned in the call. I mean, that continues to be a driver of a lot of our B2B sales, but I cannot tell you here whether it went up, went down, or was flat during the quarter. Dave KutilCFO at Research Solutions00:26:16Yeah, I think I can give you a little color on that. It increased a little bit, we were talking about sizing it up about $100,000, and it went up probably about 50%. We are, as Roy kind of alluded to, starting to look at some of the newer products in the B2C side that will give users a little more MCP usage over the basic plan. Dave KutilCFO at Research Solutions00:26:44We think that some of the power users as well, and, you know, in the future teams, you know, two to 50 seats, we think we can capture those, kind of those cohorts in the B2C platform and then, you know, let them see the value of the MCP and other features on the B2C side and then convert them into B2B as well. We have a lot more of a roadmap on the B2C side. And like I said in my remarks, the retention and the engagement is much improved once we release the MCP. That is a pathway from B2C to B2B as well. Derek GreenbergAnalyst at Maxim Group00:27:33Yeah. Thank you. That's helpful. My next question is just how to think about usage right now on the headless strategy. Like, what you're seeing in terms of, you know, percent of polls and usage that are coming outside of your core platforms and within their own workflows versus on the platform, and what you expect that mix to be over time as these new technologies gain more usage. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:28:12Yeah, usage of the MCP products, we see a multiple higher than our own products. Once they're integrated, you know, they're integrated into all users that are pounding on an LLM, whether they're Claude or ChatGPT all day, every day. We definitely are seeing usage that are literally a, some cases, a pretty big multiple over what we would see in a typical enterprise customer of the same size or same number of user seats. I will say a byproduct or related to what Dave commented on is that, you know, we are positioning the product of usage-based pricing. We're not doing MCPs that are basically unlimited. There is a limit, and when you hit the limit, you have to move to the bigger limit from a pricing point of view. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:29:08Because we do believe that while we're going through this transition from, you know, our historic kind of SaaS software and API business to more and more, MCP-associated revenue, that revenue is going to be derived based on usage, which is a multiple of the SaaS software platform, as I mentioned. We want to make sure we're not trying to sell a seat product into an environment that's 10x the usage without capturing the value in revenue to us of that usage, if that helps. Derek GreenbergAnalyst at Maxim Group00:29:43Yeah, that's very helpful. Just my last question. You previously said that, you were considering potentially selling into new segments such as like financial institutions, hedge funds, investment banks for their research, I was wondering if you've seen any traction in those segments or in any other new segments or if you had any comments on that? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:30:15You know, we have a few cats and dogs, in those segments, but right now we are very focused in the new sales groups on corporate and academic. I hesitate to really pull people off of what appears to be a pretty good pipeline and a pretty good TAM to go after these other verticals other than react to inbounds from those other verticals. If we see one that we really think will yield results, then we may hire additional salespeople to focus just on those markets, but we have not done that at this point. Derek GreenbergAnalyst at Maxim Group00:30:56Yeah. Got it. That makes sense. All right. Well, thanks for taking my questions. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:31:01Thank you. Derek GreenbergAnalyst at Maxim Group00:31:02Thanks. Operator00:31:04Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Roy Olivier for any additional or closing remarks. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:31:13All right. Well, thanks everybody for joining us. As a reminder, we will be attending the Three Part Advisors IDEAS Conference in New York on June 10th. Qualified investors that are interested in attending, please reach out to Three Part Advisors to get scheduled. We look forward to speaking to you in September and to discuss the fourth quarter and full fiscal year results. Have a great day. Operator00:31:36Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.Read moreParticipantsExecutivesDave KutilCFORoy W. OlivierPresident, Chairman, and CEOAnalystsDerek GreenbergAnalyst at Maxim GroupJacob StephanAnalyst at Lake Street Capital MarketsJohn BeislerVP at Three Part AdvisorsPowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Research Solutions Earnings HeadlinesLong Cast Advisors’ Views in Research Solutions’ (RSSS) Insights on Business Resilience and InnovationJune 3 at 2:33 AM | finance.yahoo.comResearch Solutions Inc. (NASDAQ:RSSS) Given Average Recommendation of "Moderate Buy" by BrokeragesMay 23, 2026 | americanbankingnews.comThe REAL Reason Trump is Invading IranFor a moment… Forget about Trump’s ties to Israel. Forget about reports of Iran’s nuclear program. Because my research has led me to believe we’re risking World War 3 with Iran for a completely different reason.June 3 at 1:00 AM | Banyan Hill Publishing (Ad)Research Solutions, Inc. (RSSS) Q3 2026 Earnings Call TranscriptMay 14, 2026 | seekingalpha.comResearch Solutions Reports Third Quarter Fiscal Year 2026 ResultsMay 14, 2026 | prnewswire.comResearch Solutions to Announce Third Quarter Fiscal Year 2026 Results on Thursday, May 14, 2026May 6, 2026 | prnewswire.comSee More Research Solutions Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Research Solutions? