SLP Cuts FY25 Revenue Outlook, Begins Strategic Reorganization

Core Insights - Simulations Plus, Inc. (SLP) has announced preliminary revenue results for Q3 fiscal 2025, expecting revenues between $19 million and $20 million [1] - The full-year revenue guidance for fiscal 2025 has been revised to a range of $76 million to $80 million, down from the previous projection of $90 million to $93 million [2][8] Revenue and Financial Performance - The company anticipates third-quarter revenues to be between $19 million and $20 million [1] - Full-year fiscal 2025 revenues are now projected at $76 million to $80 million, a significant decrease from earlier estimates [2][8] Market Challenges - Management cited growing market uncertainties, including shifting drug pricing policies, potential tariff implications, and constrained funding, as headwinds affecting pharmaceutical and biotech clients [3] - These challenges have resulted in tighter budgets, project delays, and cancellations, particularly impacting the demand for services [3] Strategic Reorganization - In response to market challenges, Simulations Plus is transitioning to a functionally driven operating model from a business unit structure [4] - This strategic reorganization aims to enhance client engagement and improve sales and marketing effectiveness [4] - The change is part of a multi-year transformation strategy focused on streamlining operations and fostering collaboration [4] Future Outlook - The company believes the new structure will enhance operational efficiency and position it for long-term profitable growth [5] - Simulations Plus remains optimistic about the future of predictive analytics in biosimulation and clinical operations [5] Product Development - Recently, the company launched DILIsym 11, an advancement in its quantitative systems toxicology (QST) platform, aimed at improving drug safety and patient outcomes [6]