Simulations Plus Q1 Earnings Call Highlights

Core Insights - Simulations Plus reported a 3% decline in total revenue to $18.4 million for fiscal Q1 2026, aligning with previous guidance [2][3] - The company maintained its fiscal 2026 revenue guidance of $79–82 million, with expected growth of 0–4% [4][17] Revenue Breakdown - Software revenue contributions were primarily from development products (81%), discovery products (15%), and clinical operations products (4%) [1] - Services revenue grew by 16%, while software revenue fell by 17%, resulting in a mix shift where services accounted for 52% of total revenue [5][10] Profitability Metrics - Adjusted EBITDA for the quarter was $3.5 million, with adjusted EPS at $0.13 [1][5] - Total gross margin improved to 59%, with software gross margin at 84% and services gross margin at 36% [13][14] Client Metrics - The company ended the quarter with 302 commercial clients, an average revenue per client of $97,000, and an 88% renewal rate [8] - The trailing 12-month average revenue per client was $147,000, with a renewal rate of 87% [8] Services Growth - The backlog for services rose by 18% to $20.4 million, driven by strong performance in medical communications [9][11] - Medical communications, stemming from the Pro-ficiency acquisition, represented 100% of commercialization services revenue [11] Future Outlook - Management anticipates stronger software performance in the second and third quarters due to seasonal renewals [18] - The company is focusing on building an integrated product ecosystem that leverages AI and regulatory-grade modeling [19][20]