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Research Solutions and other key companies, straight to your email. Email Address About Research SolutionsResearch Solutions (NASDAQ:RSSS), Inc. (NASDAQ:RSSS) is a provider of software and managed services that streamline access to and management of scientific, technical and medical research. The company’s flagship platform automates the acquisition, licensing and delivery of journal articles, conference proceedings and other pay-walled content, enabling institutions to reduce administrative overhead and control subscription costs. Key offerings include self-service workflows for document requests, enterprise-grade managed services for high-volume users, and analytics tools that deliver detailed reporting on spend, usage patterns and supplier performance. Research Solutions’ compliance features help organizations maintain copyright and licensing integrity, while integrations with library management systems and knowledge portals ensure seamless deployment within existing IT environments. Research Solutions serves a diverse global customer base across North America, Europe and the Asia-Pacific region, with clients that span pharmaceutical and biotechnology companies, government research agencies, law firms, academic libraries and corporate R&D departments. The company collaborates with major publishers and technology partners to expand its content coverage and enhance platform capabilities, positioning itself as a strategic partner in scholarly information management.View Research Solutions ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Latest Articles Palo Alto Networks Accelerates Growth 31% on AI DemandUrban Outfitters Stock Stalls Despite Another Strong QuarterMarvell’s AI Moment Raises a Bigger Question for Amazon and ServiceNowHIVE Earnings Highlight AI Ambitions Beyond Bitcoin MiningMongoDB Is the Latest SaaS Apocalypse Victim to Say "Not Today"Dollar General Signals Reversal With 60% Rebound PotentialKohl's Stock Soars After Better-Than-Feared Quarter Upcoming Earnings Ciena (6/4/2026)Oracle (6/10/2026)Adobe (6/11/2026)Accenture (6/18/2026)FedEx (6/23/2026)Micron Technology (6/24/2026)NIKE (6/30/2026)Delta Air Lines (7/9/2026)Fastenal (7/13/2026)Bank of America (7/14/2026) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In Email Me a Login Link or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
PresentationSkip to Participants Operator00:00:00Good afternoon, everyone, and thank you for participating in today's conference call to discuss Research Solutions' financial and operating results for its fiscal 2026 third quarter ended March 31st, 2026. As a reminder, this conference is being recorded. I'd like to now turn the conference over to your host, John Beisler, Investor Relations. John BeislerVP at Three Part Advisors00:00:21Thank you, operator. Good afternoon, everyone. Thank you for joining us today for Research Solutions' third quarter fiscal year 2026 earnings call. On the call today are Roy W. Olivier, President, Chairman, and Chief Executive Officer, and Dave Kutil, Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the third quarter of fiscal 2026. The release is available on the company's website, researchsolutions.com. Before Roy and Dave begin their prepared remarks, I would like to remind you that some of the statements made today will be forward-looking and made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied due to a variety of factors. John BeislerVP at Three Part Advisors00:01:07We refer you to Research Solutions' recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the company's future operating results and financial condition. On today's call, management will reference certain non-GAAP financial measures which we believe provide useful information for investors. A reconciliation of those measures to GAAP measures is included in today's earnings press release as well. I would like to again remind everyone this call is being recorded and made available for replay via a link on the company's website. I would now like to turn the call over to Roy W. Olivier. Roy? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:01:47Thanks, John. The third quarter represented improving EBITDA and net income but was certainly lower than our expectations in terms of top-line growth. Churn continues to be an area that needs action, which I will talk about in more detail later in the call. New bookings were good at 61 new or upsell logos, representing $961,000 in ARR. Unfortunately, churn was 46 logos, representing $398,000 in ARR. Most of those were smaller accounts. However, there was one large account in that total that represented about $130,000. As a reminder, about one-third of churn is uncontrollable. That category is primarily driven by one of our customers being acquired, going out of business, or experience a reorg that includes eliminating the research function. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:02:44Two-thirds are controllable, and that's where our focus is, and none of it is related to, quote, AI usage, end quote. There was a lot of good news in the quarter. Academic and corporate sales were both strong. We signed sizable academic deals in Johannesburg, Singapore, and several with top U.S. universities, including my alma mater, Texas A&M. These deals are primarily scite deals. We also signed several large corporate deals at levels well above or at historic average sales price, or ASP. This is a good mix of both scite and Article Galaxy deals. About 70% of those deals are AG deals. The point is that new bookings are executing well, and I feel good about our new bookings growth. We have been using AI internally in virtually every area of the business. The product teams have seen a nice uptick in productivity as a result. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:03:45Due to this, we can now assign software development issues to AI and then have a developer check that work. This has accelerated the number of new items in each release. In addition, during the quarter, we released two new AI-based products. These are called MCPs, which stands for Model Context Protocol. You can think of an MCP as similar to a software API, but it is a connector to integrate an AI-based LLM, like ChatGPT or Claude, or an internally developed LLM into Article Galaxy or scite. This is part of our headless strategy, which means we want to be where our customers are working. I'll talk about that also more later in the call. I'll discuss all this with you in a little bit more detail, but for now, I'll have Dave walk you through the results in more detail. Dave? Dave KutilCFO at Research Solutions00:04:44Thank you, Roy, and good afternoon, everyone. Total revenue for the third quarter of fiscal 2026 was $12.1 million, compared to $12.7 million in the third quarter of fiscal 2025. Growth in platform subscription revenue was more than offset by decline in our lower margin transactions business. Our platform subscription revenue increased approximately 7% to $5.2 million. The growth was primarily driven by a net increase of 15 platform deployments over the prior year, as well as expansion within our existing customer base through upsells and cross-sells. Platform revenue accounted for about 43% of our total revenue for the quarter, compared to approximately 38% in the prior year quarter, as this mix continues to move towards the higher margin platform business. Dave KutilCFO at Research Solutions00:05:38We ended the quarter with $22.1 million in annual recurring revenue, or ARR, up 8.5% year-over-year, consisting of approximately $15.7 million in B2B ARR and approximately $6.4 million in normalized ARR associated with scite's B2C subscribers. Although it was down 7.5% year-over-year, B2C ARR has shown signs of improvement in recent months. As the MCP launch that Roy mentioned earlier has increased both conversion and retention. Net incremental platform ARR for the quarter was approximately $317,000. Please see today's press release for how we define and use annual recurring revenue and other non-GAAP items. Transaction revenue for the third quarter was $7 million, compared to $7.8 million in the prior year quarter. Dave KutilCFO at Research Solutions00:06:34The softness was driven by a previously discussed churned account and volume reductions from a small number of larger customers. It is notable that the monthly trend inside the quarter showed meaningful directional improvement, and while not a full recovery, it is an early sign of stabilization. Our total active transaction customer count for the quarter was 1,346, compared to 1,380 in the same period a year ago. Gross profit for the third quarter was $6.3 million, essentially flat with the prior year quarter from a dollar basis standpoint on lower revenue. Gross margin was 51.7%, a 220 basis point improvement over the third quarter of fiscal 2025. The increase was driven primarily by the ongoing revenue mix shift towards our higher margin platforms business. Dave KutilCFO at Research Solutions00:07:27On a trailing 12-month basis, the company's blended gross margin now stands at 51.4%. The platform business recorded a gross margin of 86.4% compared to 87.4% in the prior year quarter, reflecting modest hosting and infrastructure investment to support our AI and integration roadmap, and is still well within our high to mid 80% target range. Gross margin in our transaction business was 26%, essentially unchanged from the third quarter of fiscal 2025. Total operating expenses in the quarter were $5.2 million compared to $5.7 million in the prior year quarter. The improvement was driven primarily by lower G&A expenses and lower stock-based compensation, partially offset by continued investment in sales, marketing, and product. Dave KutilCFO at Research