Research Solutions Reports Preliminary Financial Results for Fiscal Fourth Quarter and Full Year 2016

ENCINO, Calif., Sept. 7, 2016

Beginning this quarter, the company has begun to report its Article Galaxy's subscriptions and transactions results separately: Article Galaxy SaaS Platforms represent customer deployments that provide premium access to Article Galaxy on a subscription basis, and Article Galaxy Transactions that represent all customer transactions conducted via both premium and standard access.

Fiscal Fourth Quarter 2016 Highlights

• Total revenue was up 10% to 8.3 million, with adjusted EBITDA up 61% to $162,000.
• Active Article Galaxy Transaction customer accounts increased 12% to 909.
• Article Galaxy transactions increased 17% to a 192,000, increasing related revenue by 12% to $6.0 Million and gross profit up 8% to $1.3 million. (See definitions of transactions and active customer accounts in the section, "About Transactions and Active Customer Accounts," below.)

Fiscal Full Year 2016 Highlights

• Total revenue was up 8% to a $34.4 million, with adjusted EBITDA lower by 37% to $389,000.
• Number of Article Galaxy SaaS Platform deployments increased 210% to 59, increasing related revenue by 127% to $402,000, and subscription-based annual billing run-rate by 146% to $581,000.
• Article Galaxy transactions increased 23% to 742,000, driving related revenue up 12% to a record $23.7 Million and gross profit up 4% to $5.3 million.
• Active Article Galaxy Transaction customer accounts increased 14% to 873, with corporate customers up 9% to 733, and academic customers up 48% to 140.
• Cash and equivalents at June 30, 2016 totaled $6.1 million versus $1.4 million at June 30, 2015

Management Commentary

"Throughout fiscal 2016, Article Galaxy platform deployments and transactions continued to gain momentum," said Research Solutions President and CEO, Peter Derycz. "These strong results reflect our increasing focus on our newer line of higher margin, subscription-based Article Galaxy SaaS Platform deployments that provide premium features and functionality for our customers.  

"In fact, by year end, we had 59 premium platform deployments, or nearly three times more than last year, which were generating an annual run rate of $581,000 in subscription-based revenue. We have previously combined Article Galaxy Transactions and SaaS Platforms into one line, but now given this significant amount of subscription revenue and the difference in gross margin, it seemed appropriate to begin breaking it out.