Research Solutions, Inc.

Research Solutions, Inc. Annual Report - Key Takeaways for Investors
Let’s break down what happened this year, why it matters, and what you should know as an investor.

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1. What does this company do?

Research Solutions provides specialized software and AI tools to help researchers find, manage, and analyze scientific papers/data. Think of them as a "Netflix for science nerds" with a twist:

• Owns 5 subsidiaries (including Scite LLC and Resolute Innovation)
• Serves universities, corporate labs, governments, and individual researchers
• New AI tools speed up research reviews and map connections between studies
• Added copyright compliance features for AI training (timely with growing AI regulation)

Key context: Big institutions sign 1-3 year contracts (stable revenue), while individuals pay monthly.

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2. Financial Performance

💰 Revenue grew 9.9% to $49.1M (up from $44.6M last year).

The standout story:

• Costs dropped 19% ($30.7M → $24.9M)
• Gross profit skyrocketed 73% to $24.2M (up from $14M)
• Margin doubled – now keeps $0.49 of every dollar vs. $0.31 last year

Why this matters: They grew sales while slashing costs – like a restaurant adding tables and cutting food waste.

Watchouts:

• Still unprofitable under standard accounting rules
• Stock compensation rose to 9% of pay (saves cash but dilutes shares)

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3. Biggest Wins & Challenges

Wins:
✅ Launched AI research assistant to evaluate paper quality
✅ Added patent/clinical trial data search tools
✅ New revenue stream: Copyright tools for AI training data

Challenges:
⚠️ Relies heavily on 2 suppliers (23% of costs)
⚠️ Hard-to-value "Level 3 assets" from acquisitions

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4. Competitive Position

The company didn’t provide detailed comparisons to competitors in their annual report. However, their new AI tools position them in the fast-growing market for research automation.

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5. What’s Next?

• Monetizing AI features (like the research assistant)
• Expanding copyright tools for AI companies
• Reducing supplier dependence

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Key Investor Takeaways

1. Efficiency champion: A rare 10% revenue growth + 19% cost cut combo shows serious operational improvements.
2. AI bet: New tools could tap into the $180B AI market, but adoption isn’t guaranteed.
3. Not profitable yet, but gross profit tripled – the path to profitability looks clearer.
4. Watch: Supplier risks and whether institutions pay up for AI features.

Think of them as: Infrastructure builders for AI-driven research. High potential, but still unproven in profitability.

Want deeper analysis? Ask away! 😊

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Why transparency matters: While key financials are clear, the company shared limited details about competitors and long-term debt. Always dig deeper before investing.