8-K
Simulations Plus, Inc. (SLP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
April 3, 2025
(Date of the earliest event reported)
Simulations Plus, Inc.
(Exact name of registrant as specified in its charter)
| California | 001-32046 | 95-4595609 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
800 Park Offices Drive, Suite 401, Research Triangle Park, NC 27709
(Address of principal executive offices) (Zip Code)
661-723-7723
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14z-12 under Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | SLP | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging Growth Company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition
On April 3, 2025, Simulations Plus, Inc., a California corporation (the “Company”), issued a press release announcing financial results for its second quarter ended February 28, 2025. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).
Item 7.01 Regulation FD Disclosure
On April 3, 2025, the Company held an investor conference call reporting its financial results for its second quarter ended February 28, 2025. The PowerPoint presentation, which was used for this investor conference call, is attached as Exhibit 99.2 to this Report.
In accordance with General Instructions B.2 of Form 8-K, the information in this Report, including Exhibits 99.1 and 99.2 (together, the “Exhibits”), is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Report.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This Report, including the disclosures set forth herein and in the Exhibits attached hereto, contains certain forward-looking statements that involve substantial risks and uncertainties. When used herein, the terms “anticipates,” “expects,” “estimates,” “believes” and similar expressions, as they relate to us or our management, are intended to identify such forward-looking statements.
Forward-looking statements in this Report or reports hereafter furnished, including in other publicly available documents filed with the Securities and Exchange Commission (the “Commission”), to the Company’s stockholders and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management’s best estimates based upon current conditions and the most recent results of operations. These risks include, but are not limited to, the risks set forth herein and in such other documents filed with the Commission, each of which could adversely affect our business and the accuracy of the forward-looking statements contained herein. Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press release issued on April 3, 2025. |
|---|---|
| 99.2 | PowerPoint presentation used at the Investor Conference Call on April 3, 2025. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SIMULATIONS PLUS, INC. | |
|---|---|
| Dated: April 3, 2025 | By: /s/ Will Frederick |
| Will Frederick | |
| Chief Financial Officer and Chief Operating Officer |
2
Document
Exhibit 99.1
Simulations Plus Reports Second Quarter Fiscal 2025 Financial Results
Total revenue grew 23% year-over-year driven by strong growth in both software and services
Maintains full-year revenue guidance of $90 to $93 million and adjusted diluted EPS of $1.07 to $1.20
RESEARCH TRIANGLE PARK, NC, April 3, 2025 – Simulations Plus, Inc. (Nasdaq: SLP) (“Simulations Plus”), a leading provider of cheminformatics, biosimulation, simulation-enabled performance and intelligence solutions, and medical communications to the biopharma industry, today reported financial results for its second quarter fiscal 2025, ended February 28, 2025.
Second Quarter 2025 Financial Highlights (as compared to second quarter 2024)
•Total revenue increased 23% to $22.4 million
•Software revenue increased 16% to $13.5 million, representing 60% of total revenue
•Services revenue increased 34% to $8.9 million, representing 40% of total revenue
•Gross profit was $13.1 million; gross margin was 59%
•Net income of $3.1 million and diluted EPS of $0.15 compared to net income of $4.0 million and diluted EPS of $0.20
•Adjusted EBITDA of $6.6 million, representing 29% of total revenue, compared to $7.1 million, representing 39% of total revenue
•Adjusted net income of $6.2 million and adjusted diluted EPS of $0.31, compared to adjusted net income of $6.4 million and adjusted diluted EPS of $0.32
Six Months 2025 Financial Highlights (as compared to six months 2024)
•Total revenue increased 26% to $41.4 million
•Software revenue increased 26% to $24.2 million, representing 59% of total revenue
•Services revenue increased 26% to $17.2 million, representing 41% of total revenue
•Gross profit was $23.3 million; gross margin was 56%
•Net income of $3.3 million and diluted EPS of $0.16 versus net income of $6.0 million and diluted EPS of $0.29
•Adjusted EBITDA of $11.1 million, representing 27% of total revenue, compared to $10.5 million, representing 32% of total revenue
•Adjusted net income of $9.6 million and adjusted diluted EPS of $0.48, compared to adjusted net income of $10.1 million and adjusted diluted EPS of $0.50
Management Commentary
“We delivered strong performance in our second fiscal quarter 2025 with total revenue growing by 23%,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Our software revenue rose 16%, driven by outstanding execution across all of our software platforms. Leading growth this quarter, our Quantitative Systems Pharmacology (QSP) business unit expanded 89%, primarily driven by the addition of a model license in the disease area of atopic dermatitis. Additionally, our Cheminformatics revenues increased by 8%, while our Clinical Pharmacology & Pharmacometrics (CPP) business unit posted a 9% revenue increase.
