Financial Performance - Revenue for 3Q24 reached $18.5 million, a 14% increase compared to $16.2 million in 3Q23[31] - Year-to-date (YTD) revenue for FY24 was $51.3 million, representing a 17% growth from $43.9 million in the same period of FY23[33] - Gross profit for 3Q24 was $13.3 million, resulting in a gross margin of 71%, which is lower than the 82% gross margin in 3Q23[31] - Net income for 3Q24 was $3.1 million ($0.15 diluted EPS), compared to $4.0 million ($0.20 diluted EPS) in 3Q23[31] - Adjusted EBITDA for 3Q24 was $5.7 million, representing 31% of revenue, compared to $6.5 million, or 40% of revenue, in 3Q23[31] Revenue Breakdown - Software revenue in 3Q24 was $11.9 million, an 12% increase from $10.6 million in 3Q23[42] - Services revenue in 3Q24 was $6.6 million, an 18% increase from $5.6 million in 3Q23[42] - The revenue mix in 3Q24 was 64% software and 36% services[42] - Total backlog was $19.6 million [51] Software Performance - Cheminformatics (ADMET Predictor) software revenue grew by 15% in 3Q24 [55] - Physiologically Based Pharmacokinetics (GastroPlus) software revenue grew by 7% in 3Q24 [56] - Clinical Pharmacology & Pharmacometrics (MonolixSuite) software revenue grew by 13% in 3Q24 [56]

Financial Performance - Total revenue for the third quarter of fiscal 2024 increased 14% to $18.5 million compared to the same quarter in 2023[15] - Software revenue rose 12% to $11.9 million, accounting for 64% of total revenue, while services revenue increased 18% to $6.6 million, representing 36% of total revenue[15] - Gross profit remained constant at $13.3 million, with a gross margin of 71%[15] - Adjusted EBITDA for the quarter was $5.7 million, representing 31% of total revenue[15] - Net income for the quarter was $3.1 million, with diluted EPS of $0.15, down from $4.0 million and $0.20 in the same quarter last year[15] - Total revenue for the first nine months of fiscal 2024 increased 17% to $51.3 million, with software revenue at $31.1 million and services revenue at $20.2 million[5] - Adjusted EBITDA for FY 2024 YTD is reported at $9.1 million, compared to $10.0 million for the full year of 2023[32] - The company reported a net income of $4.0 million for Q3 FY 2024, compared to $4.2 million for FY 2023[32] - Net income for Q3 2023 was $4.0 million, a decrease from $4.2 million in Q2 2023, while FY 2023 net income stands at $10.0 million[45] - Adjusted EBITDA for Q3 2023 reached $6.5 million, compared to $6.2 million in Q2 2023, with FY 2023 total at $20.6 million[48] - Total revenue for Q3 2023 was $16.2 million, up from $15.8 million in Q2 2023, with FY 2023 revenue at $59.6 million[50] Guidance and Strategy - The company maintains full-year revenue guidance of $69 million to $72 million, with expected revenue growth of 15% to 20%[21] - The company has decided to discontinue its quarterly cash dividend to focus on growth initiatives, with the final dividend of $0.06 per share to be paid on August 5, 2024[22] - The company remains committed to a disciplined growth strategy aimed at delivering long-term returns for shareholders[34] Assets and Liabilities - Total assets increased to $192.7 million as of May 31, 2024, compared to $186.1 million on August 31, 2023, reflecting a growth of approximately 3.4%[29] - Cash and cash equivalents rose significantly to $109.1 million from $57.5 million, marking an increase of 89.8%[29] - Total current liabilities decreased to $11.3 million from $12.0 million, a reduction of approximately 5.6%[29] - Retained earnings increased to $30.7 million from $25.2 million, reflecting a growth of 21.9%[29] - Total shareholders' equity rose to $180.9 million from $170.0 million, an increase of approximately 6.0%[29] Business Developments - The acquisition of Pro-ficiency is progressing as planned, enhancing the company's capabilities in simulations and AI technologies[20] - The launch of GastroPlus X, a new generation of PBPK/PBBM modeling software, is expected to significantly contribute to the company's offerings[19] - The newly formed Clinical Simulations and Medical Communications (CSMC) business unit is expected to contribute approximately $3 million to fiscal 2024 revenue[34] Customer Metrics - Average Revenue per Customer in the commercial segment was $97.0 thousand, showing a decrease from $110.0 thousand in the previous quarter[30] Operational Metrics - Operating margin for Q3 2023 was 25.2%, compared to 25.6% in Q2 2023, with FY 2023 operating margin at 14.6%[48] - Cash flow from operations in Q3 2023 was $8.5 million, up from $5.5 million in Q2 2023, with FY 2023 cash flow totaling $21.9 million[48] - The backlog for services stood at $18.0 million in Q3 2023, a decrease from $19.5 million in Q2 2023[49] Expenses - Mergers & acquisitions expenses for Q3 2023 were $0.4 million, up from $0.1 million in Q2 2023, with total expenses for FY 2023 at $1.7 million[45]

Core Insights - The upcoming earnings report for Simulations Plus is expected to show a decline in earnings per share (EPS) by 15% year-over-year, with a consensus estimate of $0.17 per share [12]. - Revenue for the quarter is projected to be $18.07 million, reflecting an increase of 11.3% compared to the same quarter last year [2]. - The consensus EPS estimate has been revised down by 52.63% over the last 30 days, indicating a significant reassessment by analysts [13]. Earnings Prediction Insights - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Simulations Plus is the same as the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [5]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Simulations Plus currently holds a Zacks Rank of 4 (Sell), which complicates the prediction of an earnings beat [22]. Historical Performance - Over the last four quarters, Simulations Plus has only beaten consensus EPS estimates once [23]. - The company's earnings surprise history is a critical factor for analysts when estimating future earnings, as it reflects the company's ability to meet or exceed expectations [26]. Market Reactions - The stock's movement post-earnings report will depend on how actual results compare to expectations, with potential for upward movement if results exceed estimates, and downward movement if they fall short [11]. - It is noted that an earnings beat does not guarantee a stock price increase, as other factors may influence investor sentiment [17]. Conclusion - Investors should closely monitor the upcoming earnings report on July 2, 2024, as it may significantly impact the stock's performance based on the comparison of actual results to consensus estimates [11].

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 ...

The transaction, valued at roughly $100 million in cash, signifies a strategic move for Simulations Plus in augmenting its footprint across the drug development continuum, from pre-clinical protocols to product commercialization. The acquisition solidifies Simulation Plus' portfolio, bolstering its scientific skills, drug development expertise, data management acumen, predictive analytics and biosimulation capabilities. Simulation Plus is a well-known name in the biosimulation market and consulting services ...

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 | ...

Simulations Plus, Inc. (NASDAQ:SLP) Q2 2023 Results Earnings Conference Call April 4, 2024 5:00 PM ET Company Participants Lisa Fortuna - Investor Relations, Financial Profiles Shawn O'Connor - Chief Executive Officer Will Frederick - Chief Financial Officer and Chief Operating Officer Conference Call Participants Matthew Hewitt - Craig-Hallum Capital Group David Larsen - BTIG LLC François Brisebois - Oppenheimer & Co. Inc. Operator Greetings. And welcome to the Simulations Plus Second Quarter Fiscal 2024 F ...

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 ...