The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Simulations Plus imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the ...

Core Insights - Simulations Plus has acquired Pro-ficiency Holdings, Inc. for approximately $100 million, enhancing its presence in drug development from pre-clinical to commercialization [1][9] - The acquisition expands Simulations Plus' total addressable market by adding $4 billion in revenue opportunities in clinical simulations training, analytics, and medical communications [11] Financial Performance - Software revenues, which account for 63% of total quarterly revenues, increased by 11% year over year to $11.6 million, while service revenues (37%) improved by 27% to $6.7 million [4] - Overall sales for the last reported quarter rose by 16%, driven by higher software revenues in Clinical Pharmacology & Pharmacometrics and Cheminformatics business units [12] Product Development - The company launched the GastroPlus X (GPX) platform in May 2024, which integrates various modeling and simulation tasks, significantly reducing time spent on model setup and data management [5] - The DILIsym software licenses were renewed by the FDA for the seventh consecutive time, aiding pharmaceutical development teams in understanding compounds and safe dosing methods [14] Market Position - Simulations Plus is recognized in the biosimulation market, focusing on drug discovery, development, research, and regulatory submissions [3] - The acquisition of Pro-ficiency is expected to strengthen client relationships and create cross-selling opportunities within the life sciences sector [11]

PART I. FINANCIAL INFORMATION [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, highlighting 18% revenue growth for the six-month period despite gross margin compression Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Feb 29, 2024 | Aug 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $37,031 | $57,523 | | Short-term investments | $71,473 | $57,940 | | Total current assets | $127,957 | $130,372 | | Goodwill | $19,099 | $19,099 | | Total assets | $193,973 | $186,101 | | **Liabilities & Equity** | | | | Total current liabilities | $14,528 | $11,987 | | Total liabilities | $16,935 | $16,072 | | Total shareholders' equity | $177,038 | $170,029 | | Total liabilities and shareholders' equity | $193,973 | $186,101 | Condensed Consolidated Statements of Operations Highlights (in thousands, except EPS) | Metric | Three Months Ended Feb 29, 2024 | Three Months Ended Feb 28, 2023 | Six Months Ended Feb 29, 2024 | Six Months Ended Feb 28, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $18,305 | $15,750 | $32,805 | $27,714 | | Gross profit | $13,221 | $13,130 | $23,069 | $22,423 | | Income from operations | $4,442 | $4,034 | $5,402 | $4,912 | | Net income | $4,029 | $4,174 | $5,974 | $5,419 | | Diluted EPS | $0.20 | $0.20 | $0.29 | $0.26 | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended, in thousands) | Cash Flow Activity | Feb 29, 2024 | Feb 28, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,972 | $10,248 | | Net cash used in investing activities | ($24,380) | ($1,073) | | Net cash used in financing activities | ($2,084) | ($21,450) | | Net decrease in cash and cash equivalents | ($20,492) | ($12,275) | - As of February 29, 2024, the company had remaining performance obligations of **$10.8 million**, with **94%** expected to be recognized as revenue over the next 12 months[31](index=31&type=chunk) - A subsequent event in March 2024 involved a **$2.5 million** cash earnout payment to former equity holders of Immunetrics[137](index=137&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 18% revenue growth for the six-month period, highlighting gross margin compression and strong liquidity [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Detailed operational comparison shows 18% six-month revenue growth, but gross margin declined due to surging costs Three-Month Operational Comparison (in thousands) | Metric | Q2 FY2024 | Q2 FY2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $18,305 | $15,750 | $2,555 | 16% | | Gross Profit | $13,221 | $13,130 | $91 | 1% | | Gross Margin | 72% | 83% | - | - | | Income from Operations | $4,442 | $4,034 | $408 | 10% | | Net Income | $4,029 | $4,174 | ($145) | (3)% | Six-Month Operational Comparison (in thousands) | Metric | H1 FY2024 | H1 FY2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $32,805 | $27,714 | $5,091 | 18% | | Gross Profit | $23,069 | $22,423 | $646 | 3% | | Gross Margin | 70% | 81% | - | - | | Income from Operations | $5,402 | $4,912 | $490 | 10% | | Net Income | $5,974 | $5,419 | $555 | 10% | - The increase in cost of revenues for the six-month period was primarily driven by a **$1.9 million** impact from internal reorganization, **$1.1 million** from the Immunetrics acquisition, and **$1.3 million** in compensation-related increases[159](index=159&type=chunk) - Six-month software revenue grew **16%** (**$2.6 million**) due to higher sales from GastroPlus®, Monolix™, QSP, and ADMET Predictor® Services revenue grew **22%** (**$2.4 million**), with the Immunetrics acquisition contributing **$1.1 million** to this increase[157](index=157&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Maintains strong liquidity with significant cash and investments, and $30 million remaining in its share repurchase program - As of February 29, 2024, the Company had **$37.0 million** in cash and cash equivalents, **$71.5 million** in short-term investments, and working capital of **$113.4 million**[168](index=168&type=chunk) - The company has a share repurchase program with **$30 million** remaining available for future repurchases after completing a **$20 million** accelerated share repurchase (ASR) agreement in May 2023[170](index=170&type=chunk) - In March 2024, the Company made a **$2.5 million** cash earnout payment related to the Immunetrics acquisition A potential catch-up opportunity exists for the second earnout payment, which could increase from a target of **$4.0 million** to **$5.5 million**[171](index=171&type=chunk) [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) Management identifies critical accounting estimates for revenue recognition, software development, intangible assets, and stock compensation - Key areas requiring management's judgment include **revenue recognition**, **capitalized software development costs**, **valuation of intangible assets and goodwill**, **business acquisitions**, and **stock-based compensation**[189](index=189&type=chunk)[196](index=196&type=chunk)[205](index=205&type=chunk) - Capitalization of software development costs requires judgment on technological feasibility, future revenue, and economic life For the six months ended Feb 29, 2024, the company capitalized **$1.8 million** in software development costs[193](index=193&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material change in the company's market risk exposure from its prior Annual Report on Form 10-K - As of February 29, 2024, there has been no material change in the company's exposure to market risk from that described in its most recent Annual Report[206](index=206&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective with no material changes in internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of February 29, 2024[207](index=207&type=chunk) - No changes in internal controls over financial reporting occurred during the most recent fiscal quarter that materially affected, or are likely to materially affect, the company's internal control over financial reporting[208](index=208&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material legal proceedings and is unaware of any pending or threatened actions - The company is not a party to any legal proceedings and is not aware of any pending or threatened legal proceedings of any kind[103](index=103&type=chunk)[210](index=210&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material updates or changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material updates or changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2023[211](index=211&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales or share repurchases occurred, with $30 million remaining in the authorized repurchase program - No shares were repurchased during the three and six months ended February 29, 2024[216](index=216&type=chunk) - After completing a **$20 million** accelerated share repurchase (ASR), **$30 million** remains available for additional repurchases under the company's authorized program[215](index=215&type=chunk) [Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) No defaults upon senior securities were reported - None[217](index=217&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Not applicable[218](index=218&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) Discloses termination and adoption of Rule 10b5-1 trading plans for directors and officers during the quarter - Discloses the termination and adoption of Rule 10b5-1 trading plans for directors Dr Lisa LaVange and Dr Daniel Wiener, and the termination of a plan for Business Unit President John DiBella[219](index=219&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q report, including CEO/CFO certifications and Inline XBRL documents - Lists filed exhibits, including CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and Inline XBRL data files (Exhibit 101)[221](index=221&type=chunk)

