Our next presenting company is Research Solutions, trades on the Nasdaq under the symbol RSSS. The company is involved in a very vital component of the research process, helping researchers obtain documents that are necessary, helping them create the research that is necessary in the world. Here to speak on the company is Roy Olivier, Company CEO. With him, Bill Nurthen, the Company CFO, and in the audience, the Chief Strategy Officer, Josh Nicholson. Roy?
Thanks, John. Appreciate it. Welcome, and I look forward to giving you a little more details on what we do. I'm going to skip through some of these quick slides. You know, at a high level, what we do is our mission is to advance the world's knowledge by simplifying research. And research, like a lot of segments today, is being overwhelmed with the amount of information being distributed and created. And our tools are really to help streamline that process for research-intensive organizations. A little bit about our investment summary. You know, we do participate in a large growing market that right now is being driven, of course, by AI, as well as the digitization of research and adoption of the AI-enabled workflows. We do play in non-cyclical demand markets, and we're typically mission-critical, especially in larger organizations.
We do have a SaaS platform, so part of our revenue is derived from SaaS software revenue. We have strong financial momentum, which I'm going to go through in a couple of slides. We typically have very high renewal rates. Our renewal rates are typically in the low 90%. Our net renewal rates are over 100%. They've run as high as 110% in the past. We also have a multi-lever growth strategy, combining organic growth rates as well as layering in acquisitions that make sense for the business.
When we talk about the transformation, we've really transformed the business in the 2017 to 2021 timeframe from a business focused on delivery of peer-reviewed scientific articles, a low-margin but critical business to support research, to a vertical SaaS platform with AI capabilities to provide our research organizations with the ability to search for, analyze, acquire, and manage content across the entire research process. That's really resulted in top-line growth, growing from $5 million -$15 million. We've increased pretty significantly our recurring revenue, or sticky revenue, if you will, from about $6 million in ARR back at the end of 2021 to over $20 million today. That's increased the mix of our revenue from transactional one-time revenue to SaaS revenue from 16% - 37% and has had a very positive impact on our gross margins, profitability, as well as expanding our TAM.
As we've added products, we've added new verticals, and of course, revenue sources there. We've got a large TAM now, and we're at a single-digit market share position in that TAM. We've increased our customer count materially and expanded our market focus, as I mentioned a minute ago. At a high level, how we solve problems is we've got multiple solutions, the first being SITE. SITE is a product that allows you to search for, as well as run, AI questions on peer-reviewed scientific research. In other words, with SITE, because it is focused on peer-reviewed scientific research and we are searching things in front of and behind the paywalls of the publishers, we typically can provide better answers and less hallucinations than other products out there today. Once you find those articles, you can acquire them using Article Galaxy.
Article Galaxy allows an organization, whether it's a library or a corporation, to manage their entitlements, which is basically what do I subscribe to, what have I prepaid to get discounts on, called tokens, what of my current library can I reuse, and where can I acquire these articles the quickest possible way at the best price. Article Galaxy has both transaction as well as subscription revenue tied to it. We then have a product called References, which allows you to manage those articles. We store a corporate library of everything anybody in that organization has ever bought. We allow you as a researcher to create individual folders or shared folders, to mark up documents, to share those documents with a research team. In the future, we will create or develop a product to help you create whatever it is you're working on.
That could be a peer- review, an article you want to get peer- reviewed. That could be a patent submission, a new drug, et cetera. SITE also underpins all of our products as it relates to analysis. That includes being able to do a better search. That includes being able to tell when you're looking at a scientific article if it is supported by other research or if other research has contrasted the conclusions of that article. It allows you to throw 50 articles in a folder and ask questions, extract tables, and more. We'll continue to build out solutions in this workflow, primarily to serve what we refer to as research-intensive corporations and university libraries. What's driving all this is volume of research, which has been exploding and continues to explode.
An output of that is, with a lot of the publicly available ChatGPT AI kind of tools, you'll get a lot of hallucinations. With the SITE product, we have a verifiable AI built specifically for research, which reduces hallucinations. Also, as you can see on the right, searches full text, provides citation metrics, provides search, and now, married with our core products, allows you to purchase the articles. Our SaaS platform is basically about saving time and hard dollars. When I say time, I mean that there is scientific research that talks about how long it takes a researcher to find and acquire research. We can dramatically reduce that time. When you apply that across hundreds or thousands of researchers, the savings are material.
We also can help you as a company make better decisions about where should I subscribe, where should I prepay for a discount, where should I buy on a pay-per-view basis. Also, out of my corporate library I have accumulated over the last 10 years, how many of those things can be reused without me having to buy again? I will not walk you through these details, but they are available on our PowerPoint deck. As you may know, we do have a very large customer base today. I will tell you that pharmaceutical companies, biotech, and medical devices are about 50% of our revenue. However, we have installs in about 60 different verticals: cosmetics, oil and gas, aerospace, automotive, cosmetics, a number of vertical markets.
We also started a university business a few years ago, and certainly with the acquisition of SITE- 18 months ago, our academic business has grown pretty dramatically. We today do account as customers a number of major university libraries globally. We also, because of the nature of what we do, we serve a lot of multinationals that are heavily involved in research today. A couple of quotes from our customers. Article Galaxy has been the big time saver for organizations that we serve. SITE has really offered unique capability in terms of utilizing AI full text behind the paywall, which produces better search results. From a market opportunity, we do have a very large TAM. We do very carefully look at TAM. In other words, we do not count organizations that we do not consider to be research-intensive.
A company that does not do research is not counted in our TAM. A university library that has never published scientific research is not counted in our TAM. When we think about the segments, we have what we call enterprise or B2B customer focus. That's where a majority of our revenue comes from today. On the B2C side, these are individual subscribers, primarily academics, either graduate students or just undergrad students that are using our tools. Our TAM is basically built up in each one of these segments separately. There's some very little fine print down there that have links in it. If you want to understand how we came up with our TAM, you can go there and click on those links, and it will lay out for you exactly how we came up with these numbers. I've mentioned before we're in 60 verticals.
High level, about 70, I'm sorry, yeah, 70%-75% of our revenue—I'm sorry, I'm not awake today—80%-85% of our revenue is corporate, 15%-ish is academic library. And pretty much any industry that does the R and R&D is a candidate for one or more of our products. A lot of people ask us in one-on-one meetings about what happens in a downturn. We certainly do not know. We may be able to find out here soon. As we look at the 2008 crisis, what we saw is scientific research slowed down for a couple of quarters and then started to immediately bounce back up. I will say in the last 60 days, or actually the last six weeks, I've talked to virtually every sales rep we have in the organization and asked what they've heard from customers.
Corporate side, what I've been told is customers have some concerns about tariffs. They're not being impacted by some of the budget cuts that are going on in Washington right now, and they're continuing to work to develop their innovation pipeline, whatever that is, drug discovery or whatever. Haven't seen any increase in closed lost or things being delayed on the corporate side. In the academic side, it's a bit of a different story. We have academic librarians sharing that they have concerns about what's going to happen over the next 60 or 90 days. We've not seen an uptick in deals marked closed lost.
We have seen an uptick in librarians saying, "We're going to put this project off for 60 or 90 days and see what's going to happen." Their concern is, of course, the decisions being made by Washington as it relates to grants, percentage of grants that can be used for overhead, which ultimately will have downward pressure on university libraries. We still feel very bullish about our Q4 numbers, but I think it's going to take another quarter to see how this is going to impact our business long term. Our business model today, transactions, which is a 25% gross margin business, is about 63% of our revenue, and it's flat-ish. Our platform revenue is about 37% of revenue. It's 85 %+ gross margin, and it's 20 %+ growth.
As I mentioned, platforms, 85% gross margin, it is where we focus. Our entire corporate focus is really on how do we grow what we consider to be strategic recurring SaaS revenue. The transactional revenue has been a great provider of cash flow and EBITDA to the business to fund the development of the platform side, and we expect it to continue to be as we look forward. I'll spend a little bit of time on moat. As I mentioned, upper left-hand corner, our net renewal rates are greater than 100%. Upper right-hand corner, those are really built, and our business is built on relationships with the copyright owners, the publishers that own this content. And we have three different kinds of relationships with those publishers. One is just reselling their articles to research organizations that need them.
The second is obtaining AI rights to be able to use the SITE product to do full-text search on their content. The third relationship is a new product we're developing in conjunction with publishers, which we internally call Rights Dell. Basically, think of it this way. If you're a research organization, you've been buying articles for the last 20 years, you've not been buying AI rights with any of those articles. Part of our future product roadmap is providing researchers on an individual basis and companies on a group basis an understanding of where they have what rights and how do they acquire the rights they don't have. An organization that has 300,000 articles can either one at a time or in one payment buy AI rights for that whole block of articles they already own.
As I mentioned earlier, we are currently working with publishing partners. We work with virtually every publisher in the world today, covering some of the publications you see here. Our products do typically win a number of awards. In fact, we just won another award here in the last couple of weeks, which I need to update this slide to include. I will turn it over to Bill to walk you through some of the financials.
Okay. Thank you. Let's see. Oops. This slide shows the two revenue segments. Really, what is sort of the compelling opportunity here is, as Roy talked about, the shift to SaaS revenue with 85% gross margin. It's growing 20% + organically. You can see we're now topped $20 million of ARR in that business. That business, not only 85% + gross margin, net retention rates around 100%. It's very sticky revenue. You have the transaction revenue there, which is pretty stable and has about a 25% gross margin. What's really happening is this becomes a bigger and bigger component of the revenue mix. Gross profit goes up on a blended basis. It all drops to the bottom line. Two years ago, we were at about 22% of the revenue with SaaS. The blended gross margin was about 39%.
Come to today, it's now about 37%-38% of the business. Our blended gross margin is right now near 50% and is going to push across 50% very soon. As this transformation continues to take effect, more and more of that cash flow is going to drop to the bottom line. The SaaS platform now generates about two-thirds of the gross profit of the company. If I flip, oops, to here, this is sort of the payoff, right? This is what's happening. You can now see we've reached an inflection point where this is starting to kick in in the business. The blue is our adjusted EBITDA, and the green is the cash flow from operations. You can see that transformation in the business as this SaaS mix has become more and more part of the revenue.
Now, $5.1 million of adjusted EBITDA and, more important, cash flow from operations about $6.7 million. I think it speaks to the quality of our earnings and our ability to collect as well on these upfront payments related to the SaaS software. That is playing out, and it will continue to play out as that mix continues to shift more and more to the SaaS side of the business. This is sort of where we stand on a balance sheet. It is a very clean balance sheet. We have about $9.9 million of cash. Just to give you some perspective, we bought SITE in December of 2023. We went down to about $2.7 million in cash, and sort of 15 months later, we are now sort of back up at $9.9 million, pushing across $10 million. Our fiscal year ends in June.
Our Q4 is this, we're in it right now, and we've already said we expect that cash number to go up again because Q4 is a pretty seasonally strong time for us. We'll be above $10 million in cash as we end our quarter in June. That cash, most importantly, can be used for strategic things. It is not needed to organically grow the business. It can be used for M&A, which we've done some in the past, and we continue to look at opportunities. When you combine that with sort of now generating more and more EBITDA, we have more debt capability as well that we could take on if we wanted to do a transaction. This is just some stats, some metrics on our business and our ownership. I won't go into too much detail here.
A lot of this is publicly available, and you can crunch the numbers. I think the main thing we feel when we look at things is if you look at sort of, again, we've got the SaaS ARR growing 20% +. Bottom line's growing faster. The more the mix shifts, better the gross margin gets, the better the bottom line gets. We do feel like it becomes pretty compelling from a valuation perspective. We really just need to continue to execute and increase that mix shift over time, and that's what we continue to work on. I'll turn it back to Roy.
Thanks, Bill. Yeah, just in conclusion, summary for the road ahead. We'll continue to focus on what we consider to be strategic revenue or platform growth. We do expect that to continue to grow at 20%+. I've mentioned on several earnings calls that our BHAG, our big hairy goal—this is not guidance—is to increase our SaaS revenue from $20 million - $30 million in the next couple of years. We'll need a little bit higher growth rate in order to do that organically because that is an organic number. But we've made significant investments in the last seven months in new Chief Revenue Officer, new salespeople, training, internal improvement of virtually every process associated with sales in order to kind of accelerate that growth rate.
We do continue to believe that the general demand for our tools will improve and continue to improve, especially in the AI and advanced analytics. Our AI products are growing, in some cases, over 100%. I've mentioned we have very sticky customers. Once we do an install, our renewal rates are typically in the 90s with net renewal rates over 100%. We continue to look at acquisitions that make sense for us. I mean, we look at a lot of deals that are sub-million-dollar ARR. Those are not particularly exciting for me because we need something that's going to move that needle. We've looked at a few deals that are north of $5 million in ARR. Those are of great interest to us, but can sometimes be challenging from a valuation or capital point of view.
We're doing some stuff to improve our deal flow in the $1 million-$5 million range, which is something that I think is our sweet spot. A lot of folks ask what kind of acquisitions. When we think about acquisitions, we'd love to take out direct competitors. There's not a lot of those. However, what there is is if we look at that research workflow that's happening in every research-intensive organization in the world, there are numbers of steps, and there are pieces of technology in that workflow that we do not do today. We partner with other people to deliver that service. With some large accounts, we may be the contractor of record, if you will, but we subcontract with somebody else to provide functionality that we don't offer.
Ultimately, we'd love to acquire those companies while we continue to organically build our capability of our current platform. Just a recap of the numbers. I love the platform revenue number and the growth rate of that. We expect to continue to have a transactional business that'll contribute nicely to our EBITDA and cash flow. As that revenue mix changes, as Bill pointed out, we'll start to see a $60 million business with 20%+ EBITDA margin. Again, summary, our focus is fueling organic growth by reinvesting the profits from that transactional business and platform business, acquiring strategic M&A to fill gaps in our product portfolio, or take out direct competitors.
At this stage, with the stock price where it is today, with $10 million in cash and acquisition not sitting right in front of us to pull the trigger on, we continue to have internal discussions about at what point do we start buying back stock, especially at the rate it is now. Why invest? I'll let you read this on your own, but we think we're undervalued from where we are today. Certainly, as a multiple of our ARR, we're undervalued. We believe we're on a really good track in terms of driving our results up into the right over the next few years, and that'll ultimately pay off in stock price. Management team, Bill and I have worked together before in a public company. We sold to private equity back in 2017.
The rest of our management team has extensive experience with private equity, with other public companies. Josh, who's here, is our Chief Strategy Officer. He founded SITE and has taken over product strategy for our entire organization. We have a lot of really experienced and great executives to help take this thing to the next level. With that, I'll open it up for questions. Yes, sir.
I mean, the obvious question, I'm surprised that academic libraries are only 15% of your business, but how do you think that federal cutbacks to university funding will affect your company?
Yeah. To comment on your first question, the company was founded to service corporate clients. Before we acquired SITE, we were 90-some-odd percent corporate. SITE had a much stronger academic product and academic focus than we did. One of the, frankly, value creation items that we looked at when we were bringing these companies together, SITE was very good at B2C, which is primarily academic users at a university. They also had a stronger academic product than we did. We had a stronger corporate product, including a global sales force to sell enterprise solutions into libraries and corporate. A lot of the SITE growth, which has been tremendous since we acquired them, is because our sales force had the customer relationships that take their product in there.
That's what drove the mix up, where we have a larger academic business today than we did even 18 months ago. To your second question, we're not sure yet. I'll make a couple of comments. One is on the university library budget side, we're going to see downward pressure. The question is, most of or a lot of those university budgets are spent on subscriptions to publishers to content. As there's more pressure on that budget, there's not a lot of line items to cut that are anywhere near the size of that. We have seen some universities, which you can Google and publicly find information on this, that have decided to pause or cancel subscription to one or more publishers and put our technology in there to buy things as they need them instead of subscribing to everything, whether they need it or not.
We have seen on one extreme, a very large library, one of the most recognized in the United States, actually stop all their publisher subscriptions and just use our product. There are videos on YouTube of that librarian talking at conferences about saving seven figures year over year by doing that. There could be a tailwind in this for one of our products. With the SITE product, what's driving the success there, even though there is some downward pressure on these university libraries and certainly uncertainty, is that all universities are struggling with, what are we going to do with AI? Are we going to put our head in the sand, and are we going to tell people they can't use it, or are we going to embrace it and try to train people how to utilize AI to help them?
Our top attended webinars are on how to implement an AI strategy in a university to make it a force multiplier for your students. Right now, we feel pretty good about academic, but I think it's going to take another quarter before we really understand what these Washington decisions are going to do to the academic side of the business. Corporate side, we have not seen anything that concerns us at this point.
Thank you. Yes, sir.
Thank you. Thank you. How do you, how does AI play into this? How do you, what are you doing with AI? I mean, you're not putting software in, but I mean, AI is going like crazy. Are you going to see those things that go, I mean, what are you providing?
Yeah. I think in terms of what we're providing, a whole bunch of different stuff is unfortunately the answer. The first thing we're providing is if you go to ChatGPT, you ask a question about scientific research, you're going to get answers not only based on the scientific research information they have access to, which is predominantly just the abstract of the article, not the full article, but just the abstract. You're also going to get all the conspiracy theory stuff out there on the internet about whether that vaccine's effective or not. Our tool focuses exclusively on the scientific research, and it reduces hallucinations because in most cases, we have access to the full article, not just the abstract of the article. Number one, we have better search results, fewer hallucinations.
Number two, we've used that technology to compare the article that you're looking at on screen with the other 180 million articles that are out there, and we've provided you with a badge that tells you how many of those other articles supported the conclusion in this article or contrasted the conclusion in this article. So we provide you and we're unique in that. We provide you, the user, with a better experience in terms of a FICO score or a Rotten Tomatoes score for the article they're looking at. Third thing we do is we allow you to throw a bunch of articles into a folder and summarize them, which is not unique, but we can also let you ask questions to extract tables of information out of these 50 articles. I want to see patients, age groups, outcomes, etc.
There is a lot of unique things we are doing with AI along that workflow that is beyond what the typical free AI engines, or paid for that matter, are doing today. A majority of these companies that are coming out seemingly every month saying, "Hey, we now do scientific research AI," they are only doing the abstract, or they are only doing free articles, the stuff that is commonly called OA. We do it on everything.
We're very specific and nearly focused, so better answers, less hallucinations. We also allow you the ability, once you find them after you do the search, you can acquire them. We manage your entitlements, so we know what you've subscribed to, where you've prepaid for discounts, and where you want to pay for the article by clicking and spending 40 bucks. We manage all that. We manage all of the rights that come with that article. If you've acquired an article that doesn't have AI rights, you can click and buy the AI rights and then throw it into ChatGPT, or you can throw it into our stuff, or you can throw it into Copilot and ask questions of that article.
In case it wasn't clear, we have access to content that they don't have access to.
Right. So ChatGPT, can they use your content or go behind your wall?
No.
Yeah. We don't allow that. For the most case, those types of systems are using the abstract of the article, not the full article.
Right. Other questions? Thank you so much for your time.