Simulations Plus, Inc 10-Q for FY2025 Q1

Simulations Plus, Inc. (SLP)

10-Q 2025-01-08 For: 2024-11-30

Added on April 06, 2026

About this 10-Q

Simulations Plus, Inc filed this 10-Q on January 8, 2025, covering the quarter ended November 30, 2024 (FY2025 Q1).

Headline figures

Quarter ended November 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $18.92M; up 30.5% from $14.5M a year earlier
Net income: $206K; down 89.4% from net income of $1.95M a year earlier
Diluted EPS: $0.01; down 90.0% from $0.10 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


California			95-4595609
(State or other jurisdiction of Incorporation or Organization)			(I.R.S. Employer identification No.)


x	Large accelerated Filer	o	Accelerated Filer
o	Non-accelerated Filer	o	Smaller reporting company
o	Emerging Growth Company


	PART I. FINANCIAL INFORMATION
		Page
Item 1.	Condensed Consolidated Financial Statements

	Condensed Consolidated Balance Sheets at November 30, 2024 and August 31, 2024	3

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended November 30, 2024 and 2023	4

	Condensed Consolidated Statements of Shareholders’ Equity for the three months ended November 30, 2024 and 2023	5

	Condensed Consolidated Statements of Cash Flows for the three months ended November 30, 2024 and 2023	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30

Item 4.	Controls and Procedures	31

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	33

Item 6.	Exhibits	34

	Signatures	35


	(Unaudited)		(Audited)
(in thousands, except share and per share amounts)	November 30, 2024		August 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	6,187	$	10,311
Accounts receivable, net of allowance for credit losses of $145 and $149	12,804		9,136
Prepaid income taxes	2,327		2,197
Prepaid expenses and other current assets	7,098		7,753
Short-term investments	11,983		9,944
Total current assets	40,399		39,341
Long-term assets
Capitalized computer software development costs, net of accumulated amortization of $19,500 and $18,727	12,441		12,499
Property and equipment, net	819		812
Operating lease right-of-use assets	1,342		1,027
Intellectual property, net of accumulated amortization of $6,575 and $5,490	22,045		23,130
Other intangible assets, net of accumulated amortization of $3,497 and $3,177	23,076		23,210
Goodwill	96,305		96,078


Other assets	489		542
Total assets	$	196,916	$	196,639

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	1,120	$	602
Accrued compensation	1,882		4,513
Accrued expenses	580		2,043

Contracts payable - current portion	2,440		2,440
Operating lease liability - current portion	485		475
Deferred revenue	3,231		1,996
Total current liabilities	9,738		12,069
Long-term liabilities
Deferred income taxes, net	1,648		1,608
Operating lease liability - net of current portion	835		531

Total liabilities	12,221		14,208
Commitments and contingencies	—		—
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; 20,085,014 and 20,051,134 shares issued and outstanding	154,424		152,328
Retained earnings	30,560		30,354
Accumulated other comprehensive loss	(289)		(251)
Total shareholders' equity	184,695		182,431
Total liabilities and shareholders' equity	$	196,916	$	196,639


	Three Months Ended

(in thousands, except per common share amounts)	November 30, 2024		November 30, 2023
Revenues
Software	$	10,715	$	7,589
Services	8,209		6,911
Total revenues	18,924		14,500
Cost of revenues
Software	2,638		991
Services	6,068		3,661
Total cost of revenues	8,706		4,652
Gross profit	10,218		9,848
Operating expenses
Research and development	1,848		1,217
Sales and marketing	2,851		1,989
General and administrative	5,393		5,682
Total operating expenses	10,092		8,888

Income from operations	126		960

Other income	144		1,446

Income before income taxes	270		2,406
Provision for income taxes	(64)		(461)
Net income	$	206	$	1,945

Earnings per share
Basic	$	0.01	$	0.10
Diluted	$	0.01	$	0.10

Weighted-average common shares outstanding
Basic	20,068		19,947
Diluted	20,266		20,279

Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	(42)		(54)
Unrealized gains on available-for-sale securities	4		—
Comprehensive income	$	168	$	1,891


x			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended November 30, 2024

OR

o			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______


Title of Each Class Common Stock, par value $0.001 per share			Trading Symbol SLP			Name of Each Exchange on Which Registered NASDAQ Stock Market LLC


	Three Months Ended

(in thousands)		November 30, 2024		November 30, 2023
Cash flows from operating activities
Net income		$	206	$	1,945
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		2,265		1,091
Change in fair value of contingent consideration		—		(110)
Amortization of investment discounts		(39)		(395)
Stock-based compensation		1,724		1,362
Deferred income taxes		40		(388)

Unrealized gains (losses) on available-for-sale securities		4		—

Currency translation adjustments		(42)		(54)
(Increase) decrease in
Accounts receivable		(3,668)		(145)
Prepaid income taxes		(130)		767
Prepaid expenses and other assets		708		(1,515)
Increase (decrease) in
Accounts payable		518		173
Other liabilities		(4,095)		(2,129)