“Services revenue for the second fiscal quarter grew 34%, with notable strength in our Medical Communications (MC) business unit. Services bookings in our CPP and MC business units were exceptional contributors to the 13% year-over-year increase in our backlog, which ended the quarter at $20.4 million.
“We are pleased with our solid performance in the first half of the year despite the ongoing cost constrained and limited funding environment for our biopharma customers. As we enter the second half of 2025, we believe we are well-positioned to maintain our momentum and are on track to achieve our stated guidance.”
Fiscal 2025 Guidance
| Fiscal 2025 Guidance | |
|---|---|
| Revenue | $90M - $93M |
| Revenue growth | 28 - 33% |
| Software mix | 55 - 60% |
| Adjusted EBITDA margin | 31 - 33% |
| Adjusted diluted EPS | $1.07 - $1.20 |
Webcast and Conference Call Details
Shawn O’Connor, Chief Executive Officer, and Will Frederick, Chief Financial and Operating Officer, will host a conference call and webcast today at 5:00 p.m. Eastern Time to discuss the details of Simulations Plus’ performance for the quarter and certain forward-looking information. The call may be accessed by registering here or by calling 1-877-451-6152 (domestic) or 1-201-389-0879 (international) or by clicking on this Call me™ link to request a return call. The webcast can be accessed on the investor relations page of the Simulations Plus website https://www.simulations-plus.com/investorscorporate-profile/corporate-profile/ where it will also be available for replay approximately one hour following the call.
Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures,” which are measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
A further explanation and reconciliation of these non-GAAP financial measures is included below and in the financial tables in this release.
The Company believes that the non-GAAP financial measures presented facilitate an understanding of operating performance and provide a meaningful comparison of its results between periods. The Company’s management uses non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of performance-based compensation. Adjusted EBITDA and Adjusted Diluted EPS represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that these measures are useful in evaluating our core operating results. However, Adjusted EBITDA and Adjusted Diluted EPS are not measures of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income, operating income, or diluted EPS as indicators of our operating performance or to net cash provided by operating activities as a measure of our liquidity. We believe the Company’s Adjusted EBITDA and Adjusted Diluted EPS measures provide information that is directly comparable to that provided by other peer companies in our industry, but other companies may calculate non-GAAP financial results differently, particularly related to nonrecurring, unusual items.
Please note that the Company has not reconciled the adjusted EBITDA or adjusted diluted earnings per share forward-looking guidance included in this press release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to costs related to acquisitions, financings, and employee stock compensation programs, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
Adjusted EBITDA
Adjusted EBITDA represents net income excluding the effect of interest expense (income), provision (benefit) for income taxes, amortization expense, intangible asset amortization, equity-based compensation expense, loss (gain) on currency exchange, goodwill impairment, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense and other items not indicative of our ongoing operating performance.
Adjusted Net Income and Adjusted Diluted EPS
Adjusted net income and adjusted diluted earnings per share exclude the effect of amortization expense, equity-based compensation expense, loss (gain) on currency exchange, goodwill impairment, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense and other items not indicative of our ongoing operating performance as well as the income tax provision adjustment for such charges.
The Company excludes the above items because they are outside of the Company’s normal operations and/or, in certain cases, are difficult to forecast accurately for future.
With more than 25 years of experience serving clients globally, Simulations Plus stands as a premier provider in the biopharma sector, offering advanced software and consulting services that enhance drug discovery, development, research, clinical trial operations, regulatory submissions, and commercialization. Our comprehensive biosimulation solutions integrate artificial intelligence/machine learning (AI/ML), physiologically based pharmacokinetics, physiologically based biopharmaceutics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. We also deliver simulation-enabled performance and intelligence solutions alongside medical communications support for clinical and commercial drug development. Our cutting-edge technology is licensed and utilized by leading pharmaceutical, biotechnology, and regulatory agencies worldwide. For more information, visit our website at www.simulations-plus.com. Follow us on LinkedIn | X | YouTube.
Environmental, Social, and Governance
We focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our website to read our 2024 ESG update.
Forward-Looking Statements
Except for historical information, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties. Words like “believe,” “will”, “can”, “expect,” “anticipate” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Forward looking statements contained in this press release include, but are not limited to, statements about expectations for the second half of 2025 and anticipated projections for fiscal year 2025. Factors that could cause or contribute to such differences include, but are not limited to: our ability to integrate our Adaptive Learning & Insights (ALI) and Medical Communications (MC) business units, our ability to meet our stated guidance, our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, general economic, political or geopolitical conditions and changes, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, market conditions, macroeconomic factors, and a sustainable market. Further information on our risk factors is contained in our quarterly, annual and current reports and filed with the U.S. Securities and Exchange Commission.
