Research Solutions Q3 ARR Rises 8.5% to $22.1M, EBITDA Up 14%
Research Solutions reported Q3 ARR up 8.5% to $22.1 million and net income rising 297% to $860,000, driving adjusted EBITDA up 14% to $1.6 million. Platform revenue climbed 6.6% to $5.2 million, lifting gross margin by 220 basis points to 51.7%.
1. Fiscal Third Quarter Highlights
Total revenue was $12.1 million, down 4.3% from the prior year. Annual Recurring Revenue increased 8.5% to $22.1 million while net income surged to $860,000, or $0.03 per diluted share, compared to $216,000 a year earlier.
2. Platform Business Growth
Platform subscription revenue grew 6.6% to $5.2 million, representing 43% of total revenue versus 38% in the prior-year quarter. The company added 15 net new deployments, marking 10% deployment growth over the past 12 months.
3. Margin Improvement
Total gross margin improved by 220 basis points to 51.7%, driven by the higher-margin platform mix. Operating expenses declined 8.6% to $5.2 million, reflecting reduced general and administrative costs and lower stock-based compensation.
4. Cash Flow and Product Investments
Cash flow from operations was $1.0 million compared to $2.9 million last year, due to billing timing and working capital changes, with $5.7 million generated on a trailing twelve-month basis. Recent launches of AI-based search and review tools aim to enhance upsells and new logo acquisitions.