2Q24 PBPK QSP CPP REG Backlog $18.0 $17.0 $15.4 2Q22 2Q23 2Q24 17 Income Statement Summary - Q2 FY24 (in millions, except Diluted EPS) | --- | --- | --- | --- | --- | |----------------------------|-------|----------|-------|----------| | | 2Q24 | % of Rev | 2Q23 | % of Rev | | Revenue | $18.3 | 100% | $15.8 | 100% | | Revenue growth | 16% | | 6% | | | Gross profit | 13.2 | 72% | 13.1 | 83% | | R&D | 1.3 | 7% | 1.3 | 8% | | S&M | 1.9 | 11% | 1.7 | 11% | | G&A | 5.5 | 30% | 6.0 | 38% | | Total operating exp | ...

Financial Data and Key Metrics Changes - Total revenue increased by 16% to $18.3 million, with software revenue up 11% and services revenue up 27% [24][31] - Diluted earnings per share remained at $0.20, reflecting a decrease in diluted shares outstanding due to last year's share repurchase [32] - Total gross margin decreased to 72% from 83% year-over-year, with software gross margin at 88% versus 92% and services margin at 44% versus 66% [26][31] - Adjusted EBITDA increased to $7.1 million, maintaining 39% of revenue [33] Business Line Data and Key Metrics Changes - Software segment revenue increased by 11% in Q2 and 16% for the six-month period, with strong demand except for Asia [13][24] - Cheminformatics business unit saw a 14% revenue growth in Q2 and 10% year-to-date, driven by ADMET Predictor [14] - Clinical Pharmacology & Pharmacometrics (CPP) business unit delivered 38% revenue growth for the quarter and 21% year-to-date [19] - Quantitative Systems Pharmacology (QSP) revenue decreased by 6% for the quarter but increased by 77% year-to-date [20] Market Data and Key Metrics Changes - Biotech funding has been strong, particularly for companies with drug candidates in clinical trials, indicating a healthier market compared to the previous year [8][9] - Large pharmaceutical companies are experiencing varied funding based on their individual circumstances, with some companies like Pfizer announcing significant cutbacks [45][46] - The Asian market, particularly China, is lagging in spending, impacting overall growth [13][55] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities in drug discovery and development, leveraging its access to accurate public and private data as a competitive edge [10][12] - A reorganization of business units was implemented to improve operational performance and profitability, with all services personnel moved into cost of revenue departments [25][26] - The company is committed to capital allocation strategies, seeking opportunities for strategic acquisitions and partnerships [37] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding demand for modeling and simulation software products as market conditions improve [9][39] - The company anticipates total revenue for fiscal 2024 to be between $66 million and $69 million, with year-over-year growth of 10% to 15% [40] - Management highlighted the importance of maintaining a strong balance sheet with no debt and a seasoned management team [41] Other Important Information - Total backlog at the end of Q2 was $18 million, indicating strong demand as the company enters the second half of the fiscal year [15][28] - The average revenue per customer increased to $95,000, with a customer renewal rate of 93% based on fees [27] Q&A Session Summary Question: How is the macroenvironment affecting large pharma funding? - Management noted that large pharma funding is influenced more by individual company circumstances rather than a general funding issue [45][46] Question: How quickly does biotech funding translate into bookings? - Management indicated that there is typically a lag of six to nine months before funding translates into purchasing decisions [48] Question: What drove the strong performance in ADMET Predictor? - The increase in customers and upsells was attributed to greater market acceptance and the technology's relevance amidst new AI solutions [50] Question: Can you discuss the sequential increase in GastroPlus revenue? - Management explained that the harmonization process completed last year has led to a different seasonal pattern, contributing to revenue growth [53][55] Question: How is Monolix performing in relation to clinical trial activity? - Monolix has been growing rapidly and is indirectly correlated with clinical trial activity, as demand for modeling and simulation increases with development programs [56][59] Question: What is the impact of the new corporate development effort? - The new effort aims to identify acquisition opportunities and potentially invest in companies that utilize the company's technology in drug development [62][64] Question: How does the company differentiate itself from newer AI ventures? - Management emphasized their long-standing experience and data access as key differentiators, maintaining a strong position in the market [66][72]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended November 30, 2023 OR o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______ Commission file number: 001-32046 Simulations Plus, Inc. (Name of registrant as specified in its charter) California 95-4595609 (Stat ...

Simulations Plus, Inc. (NASDAQ:SLP) Q1 2024 Earnings Conference Call January 3, 2024 5:00 PM ET Company Participants Tamara Gonzalez - Investor Relations, Financial Profiles Shawn O'Connor - Chief Executive Officer Will Frederick - Chief Financial Officer and Chief Operating Officer Conference Call Participants Matt Hewitt - Craig-Hallum Capital Group David Larsen - BTIG François Brisebois - Oppenheimer Operator Greetings, and welcome to the Simulations Plus First Quarter Fiscal 2024 Financial Results Confe ...

2 CURRENT PERIOD | --- | --- | --- | --- | |------------------------------|-------------|-------------|---------| | | | | | | Prior Year Comparison (1Q23) | | | | | $12.0M | $0.06 | 25% | $15.8M | | Revenue | Diluted EPS | Adjusted | Backlog | | | | EBITDA as % | | | | | of Revenue | | GastroPlus® (Physiologically Based Pharmacokinetics) Q1 Revenue Growth General | --- | --- | |--------------------|-------------------------------------------------------------------------------------------------------------- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number: 001-32046 Simulations Plus, Inc. (Exact name of registrant as specified in its charter) California (State or othe ...

Simulations Plus, Inc. (NASDAQ:SLP) Q4 2023 Earnings Conference Call October 25, 2023 5:00 PM ET Company Participants Tamara Gonzales - Investor Relations, Financial Profiles Shawn O'Connor - Chief Executive Officer Will Frederick - Chief Financial Officer Conference Call Participants Francois Brisebois - Oppenheimer Matt Hewitt - Craig-Hallum David Larsen - BTIG David Windley - Jefferies Operator Greetings, and welcome to the Simulations Plus Fourth Quarter Fiscal 2023 Financial Results Conference Call. At ...