Investor Relations Contact:
Lisa Fortuna
Financial Profiles
310-622-8251
slp@finprofiles.com
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands, except per common share amounts) | February 28, 2025 | February 29, 2024 | February 28, 2025 | February 29, 2024 | ||||
| Revenues | ||||||||
| Software | $ | 13,484 | $ | 11,614 | $ | 24,199 | $ | 19,203 |
| Services | 8,948 | 6,691 | 17,157 | 13,602 | ||||
| Total revenues | 22,432 | 18,305 | 41,356 | 32,805 | ||||
| Cost of revenues | ||||||||
| Software | 2,587 | 1,348 | 5,225 | 2,339 | ||||
| Services | 6,718 | 3,736 | 12,786 | 7,397 | ||||
| Total cost of revenues | 9,305 | 5,084 | 18,011 | 9,736 | ||||
| Gross profit | 13,127 | 13,221 | 23,345 | 23,069 | ||||
| Operating expenses | ||||||||
| Research and development | 2,143 | 1,312 | 3,991 | 2,529 | ||||
| Sales and marketing | 3,717 | 1,949 | 6,568 | 3,938 | ||||
| General and administrative | 4,555 | 5,518 | 9,948 | 11,200 | ||||
| Total operating expenses | 10,415 | 8,779 | 20,507 | 17,667 | ||||
| Income from operations | 2,712 | 4,442 | 2,838 | 5,402 | ||||
| Other income | 796 | 810 | 940 | 2,256 | ||||
| Income before income taxes | 3,508 | 5,252 | 3,778 | 7,658 | ||||
| Provision for income taxes | (434) | (1,223) | (498) | (1,684) | ||||
| Net income | $ | 3,074 | $ | 4,029 | $ | 3,280 | $ | 5,974 |
| Earnings per share | ||||||||
| Basic | $ | 0.15 | $ | 0.20 | $ | 0.16 | $ | 0.30 |
| Diluted | $ | 0.15 | $ | 0.20 | $ | 0.16 | $ | 0.29 |
| Weighted-average common shares outstanding | ||||||||
| Basic | 20,097 | 19,975 | 20,082 | 19,961 | ||||
| Diluted | 20,277 | 20,315 | 20,262 | 20,288 | ||||
| Other comprehensive (loss) income, net of tax | ||||||||
| Foreign currency translation adjustments | (26) | (15) | (68) | (69) | ||||
| Unrealized gains on available-for-sale securities | $ | — | $ | — | $ | 4 | $ | — |
| Comprehensive income | $ | 3,048 | $ | 4,014 | $ | 3,216 | $ | 5,905 |
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| (Unaudited) | (Audited) | |||
|---|---|---|---|---|
| (in thousands, except share and per share amounts) | February 28, 2025 | August 31, 2024 | ||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 10,992 | $ | 10,311 |
| Accounts receivable, net of allowance for credit losses of $179 and $149 | 16,493 | 9,136 | ||
| Prepaid income taxes | 1,375 | 2,197 | ||
| Prepaid expenses and other current assets | 7,464 | 7,753 | ||
| Short-term investments | 10,393 | 9,944 | ||
| Total current assets | 46,717 | 39,341 | ||
| Long-term assets | ||||
| Capitalized computer software development costs, net of accumulated amortization of $20,290 and $18,727 | 12,452 | 12,499 | ||
| Property and equipment, net | 800 | 812 | ||
| Operating lease right-of-use assets | 827 | 1,027 | ||
| Intellectual property, net of accumulated amortization of $7,659 and $5,490 | 20,961 | 23,130 | ||
| Other intangible assets, net of accumulated amortization of $3,819 and $3,177 | 22,910 | 23,210 | ||
| Goodwill | 96,305 | 96,078 | ||
| Other assets | 455 | 542 | ||
| Total assets | $ | 201,427 | $ | 196,639 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities | ||||
| Accounts payable | $ | 1,206 | $ | 602 |
| Accrued compensation | 4,431 | 4,513 | ||
| Accrued expenses | 1,399 | 2,043 | ||
| Contracts payable - current portion | — | 2,440 | ||
| Operating lease liability - current portion | 313 | 475 | ||
| Deferred revenue | 3,346 | 1,996 | ||
| Total current liabilities | 10,695 | 12,069 | ||
| Long-term liabilities | ||||
| Deferred income taxes, net | 701 | 1,608 | ||
| Operating lease liability - net of current portion | 483 | 531 | ||
| Total liabilities | 11,879 | 14,208 | ||
| Commitments and contingencies - note 4 | — | — | ||
| Shareholders' equity | ||||
| Preferred stock, $0.001 par value - 10,000,000 shares authorized; no shares issued and outstanding | $ | — | $ | — |
| Common stock, $0.001 par value and additional paid-in capital —50,000,000 shares authorized; 20,111,045 and 20,051,134 shares issued and outstanding | 156,229 | 152,328 | ||
| Retained earnings | 33,634 | 30,354 | ||
| Accumulated other comprehensive loss | (315) | (251) | ||
| Total shareholders' equity | 189,548 | 182,431 | ||
| Total liabilities and shareholders' equity | $ | 201,427 | $ | 196,639 |
SIMULATIONS PLUS, INC.