Deferred revenue		1,235		(440)
Net cash (used in) provided by operating activities		(1,274)		162

Cash flows from investing activities
Purchases of property and equipment		(86)		—
Purchase of short-term investments		(3,500)		(30,544)
Proceeds from maturities of short-term investments		1,500		14,778

Purchased intangibles		(186)		(247)

Net working capital & excess cash settlement - Pro-ficiency acquisition		(227)		—
Capitalized computer software development costs		(639)		(851)
Net cash used in investing activities		(3,138)		(16,864)

Cash flows from financing activities
Payment of dividends		—		(1,196)

Proceeds from the exercise of stock options		288		164

Net cash provided by (used in) financing activities		288		(1,032)

Net decrease in cash and cash equivalents		(4,124)		(17,734)
Cash and cash equivalents, beginning of period		$	10,311	$	57,523
Cash and cash equivalents, end of period		$	6,187	$	39,789

Supplemental disclosures of cash flow information
Income taxes paid		$	112	$	96
Non-Cash Investing and Financing Activities


Right of use assets capitalized		$	451	$	—


Equipment			5 years
Computer equipment			3 to 7 years
Furniture and fixtures			5 to 7 years
Leasehold improvements			Shorter of the asset life or lease term


(in thousands)
ROU assets	$	1,342
Lease liabilities, current	$	485
Lease liabilities, long-term	$	835
Operating lease costs	$	147
Weighted-average remaining lease term	4.52 years
Weighted-average discount rate	4.71		%


(in thousands)	CPP		QSP		ALI		MC		Total



Balance, August 31, 2024	$	7,323	$	11,776	$	31,108	$	45,871	$	96,078
Addition	—		—		—		—		—
Measurement period adjustment*	—		—		92		135		227
Impairments	—		—		—		—		—
Balance, November 30, 2024	$	7,323	$	11,776	$	31,200	$	46,006	$	96,305


(in thousands)	Amortization Period	Acquisition Value		Accumulated Amortization		Net Book Value
Trade names	None	$	12,610	$	—	$	12,610
Covenants not to compete	Straight line 2 to 3 years	100		33		67
Other internal use software	Straight line 3 to 13 years	794		60		734
Customer relationships	Straight line 8 to 14 years	10,540		2,980		7,560
ERP	Straight line 15 years	2,529		424		2,105

		$	26,573	$	3,497	$	23,076


(in thousands)
Years Ending August 31,	Amount
Remainder of 2025	$	956
2026	$	1,264
2027	$	1,216
2028	$	1,052
2029	$	1,052


Level Input:						Input Definition:
Level I						Inputs that are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II						Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III						Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.


	November 30, 2024

(in thousands)	Amortized cost		Unrealized gains		Unrealized losses		Fair value
Level 1:
Term deposits (due within one year)	$	3,500	$	—	$	—	$	3,500
Corporate debt securities (due within one year)	8,479		4		—		8,483
Total Level 1	11,979		4		—		11,983
Level 2:	—		—		—		—
Level 3:	—		—		—		—
Total available-for-sale securities	$	11,979	$	4	$	—	$	11,983


(in thousands, except per share and weighted-average amounts)
Activity for the three months ended November 30, 2024	Number of Options	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life
Outstanding, August 31, 2024	1,906	$	37.64	6.91 years
Granted	347	33.29
Exercised	(37)	13.97
Canceled/Forfeited	(59)	44.03
Outstanding, November 30, 2024	2,157	$	37.17	7.22 years
Vested and Exercisable, November 30, 2024	995	$	33.91	5.45 years
Vested and Expected to Vest, November 30, 2024	2,104	$	37.08	7.18 years



(in thousands, except weighted-average amounts)	Three Months Ended November 30, 2024			Fiscal Year 2024
Estimated fair value of awards granted	$	6,057		$	11,902
Unvested forfeiture rate	6.25		%	5.53		%
Weighted-average grant price	$	33.29		$	40.76
Weighted-average market price	$	33.29		$	40.76
Weighted-average volatility	46.98		%	44.63		%
Weighted-average risk-free rate	3.93		%	4.77		%
Weighted-average dividend yield	0.00		%	0.59		%
Weighted-average expected life	6.61 years			6.59 years


Exercise Price Per Share				Awards Outstanding				Awards Exercisable
Low		High		Quantity	Weighted -Average Remaining Contractual Life	Weighted-Average Exercise Price		Quantity	Weighted-Average Remaining Contractual Life	Weighted-Average Exercise Price
$	6.85	$	9.77	109	1.24 years	$	9.71	109	1.24 years	$	9.71
$	9.78	$	18.76	139	2.23 years	$	10.07	139	2.23 years	$	10.07
$	18.77	$	33.40	505	8.17 years	$	31.02	142	4.35 years	$	25.32
$	33.41	$	47.63	1,126	8.14 years	$	41.35	436	7.60 years	$	41.26
$	47.64	$	66.14	278	6.56 years	$	55.67	169	6.15 years	$	57.31
				2,157	7.22 years	$	37.17	995	5.45 years	$	33.91



*						Filed herewith.
**						Furnished herewith.
***						The XBRL related information in Exhibit 101 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
^						Schedules, exhibits, and similar supporting attachments or agreements are omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.
†						Refers to management contracts or compensatory plans or arrangements.
+						Portions of the exhibit, marked by brackets, have been omitted because the omitted information (i) is not material and (ii) would likely cause competitive harm if publicly disclosed.


