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 first quarter fiscal 2025, ended November 30, 2024.

First Quarter 2025 Financial Highlights (compared to first quarter 2024)

• Total revenue increased 31% to $18.9 million
• Software revenue increased 41% to $10.7 million, representing 57% of total revenue
• Services revenue increased 19% to $8.2 million, representing 43% of total revenue
• Gross profit of $10.2 million; gross margin was 54%
• Net income of $0.2 million and diluted EPS of $0.01 compared to net income of $1.9 million and diluted EPS of $0.10
• Adjusted EBITDA of $4.5 million, representing 24% of total revenue, compared to $3.4 million, representing 23% of total revenue
• Adjusted net income of $3.4 million and adjusted diluted EPS of $0.17, compared to adjusted net income of $3.7 million and adjusted diluted EPS of $0.18

Management Commentary

“We are off to a strong start to fiscal 2025 with total revenue increasing by 31% in the first quarter,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Our team delivered 41% growth across our software platforms.  MonolixSuite™  was a meaningful contributor with a 43% growth rate this quarter.  We are seeing increased adoption for this leading edge solution including a recent commitment from a major pharmaceutical client to fully implement PKanalix®, which is the user-friendly and fast application for compartmental analysis, non-compartmental analysis, and bioequivalence studies component of MonolixSuite.  Additionally, we saw 40% growth in our Quantitative Systems Pharmacology (QSP) business unit with strong demand for model licenses in the disease areas of Psoriatic Arthritis and Crohn’s Disease.

“Services revenue increased 19%, however this segment faced some temporary headwinds this quarter. There were some client-driven data delays that postponed the ramp up of certain projects into our fiscal year second quarter. We were pleased to see that this quarter’s bookings were especially strong in our Clinical Pharmacology & Pharmacometrics (CPP) and Medical Communications (MC) business units.

“Overall, our team achieved solid results despite ongoing funding challenges and cost constraints in the pharma and biotech sectors. The integration of our Adaptive Learning and Insights (ALI) and MC business units is progressing well. For fiscal 2025, we expect momentum to be strongest in the back half of the year, which puts us on track to meet our stated guidance.”

Fiscal 2025 Guidance

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 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.

View full results here.