Trended Financial Information (1)
(Unaudited)
(in millions except earnings per share amounts)
| FY24 | FY25 | FY24 | FY25 | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Full Year | YTD | |||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||
| Software | $ | 7.589 | $ | 11.614 | $ | 11.908 | $ | 9.913 | $ | 10.715 | $ | 13.484 | $ | 41.024 | $ | 24.199 | ||||||||||||||||||||
| Services | $ | 6.911 | $ | 6.691 | $ | 6.636 | $ | 8.751 | $ | 8.209 | $ | 8.948 | $ | 28.989 | $ | 17.157 | ||||||||||||||||||||
| Total | $ | 14.500 | $ | 18.305 | $ | 18.544 | $ | 18.664 | $ | 18.924 | $ | 22.432 | $ | 70.013 | $ | 41.356 | ||||||||||||||||||||
| Gross Margin | ||||||||||||||||||||||||||||||||||||
| Software | 86.9 | % | 88.4 | % | 88.2 | % | 72.4 | % | 75.4 | % | 80.8 | % | 84.2 | % | 78.4 | % | ||||||||||||||||||||
| Services | 47.0 | % | 44.2 | % | 41.4 | % | -4.0 | % | 26.1 | % | 24.9 | % | 29.7 | % | 25.5 | % | ||||||||||||||||||||
| Total | 67.9 | % | 72.2 | % | 71.5 | % | 36.6 | % | 54.0 | % | 58.5 | % | 61.6 | % | 56.4 | % | ||||||||||||||||||||
| Income from operations | $ | 0.960 | $ | 4.442 | $ | 1.880 | $ | (1.151) | $ | 0.126 | $ | 2.712 | $ | 6.131 | $ | 2.838 | ||||||||||||||||||||
| Operating Margin | 6.6 | % | 24.3 | % | 10.1 | % | -6.2 | % | 0.7 | % | 12.1 | % | 8.8 | % | 6.9 | % | ||||||||||||||||||||
| Net Income | $ | 1.945 | $ | 4.029 | $ | 3.137 | $ | 0.843 | $ | 0.206 | $ | 3.074 | $ | 9.954 | $ | 3.280 | ||||||||||||||||||||
| Diluted Earnings Per Share | $ | 0.10 | $ | 0.20 | $ | 0.15 | $ | 0.04 | $ | 0.01 | $ | 0.15 | $ | 0.49 | $ | 0.16 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 3.388 | $ | 7.135 | $ | 5.586 | $ | 4.148 | $ | 4.493 | $ | 6.578 | $ | 20.257 | $ | 11.071 | ||||||||||||||||||||
| Adjusted Diluted EPS | $ | 0.18 | $ | 0.32 | $ | 0.27 | $ | 0.18 | $ | 0.17 | $ | 0.31 | $ | 0.95 | $ | 0.48 | ||||||||||||||||||||
| Cash Flow from Operations | $ | 0.162 | $ | 5.810 | $ | 5.700 | $ | 1.600 | $ | (1.274) | $ | 5.669 | $ | 13.320 | $ | 4.395 | ||||||||||||||||||||
| Revenue Breakdown by Region | ||||||||||||||||||||||||||||||||||||
| Americas | $ | 10.891 | $ | 12.461 | $ | 12.428 | $ | 14.693 | $ | 14.469 | $ | 16.112 | $ | 50.473 | $ | 30.581 | ||||||||||||||||||||
| EMEA | 2.302 | 4.665 | 4.513 | 2.592 | 2.720 | 4.806 | 14.072 | 7.526 | ||||||||||||||||||||||||||||
| Asia Pacific | 1.307 | 1.179 | 1.603 | 1.379 | 1.735 | 1.514 | 5.468 | 3.249 | ||||||||||||||||||||||||||||
| Total | $ | 14.500 | $ | 18.305 | $ | 18.544 | $ | 18.664 | $ | 18.924 | $ | 22.432 | $ | 70.013 | $ | 41.356 | ||||||||||||||||||||
| Software Performance Metrics | ||||||||||||||||||||||||||||||||||||
| Avg. Revenue per Customer (in thousands) | ||||||||||||||||||||||||||||||||||||
| Commercial | $ | 79.0 | $ | 113.0 | $ | 97.0 | $ | 89.0 | $ | 94.0 | $ | 124.0 | ||||||||||||||||||||||||
| Services Performance Metrics | ||||||||||||||||||||||||||||||||||||
| Backlog (in millions) | $ | 18.910 | $ | 18.041 | $ | 19.602 | $ | 14.091 | $ | 17.254 | $ | 20.379 |
(1) Numbers may not foot due to rounding
SIMULATIONS PLUS, INC.
