Research Solutions Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations for the three and six months ended December 31, 2024 and 2023 should be read in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Current wording

The following discussion and analysis of our financial condition and results of operations for the three and nine months ended March 31, 2025 and 2024 should be read in conjunction with our consolidated financial statements and related notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Previous wording

Discovery Tools – Our Scite.ai and Resolute.ai solutions facilitate search (discovery) across virtually all STM articles available. These solutions include basic search solutions and advanced search tools. These tools

Current wording

Discovery Tools – Our Scite.ai and Resolute.ai solutions facilitate search (discovery) across virtually all STM articles available. These solutions include basic search solutions and advanced search tools. These tools allow for searching and identifying relevant research and then purchasing that research through one of our other

Previous wording

allow for searching and identifying relevant research and then purchasing that research through one of our other solutions. In addition, these tools increasingly enable users to find insights in other datasets adjacent to STM content, such as Clinical Trial, Patent, Life Science & MedTech Regulatory information, Competitor and Technology landscape insights, in addition to searching the customer’s internal datasets. Scite.ai includes full text search capability on most of the worlds STM content providing better search results and citation information as supporting or contrasting evidence. This powers our AI assistant and literature search engine and gives researchers better insights into any topic. The advanced search solutions are sold through a seat, enterprise, or individual license. These Platforms are deployed as a single, multi-tenant system across our entire customer base. Customers securely access the Platforms through online web interfaces and via web service APIs that enable customers to leverage Platform features and functionality from within in-house and third-party software systems. The Platforms can also be configured to satisfy a customer’s individual preferences. We leverage our Platforms’ efficiencies in scalability, stability and development costs to fuel rapid innovation and competitive advantage.

Current wording

solutions. In addition, these tools increasingly enable users to find insights in other datasets adjacent to STM content, such as Clinical Trial, Patent, Life Science & MedTech Regulatory information, Competitor and Technology landscape insights, in addition to searching the customer’s internal datasets. Scite.ai includes full text search capability on most of the world’s STM content providing better search results and citation information as supporting or contrasting evidence. This powers our AI assistant and literature search engine and gives researchers better insights into any topic. The advanced search solutions are sold through a seat, enterprise, or individual license. These Platforms are deployed as a single, multi-tenant system across our entire customer base. Customers securely access the Platforms through online web interfaces and via web service APIs that enable customers to leverage Platform features and functionality from within in-house and third-party software systems. The Platforms can also be configured to satisfy a customer’s individual preferences. We leverage our Platforms’ efficiencies in scalability, stability and development costs to fuel rapid innovation and competitive advantage.

Previous wording

We provide our researchers with a single source to the universe of published STM content that includes over 200 million existing STM journal articles for instant download, 50 million journal articles for rent, 10 million online book chapters, and 45 million only in print journal articles. In addition, we add between 2 to 4 million newly published STM articles each year. STM content is rented or sold to our customers on a per transaction basis. Researchers and knowledge workers in life science and other research-intensive organizations generally require single copies of published STM journal articles for use in their research activities. These individuals are our primary users and while they typically purchase the articles via one of our Platform solutions, we do have some customers that just order articles from us on behalf of end-users in their organizations.

Current wording

articles each year. STM content is rented or sold to our customers on a per transaction basis. Researchers and knowledge workers in life science and other research-intensive organizations generally require single copies of published STM journal articles for use in their research activities. These individuals are our primary users and while they typically purchase the articles via one of our Platform solutions, we do have some customers that just order articles from us on behalf of end-users in their organizations.

Previous wording

Comparison of the Three and Six Months Ended December 31, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended March 31, 2025 and 2024

Previous wording

Total revenue increased $1,600,477, or 15.5%, for the three months ended December 31, 2024 compared to the prior year, due to the following:

Current wording

Total revenue increased $545,691, or 4.5%, for the three months ended March 31, 2025 compared to the prior year, due to the following:

Previous wording

Total revenue increased $3,583,988, or 17.6%, for the six months ended December 31, 2024 compared to the prior year, due to the following:

Current wording

Total revenue increased $4,129,679, or 12.7%, for the nine months ended March 31, 2025 compared to the prior year, due to the following:

Previous wording

Total cost of revenue as a percentage of revenue decreased 5.4%, from 56.5% for the previous year to 51.1%, for the three months ended December 31, 2024.

Current wording

Total cost of revenue as a percentage of revenue decreased 4.3%, from 54.8% for the previous year to 50.5%, for the three months ended March 31, 2025.

Previous wording

Total cost of revenue as a percentage of revenue decreased 6.6%, from 58.2% for the previous year to 51.6%, for the six months ended December 31, 2024.

Current wording

Total cost of revenue as a percentage of revenue decreased 5.7%, from 56.9% for the previous year to 51.2%, for the nine months ended March 31, 2025.

Previous wording

Net loss increased $1,926,606, or 3,592%, for the three months ended December 31, 2024 compared to the prior year, primarily due to charges related to increasing the estimated earn out liability associated with the Scite acquisition completed in fiscal year 2024.

