Simulations Plus(US:SLP)2021-10-26 01:14Financial Data and Key Metrics Changes - Total revenue growth for fiscal 2021 was 12%, exceeding guidance of 5% to 10% [7] - Software revenue growth for fiscal 2021 was 28%, surpassing guidance of 20% to 25% [7] - Service revenue declined by 6% for fiscal 2021, slightly better than guidance of 7% to 12% [7] - For Q4, total revenue growth was 3%, with software revenue growth at 14% and services revenue declining by 7% [26] Business Line Data and Key Metrics Changes - GastroPlus revenue grew by 20% in Q4, attributed to strong technology and upselling efforts [9] - ADMET Predictor revenue increased by 26% in Q4, benefiting from a product release in Q3 [10] - MonolixSuite revenue declined in Q4 due to early renewals in prior quarters, but full-year growth was 20% [12] - Services revenue breakdown for Q4: 53% from PK/PD services, 25% from QSP/QST services, 16% from PBPK services, and 6% from other services [33] Market Data and Key Metrics Changes - The backlog for services increased by 10% in Q4 and 49% for the full year, exceeding internal targets [15] - The PBPK business saw a 63% increase in backlog for the year [18] Company Strategy and Development Direction - The company aims to reinforce its leadership in the biosimulation market as the adoption of model-informed drug development tools expands [47] - The software business is expected to continue strong growth due to technology enhancements and product portfolio expansion [20] - The company plans to pursue M&A opportunities to expand its software portfolio and service offerings [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the services business and anticipates sequential revenue growth in fiscal 2022 [21] - The financial outlook for fiscal 2022 anticipates total revenue in the range of $51 million to $53 million, reflecting 10% to 15% year-over-year growth [22] - Management noted that the software business has shown resilience during the pandemic, while the services side remains cautious due to potential disruptions [60] Other Important Information - The company reported a net income of $9.8 million for the fiscal year, a 5% increase from the previous year [43] - The cash and short-term investments balance at the end of the fiscal year was $123.6 million, compared to $116 million at the end of the previous fiscal year [44] Q&A Session Summary Question: Insights on the bounce back in the services side of the business - Management noted that project delays and cancellations returned to more normal levels, indicating a positive trend [51] Question: Status of five customer renewals that slipped - All five renewals closed in the week after the end of the fiscal year [54] Question: Confidence in revenue guidance amidst pandemic uncertainties - Confidence stems from the high recurring revenue and renewal rates in the software business, while caution remains on the service side due to potential COVID impacts [59][60] Question: M&A activity and valuation discussions - Management indicated that discussions for acquisitions are more optimistic now compared to a year ago, with a focus on both software and service targets [76][67] Question: Clarification on SG&A expenses and future expectations - Management clarified that the increase in SG&A expenses in Q4 is expected to be an anomaly, with a return to previous levels anticipated [70][84]