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Simulations Plus (SLP) Q2 Earnings Beat, Revenues Up Y/Y
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Simulations Plus (SLP - Free Report) reported second-quarter fiscal 2023 earnings of 20 cents per share, down 4.8% on a year-over-year basis. However, the figure beat the Zacks Consensus Estimate by 11%.
Revenues of $15.8 million increased 6% year over year (up 8% on constant currency basis), driven by higher revenues in Software and Services business segments. However, the top line missed the Zacks Consensus Estimate by 2.5%.
Quarter in Details
Revenues from Software (67% of the total quarterly revenues) increased 7% year over year to $10.5 million due to changes in renewal pattern and shift in revenue seasonality. Breaking up the revenues of this segment, GastroPlus, MonolixSuite, ADMET Predictor and other software contributed 55%, 20%, 18% and 7%, respectively.
Sales of GastroPlus were up 18% while sales of MonolixSuite and ADMET Predictor offerings declined 8% and 2% year over year, respectively.
The renewal rate for commercial customers came in at 94% (based upon fees) and 80% (based on accounts) compared with 96% and 87% in the prior quarter, respectively.
Services’ revenues (33% of total quarterly revenues) improved 4% to $5.3 million. Breaking up the services’ revenues, PK/PD, QSP/QST, PB/PK and other services represented 50%, 20%, 23% and 7%, respectively.
Services’ backlog was $15 million at the end of the reported quarter, down 11.8% year over year.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
The gross margin in the quarter under review was 83%, up 200 basis points (bps) on a year-over-year basis. Software segment’s gross margin came in at 92%, unchanged from the prior-year quarter’s levels. Services’ gross margin was 66%, up 700 bps from the prior-year quarter’s figure.
Total operating expenses, as a percentage of revenues, came in at 58% compared with 44% in the prior-year quarter.
The operating income margin was 26% compared with 37% reported in the year-ago period. Adjusted EBITDA margin came in at 40% compared with 48% in the year-ago period.
Balance Sheet
As of Feb 28, 2023, cash and short-term investments were $115.3 million compared with $131.5 million as of Nov 30, 2022.
The company declared a cash dividend of 6 cents per share payable on May 1, to stockholders as of Apr 24.
Fiscal 2023 Outlook Reiterated
For fiscal 2023, Simulations Plus expects revenue growth of 10-15% year over year and in the range of $59.3-$62 million. The company expects Software and Services to consist 60-65% and 35-40% of revenues, respectively. SLP expects earnings per share to increase in the band of 5-10%.
Zacks Rank & Other Stocks to Consider
Currently, Simulations Plus carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.85 per share, rising 10.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 22.6% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 56.7% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, rising 66.7% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 38.2% in the past year.
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Simulations Plus (SLP) Q2 Earnings Beat, Revenues Up Y/Y
Simulations Plus (SLP - Free Report) reported second-quarter fiscal 2023 earnings of 20 cents per share, down 4.8% on a year-over-year basis. However, the figure beat the Zacks Consensus Estimate by 11%.
Revenues of $15.8 million increased 6% year over year (up 8% on constant currency basis), driven by higher revenues in Software and Services business segments. However, the top line missed the Zacks Consensus Estimate by 2.5%.
Quarter in Details
Revenues from Software (67% of the total quarterly revenues) increased 7% year over year to $10.5 million due to changes in renewal pattern and shift in revenue seasonality. Breaking up the revenues of this segment, GastroPlus, MonolixSuite, ADMET Predictor and other software contributed 55%, 20%, 18% and 7%, respectively.
Sales of GastroPlus were up 18% while sales of MonolixSuite and ADMET Predictor offerings declined 8% and 2% year over year, respectively.
The renewal rate for commercial customers came in at 94% (based upon fees) and 80% (based on accounts) compared with 96% and 87% in the prior quarter, respectively.
Services’ revenues (33% of total quarterly revenues) improved 4% to $5.3 million. Breaking up the services’ revenues, PK/PD, QSP/QST, PB/PK and other services represented 50%, 20%, 23% and 7%, respectively.
Services’ backlog was $15 million at the end of the reported quarter, down 11.8% year over year.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote
Operating Details
The gross margin in the quarter under review was 83%, up 200 basis points (bps) on a year-over-year basis. Software segment’s gross margin came in at 92%, unchanged from the prior-year quarter’s levels. Services’ gross margin was 66%, up 700 bps from the prior-year quarter’s figure.
Total operating expenses, as a percentage of revenues, came in at 58% compared with 44% in the prior-year quarter.
The operating income margin was 26% compared with 37% reported in the year-ago period. Adjusted EBITDA margin came in at 40% compared with 48% in the year-ago period.
Balance Sheet
As of Feb 28, 2023, cash and short-term investments were $115.3 million compared with $131.5 million as of Nov 30, 2022.
The company declared a cash dividend of 6 cents per share payable on May 1, to stockholders as of Apr 24.
Fiscal 2023 Outlook Reiterated
For fiscal 2023, Simulations Plus expects revenue growth of 10-15% year over year and in the range of $59.3-$62 million. The company expects Software and Services to consist 60-65% and 35-40% of revenues, respectively. SLP expects earnings per share to increase in the band of 5-10%.
Zacks Rank & Other Stocks to Consider
Currently, Simulations Plus carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology space are Arista Networks (ANET - Free Report) , Perion Network (PERI - Free Report) and Pegasystems (PEGA - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.85 per share, rising 10.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 22.6% in the past year.
The Zacks Consensus Estimate for Perion’s 2023 earnings is pegged at $2.69 per share, rising 16% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
Perion’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 31.7%. Shares of PERI have increased 56.7% in the past year.
The Zacks Consensus Estimate for Pegasystems’ 2023 earnings is pegged at $1.35 per share, rising 66.7% in the past 60 days.
Pegasystems’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average surprise being 11.2%. Shares of PEGA have declined 38.2% in the past year.