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SLP's Q2 Earnings Top, Sales Up Y/Y Despite Industry Headwinds
SLPSimulations Plus(SLP) ZACKS·2025-04-04 13:45

Core Insights - Simulations Plus, Inc. (SLP) reported second-quarter fiscal 2025 adjusted earnings of 31 cents per share, a 3% decline year over year, but exceeded the Zacks Consensus Estimate of 25 cents per share [1] - Quarterly revenues increased by 23% year over year to 22.4million,drivenbygrowthinsoftwareandservicessegments,withsignificantcontributionsfromflagshipsolutions[2][3]RevenueBreakdown−Softwarerevenues,accountingfor6022.4 million, driven by growth in software and services segments, with significant contributions from flagship solutions [2][3] Revenue Breakdown - Software revenues, accounting for 60% of total revenues, rose 16% year over year to 13.5 million, supported by new customer acquisitions and increased sales to existing customers [4] - Services revenues, making up 40% of total revenues, improved by 34% to 8.9million,althoughorganicgrowthremainedflatyearoveryear[5]−Thetotalvalueofservicesprojectshandledduringthequarterwas8.9 million, although organic growth remained flat year over year [5] - The total value of services projects handled during the quarter was 203 million, with a 13% year-over-year increase in backlog, totaling 20.4million[6]OperatingPerformance−Grossmarginforthequarterwas5920.4 million [6] Operating Performance - Gross margin for the quarter was 59%, down from 72% in the prior-year quarter, with software segment gross margin at 81% and services gross margin at 25% [7][8] - Total operating expenses as a percentage of revenues were 46%, compared to 48% a year ago, with income from operations reported at 2.7 million [9] Financial Guidance - For fiscal 2025, SLP expects revenues between 90millionand90 million and 93 million, indicating a 28-33% increase from fiscal 2024 revenues, with the Pro-ficiency acquisition expected to contribute an additional 15−15-18 million [12][13]