Simulations Plus(SLP) - 2025 Q1 - Quarterly Report

Revenue and Profitability - Revenue increased by $4.4 million, or 31$18.9 million for the three months ended November 30, 2024, compared to $14.5 million for the same period in 2023[123] - Gross profit increased by$0.4 million, or 4%, to $10.2 million for the three months ended November 30, 2024, compared to$9.8 million for the same period in 2023[125] - Net income decreased by $1.7 million, or 89$0.2 million for the three months ended November 30, 2024, compared to $1.9 million for the same period in 2023[125] Expenses - Research and development costs increased by$0.4 million, or 19%, to $2.6 million for the three months ended November 30, 2024, compared to$2.2 million for the same period in 2023[129] - Sales and marketing expenses increased by $0.9 million, or 43$2.9 million for the three months ended November 30, 2024, compared to $2.0 million for the same period in 2023[130] - Stock-based compensation costs were$1.7 million for the three months ending November 30, 2024, compared to $1.3 million in 2023[166] Cash Flow and Investments - Net cash used in operating activities was$1.3 million for the three months ended November 30, 2024, compared to net cash provided of $0.2 million for the same period in 2023[138] - Net cash used in investing activities was$3.1 million for the three months ended November 30, 2024, compared to $16.9 million for the same period in 2023[141] - Cash, cash equivalents, and short-term investments totaled$18.2 million as of November 30, 2024[137] Acquisitions and Obligations - The Company acquired Pro-ficiency for an aggregate purchase price of $100 million in cash, with$1 million placed in escrow for post-closing adjustments[145] - The Company has a remaining obligation of up to $5.5 million related to the Immunetrics acquisition, expected to be paid in early 2025[148] - As of November 30, 2024,$30 million remains available for share repurchases under the authorized program, with no shares repurchased in the last three months[149] Tax and Financial Reporting - The effective tax rate increased to 24% for the three months ended November 30, 2024, compared to 19% for the same period in 2023[133] - There were no changes in internal controls over financial reporting that materially affected the Company's internal control during the most recent fiscal quarter[169] Software Development and Amortization - Capitalized computer software development costs were $0.7 million for the three months ended November 30, 2024, compared to$0.9 million for the same period in 2023[154] - Amortization of software development costs amounted to $0.8 million for the three months ended November 30, 2024, up from$0.4 million in 2023[155] Goodwill and Impairment - The Company performed goodwill impairment tests at the reporting unit level, with six reporting units identified as of November 30, 2024[159] - No impairment losses were recorded for intangible assets during the three months ended November 30, 2024 and 2023[161] Insurance and Coverage - The Company obtained a buyer's representation and warranty insurance policy providing up to $10 million in coverage for breaches related to the Pro-ficiency acquisition[147]