Reconciliation of Adjusted EBITDA to Net Income (1)
(Unaudited)
(in millions)
| FY 2024 | FY25 | FY24 | FY25 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Full Year | YTD | |||||||||||||
| Net Income | $ | 1.945 | $ | 4.029 | $ | 3.137 | $ | 0.843 | $ | 0.206 | $ | 3.074 | $ | 9.954 | $ | 3.280 | ||||
| Excluding: | ||||||||||||||||||||
| Interest income and expense, net | (1.292) | (1.348) | (1.522) | (0.213) | (0.159) | (0.154) | (4.375) | (0.313) | ||||||||||||
| Provision for income taxes | 0.461 | 1.223 | 0.753 | 0.020 | 0.064 | 0.434 | 2.457 | 0.498 | ||||||||||||
| Depreciation and amortization | 1.091 | 1.105 | 1.263 | 2.206 | 2.265 | 2.274 | 5.665 | 4.539 | ||||||||||||
| Stock-based compensation | 1.303 | 1.585 | 1.665 | 1.387 | 1.589 | 1.557 | 5.940 | 3.146 | ||||||||||||
| (Gain) loss on currency exchange | (0.044) | 0.098 | (0.009) | (0.431) | 0.015 | (0.002) | (0.386) | 0.013 | ||||||||||||
| Change in value of contingent consideration | (0.110) | 0.440 | (0.599) | (1.370) | — | (0.640) | (1.639) | (0.640) | ||||||||||||
| Reorganization expense | — | — | — | — | 0.258 | 0.157 | — | 0.415 | ||||||||||||
| Mergers & Acquisitions expense | 0.034 | 0.003 | 0.898 | 1.706 | 0.255 | (0.122) | 2.641 | 0.133 | ||||||||||||
| Adjusted EBITDA | $ | 3.388 | $ | 7.135 | $ | 5.586 | $ | 4.148 | $ | 4.493 | $ | 6.578 | $ | 20.257 | $ | 11.071 |
(1) Numbers may not foot due to rounding
SIMULATIONS PLUS, INC.
Reconciliation of Adjusted Diluted EPS to Diluted EPS (1)
(Unaudited)
(in millions, except Diluted EPS and Adjusted Diluted EPS)
| FY 2024 | FY25 | FY24 | FY25 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Full Year | YTD | |||||||||||
| Net Income (GAAP) | $ | 1.945 | $ | 4.029 | $ | 3.137 | $ | 0.843 | $ | 0.206 | $ | 3.074 | $ | 9.954 | $ | 3.280 | ||
| Excluding: | ||||||||||||||||||
| Amortization | 0.991 | 0.991 | 1.122 | 2.059 | 2.130 | 2.130 | 5.163 | 4.260 | ||||||||||
| Stock-based compensation | 1.303 | 1.585 | 1.665 | 1.387 | 1.589 | 1.557 | 5.940 | 3.146 | ||||||||||
| (Gain) loss on currency exchange | (0.044) | 0.098 | (0.009) | (0.431) | 0.015 | (0.002) | (0.386) | 0.013 | ||||||||||
| Mergers & Acquisitions expense | 0.034 | 0.003 | 0.898 | 1.706 | 0.255 | (0.122) | 2.641 | 0.133 | ||||||||||
| Change in value of contingent consideration | (0.110) | 0.440 | (0.599) | (1.370) | — | (0.640) | (1.639) | (0.640) | ||||||||||
| Reorganization expense | — | — | — | — | 0.258 | 0.157 | — | 0.415 | ||||||||||
| Tax effect on above adjustments | (0.417) | (0.746) | (0.603) | (0.554) | (1.007) | 0.041 | (2.320) | (0.966) | ||||||||||
| Adjusted Net income (Non-GAAP) | $ | 3.702 | $ | 6.400 | $ | 5.611 | $ | 3.640 | $ | 3.446 | $ | 6.195 | $ | 19.353 | $ | 9.641 | ||
| Weighted-avg. common shares outstanding: | ||||||||||||||||||
| Diluted | 20.279 | 20.315 | 20.433 | 20.338 | 20.266 | 20.277 | 20.301 | 20.262 | ||||||||||
| Diluted EPS (GAAP) | $ | 0.10 | $ | 0.20 | $ | 0.15 | $ | 0.04 | $ | 0.01 | $ | 0.15 | $ | 0.49 | $ | 0.16 | ||
| Adjusted Diluted EPS (Non-GAAP) | $ | 0.18 | $ | 0.32 | $ | 0.27 | $ | 0.18 | $ | 0.17 | $ | 0.31 | $ | 0.95 | $ | 0.48 |
(1) Numbers may not foot due to rounding
6
slpearningscalldeck252-f
1 Earnings Call – Q2 - FY25 April 3, 2025
