Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Simulations Plus Reports Third Quarter Fiscal 2024 Financial Results By: Simulations Plus, Inc. via Business Wire July 02, 2024 at 16:06 PM EDT Total revenue of $18.5 million and diluted earnings per share (EPS) of $0.15 Maintains full-year revenue guidance of $69 to $72 million and updates EPS guidance Simulations Plus, Inc. (Nasdaq: SLP) (“Simulations Plus”), a leading provider of biosimulation, simulation-enabled performance and intelligence solutions, and medical communications for the biopharma industry, today reported financial results for its third quarter fiscal 2024, ended May 31, 2024. Third Quarter 2024 Financial Highlights (compared to third quarter 2023) Total revenue increased 14% to $18.5 million Software revenue increased 12% to $11.9 million, representing 64% of total revenue Services revenue increased 18% to $6.6 million, representing 36% of total revenue Gross profit was constant at $13.3 million; gross margin was 71% Adjusted EBITDA of $5.7 million, representing 31% of total revenue Net income of $3.1 million and diluted earnings per share (EPS) of $0.15 versus net income of $4.0 million and diluted EPS of $0.20 Adjusted diluted EPS excluding the impact of acquisition costs of $0.19 versus adjusted diluted EPS of $0.21 Nine Months 2024 Financial Highlights (compared to nine months 2023) Total revenue increased 17% to $51.3 million Software revenue increased 14% to $31.1 million, representing 61% of total revenue Services revenue increased 21% to $20.2 million, representing 39% of total revenue Gross profit increased 2% to $36.3 million; gross margin was 71% Adjusted EBITDA of $16.2 million, representing 32% of total revenue Net income of $9.1 million and diluted EPS of $0.45 versus net income of $9.4 million and diluted EPS of $0.46 Adjusted diluted EPS excluding the impact of acquisition costs was constant at of $0.49 Management Commentary “Our third quarter results reflected continued solid performance in both our software and services segments,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Total revenue increased 14%, led by higher software sales in our Cheminformatics and Clinical Pharmacology & Pharmacometrics (CPP) business units, with strong growth in our ADMET Predictor® and MonolixSuite™ platforms, respectively. Our Physiologically Based Pharmacokinetics (PBPK) business unit also performed well, reflecting higher revenues from GastroPlus®. During the quarter, we were excited to launch GastroPlus X, the next generation of physiologically based pharmacokinetics/biopharmaceutics (PBPK/PBBM) modeling and simulation software and believe it will become a meaningful addition to our suite of leading-edge solutions. The 18% increase in services revenue was driven by strong growth in our Quantitative Systems Pharmacology (QSP) and CPP business units. “Biotech funding is starting to show signs of recovery, most notably for companies that have drug candidates in the clinic. We continue to be cautiously optimistic about the funding environment for our biotech clients. We see a range of spending patterns among large pharmaceutical companies. Some are increasing expenditures, while others remain conservative, with most falling in between depending on various internal and external market factors. Overall, the market is in a better position today compared to a year ago. “Our acquisition of Pro-ficiency on June 11th brings together our collective expertise in simulations, AI technologies and focus on science, creating a one-of-a-kind platform that spans across the drug development continuum. The Pro-ficiency integration and collaboration is progressing in-line with our internal plan and schedule with positive responses from our clients. “Our performance in the first nine months of the year remains aligned with our original fiscal 2024 revenue guidance. The newly formed Clinical Simulations and Medical Communications (CSMC) business unit is expected to contribute approximately $3 million to our fiscal 2024 revenue. We are entering our final fiscal quarter of 2024 with a healthy pipeline and remain confident that Simulations Plus is well positioned to achieve its goals for the fiscal year. Going forward, we remain committed to a disciplined growth strategy that will deliver long-term returns for our shareholders.” Fiscal 2024 Guidance Fiscal 2024 Guidance Revenue $69M - $72M Revenue growth 15 - 20% Software mix 55 - 60% Services mix 40 - 45% Diluted EPS $0.46 - $0.48 Adjusted diluted EPS $0.54 - $0.56 Quarterly Dividend The Simulations Plus Board of Directors has determined to discontinue the Company’s quarterly cash dividend and reallocate these funds to our capital allocation strategy for investing in growth initiatives that are intended to generate long-term shareholder value. The final dividend of $0.06 per share of the Company’s common stock will be paid on August 5, 2024, to shareholders of record as of July 29, 2024. 