(in thousands)	Amount
Contingent consideration at August 31, 2024	$	640
Contingent consideration payment	—
Change in fair value of contingent consideration	—


Contingent consideration at November 30, 2024	$	640



(in thousands)	Three Months Ended November 30, 2023
	Software			Services			Total
Revenues	$	7,589		$	6,911		$	14,500
Cost of revenues	991			3,661			4,652
Gross profit	$	6,598		$	3,250		$	9,848
Gross margin	87		%	47		%	68		%



(in thousands)	Three Months Ended				% of Revenue
	November 30, 2024		November 30, 2023		November 30, 2024		November 30, 2023		$ Change		% Change
Revenue	$	18,924	$	14,500	100	%	100	%	$	4,424	31	%
Cost of revenue	8,706		4,652		46	%	32	%	4,054		87	%
Gross profit	10,218		9,848		54	%	68	%	370		4	%
Research and development	1,848		1,217		10	%	8	%	631		52	%
Sales and marketing	2,851		1,989		15	%	14	%	862		43	%
General and administrative	5,393		5,682		28	%	39	%	(289)		(5)	%
Total operating expenses	10,092		8,888		53	%	61	%	1,204		14	%
Income from operations	126		960		1	%	7	%	(834)		(87)	%
Other income, net	144		1,446		1	%	10	%	(1,302)		(90)	%
Income before income taxes	270		2,406		1	%	17	%	(2,136)		(89)	%
Provision for income taxes	(64)		(461)		—	%	(3)	%	397		86	%
Net income	$	206	$	1,945	1	%	13	%	$	(1,739)	(89)	%


EXHIBIT NUMBER						DESCRIPTION
2.1^						Agreement and Plan of Merger, dated July 23, 2014, by and among the Company, Cognigen Corporation and the other parties thereto, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K/A filed November 18, 2014.
2.2^						Stock Purchase Agreement by and among Simulations Plus, Inc., DILIsym Services, Inc., the Shareholders’ Representative and the Shareholders of DILIsym Services, Inc., incorporated by reference to Exhibit 10.13 to the Company’s Form 10-Q filed July 10, 2017.
2.3^						Share Purchase and Contribution Agreement Relating to Lixoft, dated March 31, 2020, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed April 2, 2020.
2.4^						Agreement and Plan of Merger, dated June 16, 2023, by and among Simulations Plus, Inc., Insight Merger Sub, Inc., Immunetrics, Inc. and LaunchCyte LLC, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed June 20, 2023.
2.5^+						Stock Purchase Agreement, by and among the Company, Pro-ficiency Holdings, Inc. (“Pro-ficiency”), each of the stockholders of Pro-ficiency (collectively, the “Sellers”) and WRYP Stockholders Services, LLC, solely in its capacity as the Sellers’ Representative, dated June 11, 2024, incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed June 12, 2024.
3.1						Articles of Incorporation of the Company, incorporated by reference to an Exhibit 3.1 to the Company’s Form 10-K filed November 29, 2010.
3.2						Amended and Restated Bylaws of the Company, incorporated by reference to an exhibit to the Company’s Form 10-K filed November 29, 2010.
3.3						Certificate of Amendment to the Amended and Restated Bylaws of Simulations Plus, Inc., incorporated by reference to Appendix A to the Company’s Definitive Schedule 14A Proxy Statement filed December 31, 2018.
4.1						Form of Common Stock Certificate, incorporated by reference to the Company’s Registration Statement on Form SB-2 (Registration No. 333-6680) filed March 25, 1997.
4.2						Share Exchange Agreement, incorporated by reference to the Company’s Registration Statement on Form SB-2 (Registration No. 333-6680) filed March 25, 1997.





































31.1 *						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 *						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 **						Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS***						Inline XBRL Instance Document
101.SCH***						Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents




104***						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 attachments).


		SIMULATIONS PLUS, INC.

Date:	January 8, 2025	By:	/s/ Will Frederick
			Will Fredrick Chief Financial Officer (Principal financial officer) and Chief Operating Officer


Dated: January 8, 2025	By:	/s/ Shawn O’Connor
		Shawn O’Connor Chief Executive Officer (Principal Executive Officer)


Dated: January 8, 2025	By:	/s/ Will Frederick
		Will Frederick Chief Financial Officer and Chief Operating Officer (Principal Financial Officer)


/s/ Shawn O’Connor
Shawn O’Connor
Chief Executive Officer
(Principal Executive Officer)
January 8, 2025


/s/ Will Frederick
Will Frederick
Chief Financial Officer and Chief Operating Officer
(Principal Financial Officer)
January 8, 2025