Solutions00:08:24This is further evidence that the company's profitability improvement is not just emanating from margin mix. It is also a function of our operating discipline. We are being deliberate about G&A spend, keeping it contained while we put resources to work against growth initiatives. We expect the discipline to translate into continued operating leverage. Net income for the quarter was $860,000, or $0.03 per diluted share, compared to net income of $216,000, or $0.01 per diluted share in the prior year quarter, an increase of approximately 297%. Adjusted EBITDA for the quarter was $1.6 million compared to $1.4 million in the year ago quarter, a 14% increase. Dave KutilCFO at Research Solutions00:09:11On a trailing 12-month basis, our adjusted EBITDA margin was 12.3%, a 220 basis points increase from the prior year quarter. Trailing 12-month adjusted EBITDA now stands at $6 million. Turning to our balance sheet, cash and cash equivalents as of quarter end were $12.1 million, essentially unchanged from our 2025 fiscal year-end, even after funding the scite earn-out payments made during the first nine months of fiscal 2026. That consisted of approximately $3.7 million in cash and the issuance of approximately 739,000 shares of stock. We ended the quarter with no outstanding borrowings on our revolving line of credit, providing additional flexibility on the balance sheet. Dave KutilCFO at Research Solutions00:10:02Cash flow from operations for the quarter were $1 million compared to $2.9 million in the prior year quarter. The decline reflects the timing of customer billings and strategic prepays rather than a change in underlying earnings power or a change in the collectibility of receivables. Trailing 12-month cash flow from operations was $5.7 million. We are entering the final quarter of fiscal 2026 with the aim of delivering adjusted EBITDA growth over the prior year, driven by continued platform subscription growth, improved retention, growing stabilization in transactions, and disciplined expense management. We expect to exit fiscal 2026 with stronger earnings power and cash generation, reinforcing the durability of our software as a service platform model and our ability to invest behind the next phase of growth. I'll now turn the call back to Roy. Roy? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:11:04Thanks, Dave. By the way, Josh, who normally attends these calls, is out today. He and his wife had a baby last week, and he's home taking care of the baby. Turning back to B2B bookings, the academic and corporate teams are doing well. As a reminder, we built out the academic-focused team back in 2025 or fiscal year 2025. The corporate team has been around for many, many years. The corporate team did well during the quarter, booking around $400,000. The academic team generated about $265,000, even though it's a seasonally slow time for them. The remainder or the balance of the new bookings was generated by the CSM upsell renewal team. While many reps on those teams are still new or in their first year, the performance on those teams is on track and improving. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:11:56As I mentioned earlier, B2B churn is the primary drag on top-line growth. We are doing several things to improve churn, including reorganizing the team, adding additional resources to that team, installing new technology to move us from reactive to proactive, as well as identifying low usage users and kicking off workflows to reengage with those users. Finally, we are improving our onboarding and training to ensure that we improve customer adoption. While this is not something that gets fixed in a quarter, I feel very good about our plan to get this back to historic levels. We'll report more on this during our next call. Turning to B2C, we have started to see some improvement from previous quarters. Product enhancements and the new AI-based solutions I previously mentioned helped reverse what was a steady decline in that business. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:12:57We saw less new trials on far less digital spend, have kept MRR about flat quarter-over-quarter. We've reduced our CAC by about 24%, and we've increased our lifetime value or LTV. We have had a good start to Q4, but keep in mind that we'll be entering the low season as universities let out for summer. That said, we have some exciting new versions of the B2C product and those are growing nicely. Product strategy and innovation are the drivers of all things for us. We've continued to improve the scite and AG products. As a reminder, we deliver scite and AG's value three ways. First is to customers that literally license the software and use it daily. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:13:49Second, we provide that same functionality and value via software APIs for customers that have internally developed their own solutions but need our unique capability at points in that workflow. The third option is the new two AI-based products that connect AI LLMs to the product. These, again, are called MCPs, and they are one-click connectors that allow the value of scite and AG to work within an LLM. They are working now with ChatGPT and Claude. We have this running for all B2C and some B2B users today. Back to our previous quarters where we talked about our headless strategies, headless strategy to be where the customer is, many of our users are starting to work in an LLM. They can ask a question of that LLM and interact with scite content in a copyright compliant way. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:14:50Once they get a fully cited answer, they can ask that LLM for the articles, and it will talk to Article Galaxy and go get that content for the user in a copyright compliant way. This basically allows an LLM to work with Article Galaxy and/or scite, again, in a copyright compliant way. This will be a big part of our future growth. The scite MCP was launched about two months ago, the AG MCP one month ago. We already have a sales pipeline of more than $1 million in opportunities for these new products. These MCPs will work with academic or corporate customers. In addition, we have integrated the Resolute databases into these MCPs. As a reminder, we purchased Resolute about two years ago, and one of the assets in that acquisition was access to over a dozen curated databases relevant to research. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:15:49We have integrated those into our MCP, so when a user asks a question in the AI tool, the tool's answer today will include patents, clinical trial, and major grant data. This means users can start and end their research journey in the AI LLM of their choice. There's a tremendous amount of excitement internally and across our customer base about these databases being integrated. We'll announce additional datasets as we add them. Integrating the unique value we can deliver with where our customers are doing research will remain the cornerstone of our strategy. In short, AI will not eliminate research, but it will change how it is accessed. Regarding document delivery or DocDel, we expect to see improvement in Q4 in terms of year-over-year performance. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:16:51As noted on earlier earnings calls, most of this decline is driven by a handful of customers. We have a large customer churn impacting the year-over-year decline, and a few other customers are doing less research than they did a year ago. Other than those customers, we are seeing increases in DocDel, particularly in OA or other free DocDel, but paid is slightly down. Regarding M&A, we continue to look for interesting opportunities and are progressing with some of those opportunities. That said, we are currently trading at 2.7-3.4 based on TTM enterprise value to revenue, depending on how you value the DocDel. This makes it challenging to pay the multiple sellers expect, which are still based on pre-SaaS software values declining due to AI concerns. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:17:46To summarize, I'm happy with the cash flow, net income, EBITDA, sales execution, and product work we did in Q3. I don't think our numbers reflect the great work we are doing in those areas. I do believe that progress will show up in future quarters and in FY 2027. Now I'll pass it over to the operator for questions. Operator? Operator00:18:10Thank you. If you'd like to ask a question, please press star one on your keypad. To leave the queue at any time, please press star two. Once again, that's star one to ask a question. We'll take our first question from Jacob Stephan with Lake Street Capital Markets. Please go ahead. Your line is open. Jacob StephanAnalyst at Lake Street Capital Markets00:18:28Yeah. Hey, guys, I appreciate you taking the questions. Roy, I guess, first, I just wanted to touch on the, on the B2B churn a little bit. You know, obviously, it sounds like a great new logo quarter, hindered by some of that churn. I guess what are the pain points of customers? You know, what are you hearing from them as reasons for the churn? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:18:53Basically, it comes down to customers that have limited engagement. In other words, we don't see a lot of usage of the platform, or they don't purchase enough articles, in Article Galaxy's case, to make the ROI work for the platform. Some cases in this economy, customers are simply looking for ways to save money. They may not be a big research organization, but they wanna cut costs associated with doing that. For us, the priorities moving forward are improving onboarding and training to ensure that at the end of a 90-day window, we have a majority of the researchers logged in, having used the product and been trained on the product. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:19:39Number two, we wanna monitor usage of the product so that when we see a cohort of customers that are not using the product, we can automatically kick off a three or four-point communication to that customer via in-product messaging and email to reengage them and get them to use the product. Number three, we know there are certain features in our product that are very high renewal features. In other words, people that use certain features in the product use it heavily, and they very rarely churn out. Just like usage, we will monitor cohorts of customers that are not using those features and kick off workflows to help them know those features are there, help them know how to use those features. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:20:26For us, a majority of that churn is related either to lack of ROI, which can come from lack of usage or can come from lower DocDel purchases, and lack of engagement on users' parts. In other words, they're not using the product as much as they had hoped. Jacob StephanAnalyst at Lake Street Capital Markets00:20:44Got it. Very helpful. Maybe just touching on the B2C side then. I know we're kinda entering a seasonally, seasonal slowdown, kind of on just as students are, you know, leaving class and everything. Maybe, you know, help me think about the improving CAC metrics. Are you spending less on marketing and still seeing better conversion? I guess, you know, numerator versus denominator, type question. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:21:13Yeah. We are spending significantly less on digital ad spend, even though we are seeing our conversion rate out of the funnel. In other words, that creates a trial user. The conversion rate's actually improved, which leads to, you know, flattish MRR on much less digital spend. Some of the things we've released, like the MCPs we've talked about, have really had a big impact on retention. We're seeing those customers stay longer, hence the improvement in lifetime value there. I think if we continue to execute there, you know, we may be able to get that thing growing again. Jacob StephanAnalyst at Lake Street Capital Markets00:22:00Got it. Dave KutilCFO at Research Solutions00:22:00Yeah. Jacob StephanAnalyst at Lake Street Capital Markets00:22:01Maybe just one. Oh, go ahead. Dave KutilCFO at Research Solutions00:22:03I was just gonna say, on the advertising spend side, we are able to, I think I mentioned in the last call as well, we are able to really manage that on a week-to-week basis. We can turn it on as we get into the fall, you know, the fall season returns, academic cohort, and then as we approach, you know, summer, we can be a lot more deliberate on that advertising spend. We'll continue to do that, and really having visibility into that and how that's converting has helped us, you know, manage costs and also, you know, tow that line where we're still keeping the MRR growing. Jacob StephanAnalyst at Lake Street Capital Markets00:22:44Got it. Maybe just last question for me. I know you guys are kind of innovating on the AI front, making scite and Article Galaxy integrated through MCPs, but and also the integration of Resolute. Maybe if you could look, you know, 12 to 18 months out, I guess what does your AI roadmap look like for kinda new product launches? Where are you seeing, you know, maybe pockets of opportunity for new product development? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:23:14Yeah. I think, you know, obviously scite as a platform was developed as a hundred percent AI. I think Article Galaxy has some opportunities within the Article Galaxy platform to implement AI in a copyright compliant way to do several things that take kinda friction out of the research process. For those customers that use AG on a daily basis, they'll be able to get summaries of stuff that are in a folder, assuming they have the rights to do that. They'll be able to get a summary of an article, assuming they have the rights to do that. They'll be able to extract tables and other information, again, assuming they have the rights to do that. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:23:51We'll continue to add I think there are several points in Article Galaxy we can continue to enhance by layering AI in on top of that workflow. Both the MCPs are 100% AI, and I think the real value add there is we have another roughly nine or 10 curated databases out of Resolute that we can integrate initially with those MCPs. An MCP user will see, "Here's patent results to your question. Here's clinical trial results to your question." Then ultimately, we'll add those other databases which you know, include drug databases and other research associated databases that'll be helpful to those researchers that they can add, turn on, turn off. Those are also revenue opportunities for us. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:24:38Once they're in the MCP, which will happen actually very quickly, then we'll circle back and be able to integrate those into scite AG or both, so that you can have that access as part of your search results in scite or in AG. It's continuing to add curated unique data that gets added into the answers of the questions that you're asking, if you want them added, and, you know, giving you a broader view of all information related to your query instead of just scientific research. Jacob StephanAnalyst at Lake Street Capital Markets00:25:17Got it. Very interesting. Thank you, guys. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:25:21Thank you. Dave KutilCFO at Research Solutions00:25:22Thanks. Operator00:25:24Thank you. Again, if you'd like to ask a question, please press star one now. We'll take our next question from Derek Greenberg with Maxim Group. Derek GreenbergAnalyst at Maxim Group00:25:32Hey, guys. Thanks for taking my questions. My first is just on the scite B2C, 2B pipeline. You guys had highlighted that in past quarters. I was just wondering if there's any progress on that front, just in terms of what you're seeing in the pipeline build-out from those opportunities. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:25:56You know, I didn't pull that specific slice of our pipeline. I was looking at the MCP part that I mentioned in the call. I mean, that continues to be a driver of a lot of our B2B sales, but I cannot tell you here whether it went up, went down, or was flat during the quarter. Dave KutilCFO at Research Solutions00:26:16Yeah, I think I can give you a little color on that. It increased a little bit, we were talking about sizing it up about $100,000, and it went up probably about 50%. We are, as Roy kind of alluded to, starting to look at some of the newer products in the B2C side that will give users a little more MCP usage over the basic plan. Dave KutilCFO at Research Solutions00:26:44We think that some of the power users as well, and, you know, in the future teams, you know, two to 50 seats, we think we can capture those, kind of those cohorts in the B2C platform and then, you know, let them see the value of the MCP and other features on the B2C side and then convert them into B2B as well. We have a lot more of a roadmap on the B2C side. And like I said in my remarks, the retention and the engagement is much improved once we release the MCP. That is a pathway from B2C to B2B as well. Derek GreenbergAnalyst at Maxim Group00:27:33Yeah. Thank you. That's helpful. My next question is just how to think about usage right now on the headless strategy. Like, what you're seeing in terms of, you know, percent of polls and usage that are coming outside of your core platforms and within their own workflows versus on the platform, and what you expect that mix to be over time as these new technologies gain more usage. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:28:12Yeah, usage of the MCP products, we see a multiple higher than our own products. Once they're integrated, you know, they're integrated into all users that are pounding on an LLM, whether they're Claude or ChatGPT all day, every day. We definitely are seeing usage that are literally a, some cases, a pretty big multiple over what we would see in a typical enterprise customer of the same size or same number of user seats. I will say a byproduct or related to what Dave commented on is that, you know, we are positioning the product of usage-based pricing. We're not doing MCPs that are basically unlimited. There is a limit, and when you hit the limit, you have to move to the bigger limit from a pricing point of view. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:29:08Because we do believe that while we're going through this transition from, you know, our historic kind of SaaS software and API business to more and more, MCP-associated revenue, that revenue is going to be derived based on usage, which is a multiple of the SaaS software platform, as I mentioned. We want to make sure we're not trying to sell a seat product into an environment that's 10x the usage without capturing the value in revenue to us of that usage, if that helps. Derek GreenbergAnalyst at Maxim Group00:29:43Yeah, that's very helpful. Just my last question. You previously said that, you were considering potentially selling into new segments such as like financial institutions, hedge funds, investment banks for their research, I was wondering if you've seen any traction in those segments or in any other new segments or if you had any comments on that? Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:30:15You know, we have a few cats and dogs, in those segments, but right now we are very focused in the new sales groups on corporate and academic. I hesitate to really pull people off of what appears to be a pretty good pipeline and a pretty good TAM to go after these other verticals other than react to inbounds from those other verticals. If we see one that we really think will yield results, then we may hire additional salespeople to focus just on those markets, but we have not done that at this point. Derek GreenbergAnalyst at Maxim Group00:30:56Yeah. Got it. That makes sense. All right. Well, thanks for taking my questions. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:31:01Thank you. Derek GreenbergAnalyst at Maxim Group00:31:02Thanks. Operator00:31:04Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Roy Olivier for any additional or closing remarks. Roy W. OlivierPresident, Chairman, and CEO at Research Solutions00:31:13All right. Well, thanks everybody for joining us. As a reminder, we will be attending the Three Part Advisors IDEAS Conference in New York on June 10th. Qualified investors that are interested in attending, please reach out to Three Part Advisors to get scheduled. We look forward to speaking to you in September and to discuss the fourth quarter and full fiscal year results. Have a great day. Operator00:31:36Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.Read moreParticipantsExecutivesDave KutilCFORoy W. OlivierPresident, Chairman, and CEOAnalystsDerek GreenbergAnalyst at Maxim GroupJacob StephanAnalyst at Lake Street Capital MarketsJohn BeislerVP at Three Part AdvisorsPowered by