Except for historical information, the matters discussed in this presentation are forward-looking statements that involve risks and uncertainties. Words like “believe,” “will”, “can”, “expect,” “anticipate” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Forward looking statements contained in this press release include, but are not limited to, statements about expectations for the second half of 2025 and anticipated projections for fiscal year 2025. Factors that could cause or contribute to such differences include, but are not limited to: our ability to integrate our Adaptive Learning & Insights (ALI) and Medical Communications (MC) business units, our ability to meet our stated guidance, our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, general economic, political or geopolitical conditions and changes, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, market conditions, macroeconomic factors, and a sustainable market. Further information on our risk factors is contained in our quarterly, annual and current reports and filed with the U.S. Securities and Exchange Commission. Non-GAAP Financial Measures This press release includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) such as Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS and certain ratios and other metrics derived there from. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. We believe (i) these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends; and (ii) that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing financial measures with other similar companies, many of which present similar non- GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are set forth in the appendix to this presentation. Safe Harbor Statement 2
Second Quarter Highlights $0.15 Diluted EPS $22.4M Revenue 29% Adj. EBITDA Margin +23% Revenue Growth 3 CURRENT PERIOD Prior Year Comparison (2Q24) $18.3M Revenue $0.20 Diluted EPS 39% Adj. EBITDA Margin +16% Revenue Growth $0.31 Adj. Diluted EPS $0.32 Adj. Diluted EPS
Trailing Twelve Months (TTM) 2Q25 Highlights $0.36 Diluted EPS $78.6M Revenue 26% Adj. EBITDA Margin +21% Revenue Growth 4 CURRENT PERIOD Prior Year Comparison (2Q24) $64.7M Revenue $0.52 Diluted EPS 34% Adj. EBITDA Margin +19% Revenue Growth $0.93 Adj. Diluted EPS $1.09 Adj. Diluted EPS
– Overall software revenue growth of 16% for 2Q25 and 18% for TTM – Good renewal rate, upsell and new logo activity – Revenue contribution from ALI and MC in-line with expectations Software Highlights +8% Q2 Revenue Growth General +1% Q2 Revenue Growth +9% Q2 Revenue Growth +89% Q2 Revenue Growth $0.9M Q2 Revenue $0.1M Q2 Revenue +9% TTM Revenue Growth +2% TTM Revenue Growth +19% TTM Revenue Growth +13% TTM Revenue Growth $3.7M TTM Revenue (1) $0.2M TTM Revenue (1) 5 Cheminformatics (CHEM) Physiologically Based Pharmacokinetics (PBPK) Clinical Pharmacology & Pharmacometrics (CPP) Quantitative Systems Pharmacology (QSP) Adaptive Learning & Insights (ALI) Medical Communications (MC) (1) The TTM revenue for the ALI and MC business units only includes revenue since the acquisition of Pro-ficiency in June 2024.
– Overall services revenue growth of 34% for 2Q25 and 28% for TTM – Total backlog $20.4M, over 94% expected to be converted to revenue within 12 months – Revenue contribution from MC in-line with expectations Services Highlights General -23% Q2 Revenue Decline +19% Q2 Revenue Growth -7% Q2 Revenue Decline $2.3M Q2 Revenue TTM Revenue Decline TTM Revenue Growth TTM Revenue Growth TTM Revenue (1) 6 -14% +16% +12% $5.3M Physiologically Based Pharmacokinetics (PBPK) Clinical Pharmacology & Pharmacometrics (CPP) Quantitative Systems Pharmacology (QSP) Clinical Pharm cology & Pharmacometrics Physiologically Based Pharmacokinetics (PBPK) Clinical Pharmacology & Pharmacometrics (CPP) Quantitative Systems Pharmacology (QSP) Medical Communications (MC) (1) The TTM revenue for the MC business unit only includes revenue since the acquisition of Pro-ficiency in June 2024.