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 2023 ESG update. 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 the Company’s 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 will be available on our website on the investor relations page of the Simulations Plus website at www.simulations-plus.com/investorscorporate-profile/corporate-profile/. A replay of the webcast will be available on the website approximately one hour following the call. Non-GAAP Definitions Adjusted EBITDA Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, (gain) loss on currency exchange, any acquisition- or financial-transaction-related expenses, and any asset impairment charges. Currency exchange excluded represents the exchange rate fluctuations on the foreign currency denominated transactions. The impact of transactions in foreign currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency. 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 represents a measure that we believe is 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 Adjusted EBITDA is useful in evaluating our core operating results. However, Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income or operating income as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity. The Company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to nonrecurring, unusual items. Adjusted Diluted EPS Adjusted diluted EPS is calculated based on net income excluding the impact of any acquisition- or financial-transaction-related expenses, any asset impairment charges, and tax provisions / benefits related to the previous items. 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 periods. The Company believes that the use of non-GAAP measures helps investors to gain a better understanding of the Company’s core operating results and future prospects, consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts. About Simulations Plus 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, 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. 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,” “expect,” and “anticipate” 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. Factors that could cause or contribute to such differences include, but are not limited to: our ability to successfully integrate the Pro-ficiency business with our own, as well as expenses we may incur in connection therewith, 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, 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 and annual reports and filed with the U.S. Securities and Exchange Commission. SIMULATIONS PLUS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended (in thousands, except per common share amounts) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Revenues Software $ 11,908 $ 10,632 $ 31,111 $ 27,193 Services 6,636 5,602 20,238 16,755 Total revenues 18,544 16,234 51,349 43,948 Cost of revenues Software 1,400 908 3,739 2,636 Services 3,887 2,053 11,284 5,616 Total cost of revenues 5,287 2,961 15,023 8,252 Gross profit 13,257 13,273 36,326 35,696 Operating expenses Research and development 1,300 945 3,829 3,428 Sales and marketing 2,399 1,683 6,337 4,898 General and administrative 7,678 6,548 18,878 18,361 Total operating expenses 11,377 9,176 29,044 26,687 Income from operations 1,880 4,097 7,282 9,009 Other income 2,010 843 4,266 2,617 Income before income taxes 3,890 4,940 11,548 11,626 Provision for income taxes (753 ) (932 ) (2,437 ) (2,199 ) Net income $ 3,137 $ 4,008 $ 9,111 $ 9,427 Earnings per share Basic $ 0.16 $ 0.20 $ 0.46 $ 0.47 Diluted $ 0.15 $ 0.20 $ 0.45 $ 0.46 Weighted-average common shares outstanding Basic 19,995 19,972 19,972 20,123 Diluted 20,433 20,355 20,324 20,512 Other comprehensive (loss) income, net of tax Foreign currency translation adjustments (56 ) 144 (125 ) 174 Unrealized losses on available-for-sale securities $ (39 ) $ — $ (39 ) $ — Comprehensive income $ 3,042 $ 4,152 $ 8,947 $ 9,601 SIMULATIONS PLUS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) (in thousands, except share and per share amounts) May 31, 2024 August 31, 2023 ASSETS Current assets Cash and cash equivalents $ 109,092 $ 57,523 Accounts receivable, net of allowance for credit losses of $149 and $46 10,144 10,201 Prepaid income taxes 1,202 804 Prepaid expenses and other current assets 5,303 3,904 Short-term investments 9,875 57,940 Total current assets 135,616 130,372 Long-term assets Capitalized computer software development costs, net of accumulated amortization of $18,502 and $17,199 12,614 11,335 Property and