We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SLP's Q2 Earnings Top, Sales Up Y/Y Despite Industry Headwinds
Read MoreHide Full Article
Simulations Plus, Inc. (SLP - Free Report) reported second-quarter fiscal 2025 adjusted earnings of 31 cents per share, which fell 3% year over year. However, the figure surpassed the Zacks Consensus Estimate of 25 cents per share.
Quarterly revenues jumped 23% year over year to $22.4 million, driven by increasing momentum across its software and services business segments. The growing uptake of its flagship solutions, including GastroPlus, MonolixSuite and ADMET Predictor, fueled the top-line expansion. The Adaptive Learning & Insights (“ALI”) and Medical Communications (“MC”) business units, acquired through the Pro-ficiency buyout in June 2024, contributed $3.3 million in the fiscal second quarter.
The top line surpassed the Zacks Consensus Estimate by 3.1%. SLP’s organic revenue growth during the quarter was 5%.
However, the broader biopharma industry continues to experience cost pressure and funding challenges, adversely impacting investment in R&D and software adoption.
SLP’s Quarter in Details
Fiscal second-quarter revenues from Software (60% of total quarterly revenues) rose 16% year over year to $13.5 million, driven by new customer wins and increasing sales with existing customers of GastroPlus, MonolixSuite and ADMET Predictor offerings. GastroPlus, MonolixSuite, ADMET Predictor, Pro-ficiency and Others contributed 46%, 23%, 17%, 7% and 7%, respectively, to total software revenues. SLP added 10 new customers and had seven upsells in the fiscal second quarter for ADMETPredictor.
The renewal rate for commercial customers was 90% (based upon accounts) and 84% (based on fees) compared with 94% and 85% in the prior-year quarter, respectively.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Services’ revenues (40%) improved 34% to $8.9 million but remained flat year over year on an organic basis. This segment was driven by strong results in the Clinical Pharmacology & Pharmacometrics (CPP) and MC business units. CPP services revenue grew 19%, while MC services brought in $2.3 million.
However, sales of Physiologically Based Pharmacokinetics and Quantitative Systems Pharmacology saw declines of 23% and 7% year over year, respectively.
The total value of services projects handled during the quarter was $203 million. Healthy bookings in both the CPP and MC units contributed to a 13% year-over-year increase in the company's backlog, which was $20.4 million at the end of the reported quarter.
SLP’s Operating Details
The gross margin in the quarter under review was 59% compared with 72% in the prior-year quarter. The Software segment’s gross margin was 81% compared with 88% a year ago. Services’ gross margin was 25%, down from 44%.
The drop in total gross margin was mainly due to a $4.2 million rise in the cost of revenues. Software costs increased by $1.2 million, including $0.8 million from Pro-ficiency amortization and $0.4 million from higher capitalized software amortization. Services cost of revenues rose by $3 million, mainly due to higher costs from the acquired MC unit and moving some expenses from G&A to cost of revenues after last year’s reorganization.
Total operating expenses, as a percentage of revenues, were 46% compared with 48% a year ago.
Income from operations was $2.7 million compared with $4.4 million a year ago. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin was 29%, a decrease from 39% in the prior-year quarter.
SLP’s Balance Sheet
As of Feb. 28, 2025, cash and short-term investments were $21.4 million compared with $18.2 million as of Nov. 30, 2024.
SLP Reiterates Fiscal 2025 Guidance
SLP expects strong momentum in the second half of fiscal 2025.
Simulations Plus expects revenues to be between $90 million and $93 million. This indicates an increase of 28-33% from fiscal 2024 revenues. In addition, the Pro-ficiency acquisition is expected to contribute an additional $15-$18 million to revenues.
The company expects the Software segment mix to be 55-60% of total revenues. SLP estimates adjusted earnings per share to be between $1.07 and $1.20 and adjusted EBITDA margin between 31% and 33%.
Recent Performance of Other Companies in Tech Space
BlackBerry Limited (BB - Free Report) reported the fourth quarter of fiscal 2025 non-GAAP earnings per share (EPS) of 3 cents. The figure was better than the company’s estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 3 cents. The Zacks Consensus Estimate was pegged at 2 cents per share.
BB’s shares have gained 11.3% in the past year.
Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2025 (ended Feb. 1) adjusted EPS of 64 cents, which surpassed the Zacks Consensus Estimate of 39 cents. However, the bottom line declined 3% year over year.
Shares of CIEN have soared 18% in the past year.
Descartes Systems (DSGX - Free Report) reported fourth-quarter fiscal 2025 non-GAAP EPS of 43 cents, which met the Zacks Consensus Estimate. The bottom line expanded 16% year over year and 2% sequentially.