Financial Results
60% 40% Software Services 63% 37% Software Services Revenue - Q2 (in millions) Software Revenue Growth Total Revenue Growth Services Revenue Growth +23% +16% +34% 2Q25 Mix 2Q24 Mix 8 $10.5 $11.6 $13.5 $5.3 $6.7 $8.9$15.8 $18.3 $22.4 Software Services 2Q23 2Q24 2Q25
59% 41% Software Services 59% 41% Software Services Revenue - YTD (in millions) Software Revenue Growth Total Revenue Growth Services Revenue Growth +26% +26% +26% FY25 Mix FY24 Mix 9 $16.6 $19.2 $24.2 $11.2 $13.6 $17.2 $27.7 $32.8 $41.4 Software Services FY23 FY24 FY25
59% 41% Software Services 61% 39% Software Services Revenue - Trailing Twelve Months (TTM) (in millions) Software Revenue Growth Total Revenue Growth Services Revenue Growth +21% +18% +28% 2Q25 Mix 2Q24 Mix 10 $32.1 $39.2 $46.0 $22.3 $25.5 $32.5$54.4 $64.7 $78.6 Software Services 2Q23 2Q24 2Q25
46% 23% 17% 7% 7% GastroPlus® MonolixSuite™ ADMET Predictor® Pro-ficiency™ Others Software Solutions as % of Software Revenue 11 2Q25 48% 20% 17% 7% 8% GastroPlus® MonolixSuite™ ADMET Predictor® Pro-ficiency™ Others TTM GastroPlus® ▪ 7 new customers ▪ 7 upsells to existing customers ADMET Predictor® ▪ 10 new customers ▪ 7 upsells to existing customers MonolixSuite™ ▪ 11 new customers ▪ 2 upsells to existing customers Second Quarter Highlights QSP ▪ Added model license for Atopic Dermatitis
Avg. Revenue per Customer (in thousands) Software Performance Metrics - Q2 Commercial Customers Renewal Rates 12 $110 $113 $124 2Q23 2Q24 2Q25 80% 85% 84% 94% 94% 90% Accounts Fees 2Q23 2Q24 2Q25
Avg. Revenue per Customer (in thousands) Software Performance Metrics - TTM Commercial Customers Renewal Rates 13 $85 $95 $101 FY23 FY24 FY25 83% 84% 83% 92% 93% 91% Accounts Fees FY23 FY24 FY25
17% 19% 39% 25% PBPK QSP CPP MC Services Solutions as % of Services Revenue 14 2Q25 18% 26% 40% 16% PBPK QSP CPP MC TTM
$15.4 $18.0 $20.4 2Q23 2Q24 2Q25 100 75 69 20 24 27 63 77 52 55 183 176 203 PBPK QSP CPP MC 2Q23 2Q24 2Q25 Services Performance Metrics Total Projects Backlog (in millions) 15
Income Statement Summary - Q2 FY25 (1) 16 (in millions, except Diluted EPS and Adjusted Diluted EPS) 2Q25 % of Rev 2Q24 % of Rev Revenue $22.4 100% $18.3 100% Cost of revenue 9.3 41% 5.1 28% Gross profit 13.1 59% 13.2 72% R&D 2.1 10% 1.3 7% S&M 3.7 17% 1.9 11% G&A 4.6 20% 5.5 30% Total operating exp 10.4 46% 8.8 48% Income from operations 2.7 12% 4.4 24% Income before income taxes 3.5 16% 5.3 29% Income taxes (0.4) 2% (1.2) 7% Effective tax rate 12% 23% Net income $3.1 14% $4.0 22% Diluted EPS $0.15 $0.20 Adjusted EBITDA $6.6 29% $7.1 39% Excluded items $3.1 $2.4 Adjusted Diluted EPS $0.31 $0.32 (1) Numbers may not add due to rounding
Income Statement Summary - YTD 17 FY25 % of Rev FY24 % of Rev Revenue $41.4 100% $32.8 100% Revenue growth 26% 18% Gross profit 23.3 56% 23.1 70% R&D 4.0 10% 2.5 8% S&M 6.6 16% 3.9 12% G&A 9.9 24% 11.2 34% Total operating exp 20.5 50% 17.7 54% Income from operations 2.8 7% 5.4 16% Income before income taxes 3.8 9% 7.7 23% Income taxes (0.5) 1% (1.7) 5% Effective tax rate 13% 22% Net income $3.3 8% $6.0 18% Diluted EPS $0.16 $0.29 Adjusted EBITDA $11.1 27% $10.5 32% Excluded items $6.4 $4.1 Adjusted Diluted EPS $0.48 $0.50 (in millions, except Diluted EPS and Adjusted Diluted EPS) (1) Numbers may not add due to rounding
Balance Sheet Summary 18 February 28, 2025 August 31, 2024 Cash and short-term investments $21.4 $20.3 Total current assets 46.7 39.3 Total assets $201.4 $196.6 Current liabilities 10.7 12.1 Long-term liabilities 1.2 2.1 Total liabilities 11.9 14.2 Shareholders’ equity 189.5 182.4 Total liabilities and shareholders’ equity $201.4 $196.6 (in millions)
Fiscal 2025 Guidance 19 Guidance Total Revenue $90M - $93M Total Revenue Growth 28% - 33% Software Revenue Mix 55% - 60% Adjusted EBITDA(1) Margin 31% - 33% Adjusted Diluted EPS(2) $1.07 - $1.20 (1) Adjusted EBITDA represents net income excluding the effect of interest expense (income), provision (benefit) for income taxes, amortization expense, intangible asset amortization, equity-based compensation expense, loss (gain) on currency exchange, goodwill impairment, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense and other items not indicative of our ongoing operating performance. (2) Adjusted net income and adjusted diluted earnings per share exclude the effect of amortization expense, equity-based compensation expense, loss (gain) on currency exchange, goodwill impairment, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense and other items not indicative of our ongoing operating performance as well as the income tax provision adjustment for such charges.
