Research Solutions Inc (RSSS) (Q3 2026) Earnings Call Highlights: Margin Expansion and AI ...

Negative Points

• Total revenue declined to $12.1 million from $12.7 million year-over-year, missing top-line growth expectations.

• B2B churn remained a significant drag, with 46 logos representing $398,000 in ARR lost, including one large account at $130,000.

• Transaction revenue fell to $7.0 million from $7.8 million, due to a previously discussed churned account and volume reductions from larger customers.

• B2C ARR declined 7.5% year-over-year to $6.4 million, though showing signs of improvement.

• Cash flow from operations dropped to $1.0 million from $2.9 million, reflecting timing of customer billings and strategic prepays.

• Total active transaction customer count decreased to 1,346 from 1,380 in the prior year period.

• Platform gross margin slightly decreased to 86.4% from 87.4% due to hosting and infrastructure investments.

• M&A opportunities are challenging due to the company's low valuation multiple (2.7x-3.4x EV/revenue) versus seller expectations.

• B2C business faces seasonal slowdown as universities let out for summer, potentially impacting Q4 results.

• Churn issues are not expected to be fully resolved in a single quarter, requiring ongoing reorganization and process improvements.

Q & A Highlights

Q: Jacob Stephan of Lake Street Capital Markets asked about the pain points and reasons customers are churning on the B2B side, given the strong new logo quarter was hindered by churn. A: CEO Roy Olivier explained that churn largely stems from customers with limited engagement low platform usage or insufficient Article Galaxy article purchases to justify ROI and, in some cases, customers simply cutting costs in the current economy. He outlined three priorities: improving onboarding and training so most researchers log in and use the product within a 90-day window; monitoring usage to automatically trigger reengagement workflows for non-using cohorts; and identifying customers not using high-renewal features and prompting them to adopt those features. He noted most churn relates to lack of ROI from low usage or lower DocDel purchases.

Q: Derek Greenberg of Maxim Group asked about usage under the headless strategy what percentage of pulls and usage is coming outside the core platforms versus on-platform, and how that mix may evolve. A: CEO Roy Olivier said MCP product usage is a multiple higher than their own products because once integrated, it reaches all users working in LLMs like Claude or ChatGPT daily in some cases a big multiple over a typical enterprise customer of similar size. He added they are positioning MCPs with usage-based pricing rather than unlimited access, with tiered limits, because they believe revenue will increasingly be derived from usage a multiple of the SaaS platform and they want to capture that value rather than sell a seat product into an environment with 10x the usage.

Q: Jacob Stephan asked about the B2C side and the improving CAC metrics whether they are spending less on marketing while still seeing better conversion. A: CEO Roy Olivier confirmed they are spending significantly less on digital ad spend while conversion rates from trial users have actually improved, leading to flattish MRR on much lower spend. He credited new releases like the MCPs with a big impact on retention, improving lifetime value, and said continued execution could get B2C growing again. CFO Dave Kutil added they manage advertising spend week-to-week, turning it on for the fall academic season and being more deliberate approaching summer, which helps manage costs while keeping MRR growing.

Q: Derek Greenberg asked about the Scite B2C-to-B2B pipeline highlighted in past quarters and whether there was progress in pipeline buildout. A: CEO Roy Olivier said he didn't pull that specific pipeline slice but noted it continues to drive much B2B sales. CFO Dave Kutil added it increased about 50% from roughly $100,000, and they are looking at newer B2C products giving users more MCP usage over the basic plan. He said they aim to capture power users and future teams of 2 to 50 seats in B2C, let them see MCP value, then convert them to B2B with retention and engagement much improved after the MCP release, creating a B2C-to-B2B pathway.

Q: Jacob Stephan asked for a 12-to-18-month view of the AI road map for new product launches and where pockets of opportunity exist for new product development. A: CEO Roy Olivier said Scite was developed as 100% AI, and Article Galaxy has opportunities to implement AI in a copyright-compliant way to reduce research friction such as summaries of folder contents or articles and extracting tables, assuming users have the rights. He said both MCPs are 100% AI, with roughly 9 or 10 additional curated Resolute databases to integrate, including drug and other research databases that users can toggle on or off as revenue opportunities. These will later be integrated into Scite, AG, or both to broaden search results beyond scientific research.

Q: Derek Greenberg asked whether Research Solutions has seen traction in new segments such as financial institutions, hedge funds, and investment banks for their research. A: CEO Roy Olivier said they have a few "cats and dogs" in those segments but are currently very focused on corporate and academic sales groups. He is hesitant to pull people off a good pipeline and TAM to chase other verticals beyond reacting to inbound interest. If a vertical shows real promise, they may hire additional salespeople to focus on those markets, but they have not done so yet.

Q: Jacob Stephan asked about B2B churn what pain points customers cite as reasons for leaving. A: CEO Roy Olivier reiterated that churn comes down to limited engagement low platform usage or insufficient Article Galaxy article purchases to make ROI work and some customers seeking cost savings in the current economy. He emphasized priorities of improving onboarding and training, monitoring usage to trigger automated reengagement communications, and promoting high-renewal features to at-risk cohorts.

Q: Jacob Stephan asked about the B2C seasonal slowdown as students leave and how to think about improving CAC metrics. A: CEO Roy Olivier said they are spending significantly less on digital ads while funnel conversion to trial users has improved, yielding flattish MRR on lower spend, with MCP releases boosting retention and lifetime value. CFO Dave Kutil added they manage ad spend week-to-week, ramping for the fall academic cohort and pulling back in summer, which helps control costs while sustaining MRR growth.

Q: Derek Greenberg asked about the B2C-to-B2B pipeline progress. A: CFO Dave Kutil said the pipeline increased about 50% from roughly $100,000, and they are developing B2C products with more MCP usage beyond the basic plan to capture power users and small teams, then convert them to B2B. Retention and engagement improved significantly after the MCP release, supporting a B2C-to-B2B pathway.

Q: Derek Greenberg asked about headless strategy usage mix and expectations over time. A: CEO Roy Olivier said MCP usage is a multiple higher than their own products because integration reaches all LLM users daily, and they are using usage-based pricing with tiered limits to capture value as revenue shifts from SaaS/API to MCP-associated usage.

Q: Derek Greenberg asked about traction in new verticals like financial institutions and hedge funds. A: CEO Roy Olivier said they have minimal presence there and remain focused on corporate and academic segments, avoiding diversion from a strong pipeline unless a vertical shows clear promise, in which case they might hire dedicated salespeople.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .