Simulations Plus(SLP) - 2022 Q1 - Quarterly Report

Financial Performance - Consolidated revenue increased by approximately $1.7 million or 16% to $12.4 million for the three months ended November 30, 2021, compared to $10.7 million for the same period in 2020[118] - Software-related revenue increased by $1.2 million or 19%, while service-related revenue increased by $566 thousand or 13% during the same period[119] - Gross profit rose by approximately $1.4 million or 17% to $9.7 million, driven by a 23% increase in software gross profit and a 6% increase in services gross profit[122] - Net income for the three months ended November 30, 2021, was $3.0 million, an increase of $547 thousand or 22% compared to the same period in 2020[118] - Overall gross margin percentage increased to 78% for the three months ended November 30, 2021, up from 77% for the same period in 2020[123] Operating Expenses - Total operating expenses increased by approximately $653 thousand or 13% to $5.9 million, with research and development costs rising by $221 thousand[125] Cash Flow and Investments - Net cash provided by operating activities was $3.6 million for the three months ended November 30, 2021, primarily from net income[138] - Net cash provided by investing activities during the three months ended November 30, 2021, was approximately $2.0 million, mainly due to proceeds from the sale of short-term investments of $16.1 million[140] - Cash used for investing activities during the three months ended November 30, 2020, was $25.9 million, primarily due to the purchase of short-term investments of $31.0 million[141] - As of November 30, 2021, the company had $41.7 million in cash and cash equivalents and $82.7 million in short-term investments[134] - Net cash provided by operating activities was $5.3 million for the three months ended November 30, 2020, primarily from net income of $2.5 million[139] Financial Position - Working capital as of November 30, 2021, was $130.3 million, with a current assets to current liabilities ratio of 14.6[144] - Total contractual obligations as of November 30, 2021, amounted to $5.895 million, with $5.044 million due within one year[146] - The effective tax rate increased to 21.5% for the three months ended November 30, 2021, up from 17.3% during the same period of the previous year[128] Market and Strategic Outlook - The company continues to seek opportunities for strategic acquisitions, which may require a substantial portion of cash reserves[136] - The company experienced a reduction in PKPD services during the year ended August 31, 2021, due to project disruptions and cancellations[147] - The company believes that the need for improved productivity in research and development will continue to drive the adoption of simulation and modeling tools[149] - The potential for growth in new markets, such as healthcare, remains uncertain, and the company will continue to explore these opportunities[150] - There has been no material change in the company's exposure to market risk from the previous reporting period[153]