Shares of DSGX have gained 12.3% in the past year.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
SLP's Q2 Earnings Top, Sales Up Y/Y Despite Industry Headwinds
Simulations Plus, Inc. (SLP - Free Report) reported second-quarter fiscal 2025 adjusted earnings of 31 cents per share, which fell 3% year over year. However, the figure surpassed the Zacks Consensus Estimate of 25 cents per share.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly revenues jumped 23% year over year to $22.4 million, driven by increasing momentum across its software and services business segments. The growing uptake of its flagship solutions, including GastroPlus, MonolixSuite and ADMET Predictor, fueled the top-line expansion. The Adaptive Learning & Insights (“ALI”) and Medical Communications (“MC”) business units, acquired through the Pro-ficiency buyout in June 2024, contributed $3.3 million in the fiscal second quarter.
The top line surpassed the Zacks Consensus Estimate by 3.1%. SLP’s organic revenue growth during the quarter was 5%.
However, the broader biopharma industry continues to experience cost pressure and funding challenges, adversely impacting investment in R&D and software adoption.
SLP’s Quarter in Details
Fiscal second-quarter revenues from Software (60% of total quarterly revenues) rose 16% year over year to $13.5 million, driven by new customer wins and increasing sales with existing customers of GastroPlus, MonolixSuite and ADMET Predictor offerings. GastroPlus, MonolixSuite, ADMET Predictor, Pro-ficiency and Others contributed 46%, 23%, 17%, 7% and 7%, respectively, to total software revenues. SLP added 10 new customers and had seven upsells in the fiscal second quarter for ADMETPredictor.
The renewal rate for commercial customers was 90% (based upon accounts) and 84% (based on fees) compared with 94% and 85% in the prior-year quarter, respectively.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote
Services’ revenues (40%) improved 34% to $8.9 million but remained flat year over year on an organic basis. This segment was driven by strong results in the Clinical Pharmacology & Pharmacometrics (CPP) and MC business units. CPP services revenue grew 19%, while MC services brought in $2.3 million.
However, sales of Physiologically Based Pharmacokinetics and Quantitative Systems Pharmacology saw declines of 23% and 7% year over year, respectively.
The total value of services projects handled during the quarter was $203 million. Healthy bookings in both the CPP and MC units contributed to a 13% year-over-year increase in the company's backlog, which was $20.4 million at the end of the reported quarter.
SLP’s Operating Details
The gross margin in the quarter under review was 59% compared with 72% in the prior-year quarter. The Software segment’s gross margin was 81% compared with 88% a year ago. Services’ gross margin was 25%, down from 44%.
The drop in total gross margin was mainly due to a $4.2 million rise in the cost of revenues. Software costs increased by $1.2 million, including $0.8 million from Pro-ficiency amortization and $0.4 million from higher capitalized software amortization. Services cost of revenues rose by $3 million, mainly due to higher costs from the acquired MC unit and moving some expenses from G&A to cost of revenues after last year’s reorganization.
Total operating expenses, as a percentage of revenues, were 46% compared with 48% a year ago.
Income from operations was $2.7 million compared with $4.4 million a year ago. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin was 29%, a decrease from 39% in the prior-year quarter.
SLP’s Balance Sheet
As of Feb. 28, 2025, cash and short-term investments were $21.4 million compared with $18.2 million as of Nov. 30, 2024.
SLP Reiterates Fiscal 2025 Guidance
SLP expects strong momentum in the second half of fiscal 2025.
Simulations Plus expects revenues to be between $90 million and $93 million. This indicates an increase of 28-33% from fiscal 2024 revenues. In addition, the Pro-ficiency acquisition is expected to contribute an additional $15-$18 million to revenues.
The company expects the Software segment mix to be 55-60% of total revenues. SLP estimates adjusted earnings per share to be between $1.07 and $1.20 and adjusted EBITDA margin between 31% and 33%.
SLP’s Zacks Rank
Currently, Simulations Plus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in Tech Space
BlackBerry Limited (BB - Free Report) reported the fourth quarter of fiscal 2025 non-GAAP earnings per share (EPS) of 3 cents. The figure was better than the company’s estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 3 cents. The Zacks Consensus Estimate was pegged at 2 cents per share.
BB’s shares have gained 11.3% in the past year.
Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2025 (ended Feb. 1) adjusted EPS of 64 cents, which surpassed the Zacks Consensus Estimate of 39 cents. However, the bottom line declined 3% year over year.
Shares of CIEN have soared 18% in the past year.
Descartes Systems (DSGX - Free Report) reported fourth-quarter fiscal 2025 non-GAAP EPS of 43 cents, which met the Zacks Consensus Estimate. The bottom line expanded 16% year over year and 2% sequentially.
Shares of DSGX have gained 12.3% in the past year.