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Simulations Plus' Q1 Earnings Lag Estimates, Revenues Surge Y/Y
SLPSimulations Plus(SLP) ZACKS·2025-01-08 13:31

Earnings Performance - Simulations Plus reported Q1 fiscal 2025 adjusted earnings of 17 cents per share, a 5.6% YoY decline, missing the Zacks Consensus Estimate of 18 cents [1] - Quarterly revenues surged 31% YoY to 18.9million,drivenbyhigherSoftwaresegmentrevenuesandthePro−ficiencyacquisition,surpassingtheZacksConsensusEstimateby1.318.9 million, driven by higher Software segment revenues and the Pro-ficiency acquisition, surpassing the Zacks Consensus Estimate by 1.3% [2][3] - Organic revenue growth was 5% during the quarter [3] Revenue Breakdown - Software segment revenues (57% of total) rose 41% YoY to 10.7 million, driven by new customer wins and increased sales with existing customers [4] - GastroPlus, MonolixSuite, ADMET Predictor, ALI, and Others contributed 38%, 21%, 12%, 16%, and 13% respectively to total software revenues [4] - Services revenues (43%) improved 19% to 8.2million,thoughorganicrevenuesdeclined98.2 million, though organic revenues declined 9% due to client-driven data delays [8] Operational Metrics - Total operating expenses as a percentage of revenues decreased to 53% from 56% YoY [5] - Income from operations was 0.1 million compared to 1millionYoY[5]−AdjustedEBITDAmarginincreasedto241 million YoY [5] - Adjusted EBITDA margin increased to 24% from 23% in the prior-year quarter [5] Balance Sheet - Cash and short-term investments stood at 18.2 million as of Nov. 30, 2024, down from 20.3millionattheendoftheprior−yearperiod[6]FutureOutlook−SimulationsPlusexpectsrevenuesbetween20.3 million at the end of the prior-year period [6] Future Outlook - Simulations Plus expects revenues between 90 million and 93millionforfiscal2025,indicatinga28−3393 million for fiscal 2025, indicating a 28-33% increase from fiscal 2024 [7] - The Pro-ficiency acquisition is expected to contribute an additional 15-18milliontorevenues[7]−ThecompanyanticipatestheSoftwaresegmenttoaccountfor55−6018 million to revenues [7] - The company anticipates the Software segment to account for 55-60% of total revenues, with adjusted EPS between 1.07 and 1.20andadjustedEBITDAmarginbetween311.20 and adjusted EBITDA margin between 31% and 33% [7] Customer Metrics - The renewal rate for commercial customers was 83% (based on accounts) and 95% (based on fees), compared to 84% and 100% in the prior quarter [8] - Services backlog was 17.3 million at the end of the quarter, down 8.5% YoY due to cost-driven pullback by customers [9] Segment Performance - Quantitative Systems Pharmacology software and Clinical Pharmacology & Pharmacometrics business saw YoY declines of 14% and 6%, respectively [9] - Sales of the PBPK unit were down 9% YoY [9] Gross Margins - Gross margin for the quarter was 54%, down from 62% in the prior-year quarter [10] - Software segment gross margin was 75%, down from 87%, affected by higher costs related to the amortization of capitalized software development costs from the Pro-ficiency acquisition [10] - Services gross margin was 26%, down from 36%, due to lower organic segmental revenues [10] Industry Comparison - BlackBerry reported Q3 fiscal 2025 non-GAAP EPS of 2 cents, better than the estimated loss of 1 cent to EPS of 1 cent, with quarterly revenues of 162million,down7.4162 million, down 7.4% YoY [13] - Ciena Corporation reported Q4 fiscal 2024 adjusted EPS of 54 cents, missing the Zacks Consensus Estimate of 66 cents, with quarterly revenues dipping 0.5% YoY to 1,124.1 million [14] - Guidewire Software reported Q1 fiscal 2025 non-GAAP EPS of 43 cents, surpassing the Zacks Consensus Estimate by 43.3%, with revenues of $262.9 million, up 27% YoY [15]