WELL POSITIONED FOR FISCAL 2025 PERFORMANCE Delivering on our commitment to scientific leadership Expanding our software and services portfolio 20 • Release of GastroPlus X • Release of Monolix R24 • Release of ADMET Predictor Version 12 • Collaboration with USC to secure NIH Grant to develop new AI drug discovery offerings Developing organization to drive growth Creating shareholder value CONTINUED LEADERSHIP POSITION IN LIFE SCIENCES TECHNOLOGY MARKET Conclusion • Optimization of business unit structure following recent strategic acquisitions • Formation of two new business units following Pro-ficiency acquisition • Focus on supporting accelerated growth in distributor network • ALI: Pro-ficiency software platform • MC: Panorama KOL Insights software platform • Delivering consistent revenue growth and profitability • Strategic M&A
Adjusted EBITDA Non-GAAP Reconciliation (1) 21 FY24 FY25 FY24 FY25 Q1 Q2 Q3 Q4 Q1 Q2 Full Year YTD Net Income $1.945 $4.029 $3.137 $0.843 $0.206 $3.074 $9.954 $3.280 Excluding: Interest income and expense, net (1.292) (1.348) (1.522) (0.213) (0.159) (0.154) (4.375) (0.313) Provision for income taxes 0.461 1.223 0.753 0.020 0.064 0.434 2.457 0.498 Depreciation and amortization 1.091 1.105 1.263 2.206 2.265 2.274 5.665 4.539 Stock-based compensation 1.303 1.585 1.665 1.387 1.589 1.557 5.940 3.146 (Gain) loss on currency exchange (0.044) 0.098 (0.009) (0.431) 0.015 (0.002) (0.386) 0.013 Change in value of contingent consideration (0.110) 0.440 (0.599) (1.370) — (0.640) (1.639) (0.640) Reorganization expense — — — — 0.258 0.157 — 0.415 Mergers & Acquisitions expense 0.034 0.003 0.898 1.706 0.255 (0.122) 2.641 0.133 Adjusted EBITDA $3.388 $7.135 $5.586 $4.148 $4.493 $6.578 $20.257 $11.071 (in millions) (1) Numbers may not add due to rounding
Adjusted Diluted EPS Non-GAAP Reconciliation (1) 22 FY24 FY25 FY24 FY25 Q1 Q2 Q3 Q4 Q1 Q2 Full Year YTD Net Income (GAAP) $1.945 $4.029 $3.137 $0.843 $0.206 $3.074 $9.954 $3.280 Excluding: Amortization 0.991 0.991 1.122 2.059 2.130 2.130 5.163 4.260 Stock-based compensation 1.303 1.585 1.665 1.387 1.589 1.557 5.940 3.146 (Gain) loss on currency exchange (0.044) 0.098 (0.009) (0.431) 0.015 (0.002) (0.386) 0.013 Mergers & Acquisitions expense 0.034 0.003 0.898 1.706 0.255 (0.122) 2.641 0.133 Change in value of contingent consideration (0.110) 0.440 (0.599) (1.370) — (0.640) (1.639) (0.640) Reorganization expense — — — — 0.258 0.157 — 0.415 Tax effect on above adjustments (0.417) (0.746) (0.603) (0.554) (1.007) 0.041 (2.320) (0.966) Adjusted Net income (Non-GAAP) $3.702 $6.400 $5.611 $3.640 $3.446 $6.195 $19.353 $9.641 Weighted-avg. common shares outstanding: Diluted 20.279 20.315 20.433 20.338 20.266 20.277 20.301 20.262 Diluted EPS (GAAP) $0.10 $0.20 $0.15 $0.04 $0.01 $0.15 $0.49 $0.16 Adjusted Diluted EPS (Non-GAAP) $0.18 $0.32 $0.27 $0.18 $0.17 $0.31 $0.95 $0.48 (in millions, except Diluted EPS and Adjusted Diluted EPS) (1) Numbers may not add due to rounding
Investor Relations Contact: Lisa Fortuna Financial Profiles 310-622-8251 slp@finprofiles.com