Simulations Plus(US:SLP) ZACKS·2026-01-09 13:25Core Insights - Simulations Plus, Inc. (SLP) reported first-quarter fiscal 2026 adjusted earnings of 13 cents per share, missing the Zacks Consensus Estimate by 27.8% and down from 17 cents in the prior-year quarter [1][12] - Quarterly revenues decreased by 3% year over year to $18.4 million, with software revenue declining amid strong service momentum, although the top line exceeded the consensus mark by 2% [2][12] Revenue Breakdown - Software revenues, accounting for 48% of total revenues, fell 17% year over year to $8.9 million, primarily due to challenging market conditions and client consolidation [5][12] - Services revenues, which made up 52% of total revenues, increased by 16% to $9.5 million, driven by strong performance in the MedCom business [7][12] Client and Market Dynamics - SLP ended the quarter with 302 commercial clients, generating an average revenue of $97,000 per client and maintaining an 88% renewal rate [6] - Management expressed confidence in the remainder of fiscal 2026, citing strong bookings, annual software price increases, and improving funding conditions for biopharma clients [3][12] Financial Metrics - The gross margin for the quarter was 59%, up from 54% in the prior-year quarter, with software segment gross margin at 84% and services gross margin at 36% [8][9] - Adjusted EBITDA declined to $3.5 million from $4.5 million in the prior-year quarter, with an adjusted EBITDA margin of 19% compared to 24% previously [9][10] Guidance and Outlook - SLP reaffirmed its fiscal 2026 revenue guidance, expecting revenues between $79 million and $82 million, indicating a 0-4% increase from fiscal 2025 [14] - The company anticipates adjusted earnings per share to be between $1.03 and $1.10, with an adjusted EBITDA margin between 26% and 30% [14]