Current wording

Net income increased $140,169, or 183.7%, for the three months ended March 31, 2025 compared to the prior year, primarily due to increased gross profit, partially offset by increase in sales and marketing expenses and change in the net estimated earn out liability associated with the Scite acquisition completed in fiscal year 2024, due to net present value assumptions.

Previous wording

Net loss increased $269,559, or 25.9%, for the six months ended December 31, 2024 compared to the prior year, primarily due to charges related to increasing the estimated earn out liability associated with the Scite acquisition completed in fiscal year 2024, partially offset by increased gross profit as described above.

Current wording

Net loss increased $129,390, or 13.4%, for the nine months ended March 31, 2025 compared to the prior year, primarily due to charges related to increasing the estimated earn out liability associated with the Scite acquisition completed in fiscal year 2024, in addition to an increase in sales and marketing expenses, partially offset by increased gross profit as described above.

Previous wording

As of December 31, 2024, we had cash and cash equivalents of $7,701,155, compared to $6,100,031 as of June 30, 2024, an increase of $1,601,124. This increase was primarily due to cash provided by operating activities.

Current wording

As of March 31, 2025, we had cash and cash equivalents of $9,852,007, compared to $6,100,031 as of June 30, 2024, an increase of $3,751,976. This increase was primarily due to cash provided by operating activities.

Previous wording

Net cash provided by operating activities was $1,871,493 for the six months ended December 31, 2024 and resulted primarily from an adjustment to contingent earnout liability of $2,406,886 and a decrease in prepaid royalties of $478,169, partially offset by a decrease in accounts payable and accrued expenses of $737,670 and an increase in accounts receivable of $266,255.

Current wording

Net cash provided by operating activities was $4,764,251 for the nine months ended March 31, 2025 and resulted primarily from an adjustment to contingent earnout liability of $2,812,796, an increase in deferred revenue of $1,331,920 and restricted common stock expense of $1,400,199, partially offset by an increase in accounts receivable of $754,258.

Previous wording

Net cash used in operating activities was $426,888 for the six months ended December 31, 2023 and resulted primarily from an increase in accounts receivable of $681,502 and a decrease in deferred revenue of $241,545, partially offset by a decrease in prepaid royalties of $121,100.

Current wording

Net cash provided by operating activities was $1,589,791 for the nine months ended March 31, 2024 and resulted primarily from an increase in fair value of vested restricted common stock of $1,603,820 and an increase in deferred revenue of $768,347, partially offset by an increase in accounts receivable of $739,883.

Previous wording

Net cash used in investing activities was $5,404 for the six months ended December 31, 2024 and resulted from the purchase of property and equipment.

Current wording

Net cash used in investing activities was $11,571 for the nine months ended March 31, 2025 and resulted from the purchase of property and equipment.

Previous wording

Net cash used in investing activities was $10,079,509 for the six months ended December 31, 2023 and resulted primarily from the payment for the Scite acquisition of $7,305,493 and the payment for the ResoluteAI acquisition of $2,718,253.

Current wording

Net cash used in investing activities was $10,081,507 for the nine months ended March 31, 2024 and resulted primarily from the payment for the Scite acquisition of $7,305,493 and the payment for the ResoluteAI acquisition of $2,718,253.

Previous wording

Net cash used in financing activities was $267,838 for the six months ended December 31, 2024 and resulted from the payment of contingent acquisition consideration of $62,560 and the repurchase of common stock of $205,278.

Current wording

Net cash used in financing activities was $999,567 for the nine months ended March 31, 2025 and resulted from the repurchase of common stock of $908,393 and the payment of contingent acquisition consideration of $91,174.

Previous wording

Net cash used in financing activities was $346,943 for the six months ended December 31, 2023 and resulted from the payment of contingent acquisition consideration of $278,195 and the repurchase of common stock of $68,748.

Current wording

Net cash used in financing activities was $836,984 for the nine months ended March 31, 2024 and resulted from repurchase of common stock of $522,024 and the payment of contingent acquisition consideration of $314,960.

Previous wording

In addition to our GAAP results, we present Adjusted EBITDA as a supplemental measure of our performance. However, Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of liquidity. We define Adjusted EBITDA as net income (loss), plus interest expense, other income (expense) including any change in fair value of contingent earnout liability, foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, income from discontinued operations and gain on sale of discontinued operations. Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Current wording

In addition to our GAAP results, we present Adjusted EBITDA as a supplemental measure of our performance. However, Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of liquidity. We define Adjusted EBITDA as net income (loss), plus interest expense, other income (expense) including any change in fair value of contingent earnout liability, foreign currency transaction loss, provision for income taxes, depreciation and amortization, stock-based compensation, income from discontinued operations and gain on sale of discontinued operations, when applicable. Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Previous wording

Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) for the three and six months ended December 31, 2024 and 2023:

Current wording

Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) for the three and nine months ended March 31, 2025 and 2024: