Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Simulations Plus, Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Company Performance - Simulations Plus reported sales of $20.4 million for the third quarter of 2025, which is a 10% year-over-year increase but fell short of the consensus estimate of $20.9 million [3]. - The company had previously released preliminary third-quarter sales figures in June, which were lower than expectations at $19 million to $20 million, compared to a consensus of $22.78 million [3]. - Following the release of the third-quarter earnings report, Simulations Plus stock experienced a decline of 25.75% on July 15, 2025 [3]. Group 2: Legal Action - Investors who purchased Simulations Plus securities may be entitled to compensation through a class action lawsuit being prepared by Rosen Law Firm, with no out-of-pocket fees or costs due to a contingency fee arrangement [2]. - Interested investors can join the prospective class action by submitting a form or contacting the law firm directly [2]. Group 3: Rosen Law Firm's Credentials - Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time [4]. - The firm was ranked No. 1 by ISS Securities Class Action Services for the number of securities class action settlements in 2017 and has consistently ranked in the top 4 since 2013, recovering hundreds of millions of dollars for investors [4]. - In 2019, the firm secured over $438 million for investors, and its founding partner was recognized as a Titan of Plaintiffs' Bar by Law360 in 2020 [4].

Revenue Performance - Total revenues decreased by $0.5 million, or 3%, to $18.4 million for the three months ended November 30, 2025, compared to $18.9 million for the same period in 2024[126]. - Software-related revenue decreased by $1.8 million, or 17%, primarily due to a $1.4 million decline in revenue from Clinical Operations and a $0.4 million decline from Development[126]. - Service-related revenue increased by $1.3 million, or 16%, driven by organic growth of $0.8 million from Commercialization and $0.5 million from Development[126]. - The company generated revenue primarily from software licenses, consulting services, and customized software platforms for the pharmaceutical industry[151]. Profitability - Gross profit increased by $1.5 million, or 15%, to $10.9 million for the three months ended November 30, 2025, compared to $10.2 million for the same period in 2024[130]. - Net income increased by $470,000, or 228%, to $676,000 for the three months ended November 30, 2025, compared to $206,000 for the same period in 2024[125]. Expenses - Research and development costs increased by $1.3 million, or 51%, to $3.9 million for the three months ended November 30, 2025, reflecting higher investment in product and platform development[133]. - R&D spend as a percentage of revenue increased to 16% for the three months ended November 30, 2025, from 10% for the same period in 2024[134]. - Sales and marketing expenses increased by $0.3 million, or 12%, to $3.2 million for the three months ended November 30, 2025[135]. - General and administrative expenses decreased by $1.4 million, or 25%, to $4.0 million for the three months ended November 30, 2025[136]. - Stock-based compensation costs were $1.5 million for the three months ended November 30, 2025, compared to $1.7 million for the same period in 2024[168]. Cash Flow - Cash provided by operating activities improved by $5.5 million to $4.2 million for the three months ended November 30, 2025, compared to net cash used of $1.3 million for the same period in 2024[144]. - Net cash used in operating activities was $1.3 million for the three months ended November 30, 2024, primarily due to a $3.7 million increase in accounts receivable and a $4.1 million decrease in other liabilities[145]. - Net cash used in investing activities was $4.9 million for the three months ended November 30, 2025, including $5.5 million invested in short-term investments and $0.9 million in capitalized software development costs[146]. - Net cash used in investing activities was $3.1 million for the three months ended November 30, 2024, with $3.5 million invested in short-term investments and $0.6 million in capitalized software development costs[147]. Capital Expenditures - Capitalized computer software development costs were $0.9 million and $0.7 million for the three months ended November 30, 2025, and November 30, 2024, respectively[155]. - Amortization of software development costs amounted to $0.7 million for the three months ended November 30, 2025, compared to $0.8 million for the same period in 2024[156]. - The company incurred $0.2 million for investing in intangible assets and a net working capital settlement related to the Pro-ficiency acquisition[147]. Share Repurchase - As of November 30, 2025, $30 million remains available for additional share repurchases under the authorized repurchase program[149]. Impairment - No impairment losses were recorded during the three months ended November 30, 2025, and November 30, 2024[162].

Core Insights - Simulations Plus, Inc. (SLP) reported first-quarter fiscal 2026 adjusted earnings of 13 cents per share, missing the Zacks Consensus Estimate by 27.8% and down from 17 cents in the prior-year quarter [1][12] - Quarterly revenues decreased by 3% year over year to $18.4 million, with software revenue declining amid strong service momentum, although the top line exceeded the consensus mark by 2% [2][12] Revenue Breakdown - Software revenues, accounting for 48% of total revenues, fell 17% year over year to $8.9 million, primarily due to challenging market conditions and client consolidation [5][12] - Services revenues, which made up 52% of total revenues, increased by 16% to $9.5 million, driven by strong performance in the MedCom business [7][12] Client and Market Dynamics - SLP ended the quarter with 302 commercial clients, generating an average revenue of $97,000 per client and maintaining an 88% renewal rate [6] - Management expressed confidence in the remainder of fiscal 2026, citing strong bookings, annual software price increases, and improving funding conditions for biopharma clients [3][12] Financial Metrics - The gross margin for the quarter was 59%, up from 54% in the prior-year quarter, with software segment gross margin at 84% and services gross margin at 36% [8][9] - Adjusted EBITDA declined to $3.5 million from $4.5 million in the prior-year quarter, with an adjusted EBITDA margin of 19% compared to 24% previously [9][10] Guidance and Outlook - SLP reaffirmed its fiscal 2026 revenue guidance, expecting revenues between $79 million and $82 million, indicating a 0-4% increase from fiscal 2025 [14] - The company anticipates adjusted earnings per share to be between $1.03 and $1.10, with an adjusted EBITDA margin between 26% and 30% [14]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Frederick broke down software revenue contributions by product category for the quarter. Development products—primarily GastroPlus and MonolixSuite—accounted for 81% of software revenue, while discovery products (primarily ADMET Predictor) were 15% and clinical operations products (primarily Pro-ficiency) were 4%.Adjusted profitability metrics were described as in line with expectations. O’Connor said adjusted EBITDA was $3.5 million and adjusted EPS was $0.13 for the quarter.Chief Executive Officer Shawn O ...

Financial Data and Key Metrics Changes - Total revenue decreased by 3% to $18.4 million, with adjusted EBITDA at $3.5 million and adjusted EPS at $0.13, aligning with internal expectations [4][8] - Total gross margin improved to 59%, with software gross margin at 84% and services gross margin at 36%, compared to 54%, 75%, and 26% respectively in the prior period [10][11] - The company ended the quarter with $35.7 million in cash and short-term investments, maintaining a strong capital position with no debt [11] Business Line Data and Key Metrics Changes - Software revenue decreased by 17%, contributing 48% to total revenue, while services revenue increased by 16%, contributing 52% [8] - Discovery products accounted for 15% of software revenue, development products for 81%, and clinical ops products for 4% [8] - Services revenue from development, including biosimulation services, represented 71% of services revenue, while commercialization services accounted for 29% [9] Market Data and Key Metrics Changes - The company reported an 88% renewal rate for the quarter, with an average revenue per client of $97,000 [8] - The ending backlog for services increased by 18% to $20.4 million from $17.3 million last year, indicating a healthy pipeline of projects [9] Company Strategy and Development Direction - The company aims to advance towards an integrated product ecosystem combining validated science, cloud-scale performance, and AI-driven modeling [5][6] - Strategic acquisitions and ongoing investment in science are key to broadening the company's reach and impact in the market [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted positive trends in the macro environment, including improved biotech funding and reduced tariff threats, which are expected to positively impact client budgets [4][16] - There is optimism regarding increased spending from clients, with a backlog of projects ready to be initiated [17] Other Important Information - The company maintains its guidance for fiscal year 2026, projecting total revenue between $79-$82 million and adjusted EBITDA margin between 26%-30% [11] - The company is focused on enhancing AI capabilities within its product offerings, which is expected to contribute to pricing flexibility and license renewals [62] Q&A Session Summary Question: Can you provide more details on the positive commentary regarding Most Favored Nations and lower tariff risks? - Management indicated that stabilization in pricing agreements and reduced tariff discussions have positively impacted client budget preparations, leading to increased contract activity [16][17] Question: What is the expected mix cadence for software in the remaining quarters? - Management confirmed no change in guidance for software service mix, with expectations for stronger performance in the second and third quarters due to seasonal renewals [24][25] Question: Did consolidation in large pharma impact software renewals in the first quarter? - Management noted that while consolidation is a headwind, there was no significant impact on the first quarter results, and the outlook remains stable [27][28] Question: How is the integration of AI going with the core platform? - Initial AI features have received favorable responses, and the company plans to monetize these advancements through pricing adjustments and new modules [62] Question: What is the outlook for commercialization services? - The medical communications segment, which is part of the Pro-ficiency acquisition, showed strong growth and is expected to continue performing well in fiscal year 2026 [52][54]

Financial Data and Key Metrics Changes - Total revenue decreased by 3% to $18.4 million, with adjusted EBITDA at $3.5 million and adjusted EPS at $0.13 [4][8] - Total gross margin improved to 59%, with software gross margin at 84% and services gross margin at 36%, compared to 54%, 75%, and 26% respectively in the prior period [10][11] - The company ended the quarter with $35.7 million in cash and short-term investments, remaining well-capitalized with no debt [11] Business Line Data and Key Metrics Changes - Software revenue decreased by 17%, contributing 48% to total revenue, while services revenue increased by 16%, contributing 52% [8] - Discovery products accounted for 15% of software revenue, development products for 81%, and clinical ops products for 4% [8] - Services revenue from development, including biosimulation services, represented 71% of services revenue, while commercialization services represented 29% [9] Market Data and Key Metrics Changes - The company reported an 88% renewal rate for the quarter, with an average revenue per client of $97,000 [8] - The ending backlog for services increased by 18% to $20.4 million from $17.3 million last year, indicating a healthy pipeline of services projects [9] Company Strategy and Development Direction - The company aims to advance towards an integrated product ecosystem combining validated science, cloud-scale performance, and AI-driven services [5][6] - Strategic acquisitions and ongoing investment in science are key to broadening the company's reach and impact in the market [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted positive trends in the macro environment, including improved biotech funding and reduced tariff threats, which are expected to positively impact client budgets [4][16] - There is optimism regarding increased spending from clients, which is anticipated to lead to higher software activity following the uptick in services [4][17] Other Important Information - The company maintains its guidance for fiscal year 2026, projecting total revenue between $79-$82 million and adjusted EBITDA margin between 26%-30% [11] - The company is focused on enhancing its AI capabilities and integrating them into its product offerings, which is expected to provide pricing flexibility and improve client engagement [62] Q&A Session Summary Question: Can you provide more details on the positive commentary regarding Most Favored Nations and its impact on customer budgets? - Management indicated that stabilization in pricing agreements and reduced tariff risks are positively impacting client budget discussions, leading to increased proposals for next year [16][17] Question: What is the expected mix cadence for software in the remaining quarters? - Management confirmed no change in guidance for software service mix, with expectations for stronger performance in the second and third quarters due to seasonal renewals [24][25] Question: Did consolidation in large pharma impact software renewals in the first quarter? - Management noted that while consolidation is a headwind, there was no significant impact on the first quarter results, and the outlook remains stable [27][28] Question: How is the integration of AI features progressing? - Initial responses to AI features have been favorable, with plans for monetization through modules and new products in the future [62] Question: What is the outlook for the commercialization services growth? - Management reported strong performance in medical communications, which is expected to continue positively in fiscal year 2026 [52][54]

Financial Data and Key Metrics Changes - Total revenue decreased by 3% to $18.4 million, with adjusted EBITDA at $3.5 million and adjusted EPS at $0.13 [4][8] - Total gross margin improved to 59%, with software gross margin at 84% and services gross margin at 36%, compared to 54%, 75%, and 26% respectively in the prior period [10][11] - The company ended the quarter with $35.7 million in cash and short-term investments, maintaining a strong capital position with no debt [11] Business Line Data and Key Metrics Changes - Software revenue decreased by 17%, contributing 48% of total revenue, while services revenue increased by 16%, contributing 52% of total revenue [8] - Discovery products accounted for 15% of software revenue, development products for 81%, and clinical ops products for 4% [8] - Services revenue from development services represented 71% and commercialization services represented 29% of total services revenue [9] Market Data and Key Metrics Changes - The company reported an 88% renewal rate for the quarter, with an average revenue per client of $97,000 [8] - The ending backlog for services increased by 18% to $20.4 million from $17.3 million last year, indicating a healthy pipeline of services projects [9] Company Strategy and Development Direction - The company aims to advance towards an integrated product ecosystem combining validated science, cloud-scale performance, and AI-driven services [5][13] - Strategic acquisitions and ongoing investment in scientific engines are key to broadening the company's reach and impact in the market [13] Management's Comments on Operating Environment and Future Outlook - Management noted positive trends in the macro environment, including the stabilization of Most Favored Nation pricing agreements and an improving biotech funding environment [4] - There is optimism regarding increased client spending, which is expected to lead to higher software activity in the future [4][17] Other Important Information - The company maintains its fiscal year 2026 guidance for total revenue between $79-$82 million, with year-over-year revenue growth between 0-4% [11] - The company plans to hold an investor day on January 21st to provide more insights into its strategy and product roadmap [67] Q&A Session Summary Question: Can you provide more details on the positive commentary regarding Most Favored Nations and lower tariff risks? - Management indicated that stabilization in pricing agreements and reduced tariff threats are positively impacting client budgets, leading to increased proposals and contracts [16][17] Question: What is the expected mix cadence for software in the remaining quarters? - Management confirmed no change in guidance for software service mix, with expectations for stronger performance in the second and third quarters due to seasonal renewals [24][25] Question: Did consolidation in large pharma impact software renewals in the first quarter? - Management noted no significant impact from consolidation in the first quarter, with expectations that the current acquisition activity will not heavily affect renewals [26][28] Question: How is the integration of AI with the core platform progressing? - Initial AI features have received favorable responses, and the company is exploring monetization opportunities through new modules and pricing adjustments [62] Question: Is the growth in commercialization services mainly from Pro-ficiency? - Yes, the growth in commercialization services is attributed to the Pro-ficiency acquisition, particularly in medical communications [52][54]

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Earnings Call: Q1 - FY26 January 8, 2026 $0.03 Diluted EPS $18.4M Revenue 19% Adj. EBITDA Margin -3% Revenue Decline Current period Prior Year Comparison (1Q25) $0.13 Adj. Diluted EPS $18.9M Revenue $0.01 Diluted EPS 24% Adj. EBITDA Margin +31% $0.17 Revenue Growth Adj. Diluted EPS Trailing Twelve Months (TTM) Highlights ($3.20) Diluted EPS (1) $78.7M Revenue 27% Adj. EBITDA Margin +6% Revenue Growth Current period Prior Year Comparison (1Q25) $0.98 Adj. Diluted EPS $74.4M Revenue $0.40 Diluted EPS 29% Adj. ...