equipment, net 882 671 Operating lease right-of-use assets 948 1,247 Intellectual property, net of accumulated amortization of $10,498 and $9,301 7,492 8,689 Other intangible assets, net of accumulated amortization of $2,862 and $2,107 12,712 12,825 Goodwill 19,099 19,099 Deferred tax assets 2,804 1,438 Other assets 524 425 Total assets $ 192,691 $ 186,101 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 658 $ 144 Accrued compensation 4,111 4,392 Accrued expenses 894 659 Contracts payable 3,810 3,250 Operating lease liability - current portion 410 442 Deferred revenue 1,437 3,100 Total current liabilities 11,320 11,987 Long-term liabilities Operating lease liability 512 755 Contracts payable – net of current portion — 3,330 Total liabilities 11,832 16,072 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; 20,007,488 and 19,937,961 shares issued and outstanding 150,451 144,974 Retained earnings 30,713 25,196 Accumulated other comprehensive loss (305 ) (141 ) Total shareholders' equity 180,859 170,029 Total liabilities and shareholders' equity $ 192,691 $ 186,101 SIMULATIONS PLUS, INC. Trended Financial Information* (Unaudited) (in millions except earnings per share amounts) FY 2023 FY 2024 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year YTD Revenue Software $ 6.1 $ 10.5 $ 10.6 $ 9.3 $ 7.6 $ 11.6 $ 11.9 $ 36.5 $ 31.1 Services $ 5.9 $ 5.3 $ 5.6 $ 6.3 $ 6.9 $ 6.7 $ 6.6 $ 23.1 $ 20.2 Total $ 12.0 $ 15.8 $ 16.2 $ 15.6 $ 14.5 $ 18.3 $ 18.5 $ 59.6 $ 51.3 Gross Margin Software 85.4 % 92.0 % 91.5 % 89.4 % 86.9 % 88.4 % 88.2 % 90.1 % 88.0 % Services 69.7 % 66.2 % 63.4 % 62.1 % 47.0 % 44.2 % 41.4 % 65.3 % 44.2 % Total 77.7 % 83.4 % 81.8 % 78.4 % 67.9 % 72.2 % 71.5 % 80.5 % 70.7 % Income from operations $ 0.9 $ 4.0 $ 4.1 $ (0.3 ) $ 1.0 $ 4.4 $ 1.9 $ 8.7 $ 7.3 Operating Margin 7.3 % 25.6 % 25.2 % -1.8 % 6.6 % 24.3 % 10.1 % 14.6 % 14.2 % Net Income $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 10.0 $ 9.1 Diluted Earnings Per Share $ 0.06 $ 0.20 $ 0.20 $ 0.03 $ 0.10 $ 0.20 $ 0.15 $ 0.49 $ 0.45 Adjusted EBITDA $ 3.0 $ 6.2 $ 6.5 $ 4.9 $ 3.4 $ 7.1 $ 5.7 $ 20.6 $ 16.2 Adjusted Diluted EPS $ 0.07 $ 0.21 $ 0.21 $ 0.18 $ 0.10 $ 0.20 $ 0.19 $ 0.67 $ 0.10 Cash Flow from Operations $ 4.7 $ 5.5 $ 8.5 $ 3.1 $ 0.2 $ 5.8 $ 5.7 $ 21.9 $ 11.7 Revenue Breakdown by Region Americas $ 8.5 $ 10.6 $ 10.8 $ 11.0 $ 10.9 $ 12.5 $ 12.4 $ 40.8 $ 35.8 EMEA 2.1 3.6 3.4 2.6 2.3 4.7 4.5 11.7 11.5 Asia Pacific 1.3 1.5 2.1 2.1 1.3 1.2 1.6 7.0 4.1 Total $ 12.0 $ 15.8 $ 16.2 $ 15.6 $ 14.5 $ 18.3 $ 18.5 $ 59.6 $ 51.3 Software Performance Metrics Average Revenue per Customer (in thousands) Commercial $ 68.0 $ 110.0 $ 97.0 88.0 $ 79.0 $ 113.0 $ 97.0 Services Performance Metrics Backlog (in millions) $ 15.8 $ 15.4 $ 15.7 $ 19.5 $ 18.9 $ 18.0 $ 19.6 *Numbers may not add due to rounding SIMULATIONS PLUS, INC. Reconciliation of Adjusted EBITDA to Net Income* (Unaudited) (in millions) FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year Full Year YTD Net Income $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 12.5 $ 10.0 $ 9.1 Excluding: Interest income and expense, net (0.8 ) (1.0 ) (1.1 ) (1.3 ) (1.3 ) (1.3 ) (1.5 ) (0.7 ) (4.1 ) (4.2 ) Provision for income taxes 0.4 0.9 0.9 (0.5 ) 0.5 1.2 0.8 2.6 1.7 2.4 Depreciation and amortization 0.9 0.9 0.9 1.1 1.1 1.1 1.3 3.6 3.9 3.5 Stock-based compensation 0.9 1.2 1.1 1.1 1.3 1.6 1.7 2.7 4.2 4.6 (Gain) loss on currency exchange — — 0.3 0.2 — 0.1 — 0.2 0.5 — Impairment of other intangibles — — — 0.5 — — — — 0.5 — Change in value of contingent consideration — — — 0.7 (0.1 ) 0.4 (0.6 ) 0.3 0.7 (0.3 ) Mergers & Acquisitions expense 0.3 0.1 0.4 2.5 — — 0.9 0.3 3.3 0.9 Adjusted EBITDA $ 3.0 $ 6.2 $ 6.5 $ 4.9 $ 3.4 $ 7.1 $ 5.7 $ 21.5 $ 20.6 $ 16.2 *Numbers may not add due to rounding SIMULATIONS PLUS, INC. Reconciliation of Adjusted Diluted EPS to Diluted EPS* (Unaudited) (in millions, except Diluted EPS and Adjusted Diluted EPS) FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year Full Year YTD Net Income (GAAP) $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 12.5 $ 10.0 $ 9.1 Excluding: Mergers & Acquisitions expense 0.3 0.1 0.4 0.9 — — 0.9 0.3 1.7 0.9 Immunetrics transaction costs — — — 2.3 — — — — 2.3 — Cognigen trade name write-off — — — 0.5 — — — — 0.5 — Tax effect on above adjustments (0.1 ) — (0.1 ) (0.5 ) — — (0.2 ) (0.1 ) (0.7 ) (0.2 ) Adjusted Net income (Non-GAAP) $ 1.5 $ 4.2 $ 4.3 $ 3.7 $ 1.9 $ 4.0 $ 3.9 $ 12.8 $ 13.8 $ 9.9 Weighted-average common shares outstanding: Diluted 20.8 20.5 20.4 20.4 20.3 20.3 20.4 20.7 20.5 20.3 Diluted EPS (GAAP) $ 0.06 $ 0.20 $ 0.20 $ 0.03 $ 0.10 $ 0.20 $ 0.15 $ 0.60 $ 0.49 $ 0.45 Adjusted Diluted EPS (Non-GAAP) $ 0.07 $ 0.21 $ 0.21 $ 0.18 $ 0.10 $ 0.20 $ 0.19 $ 0.61 $ 0.67 $ 0.49 *Numbers may not add due to rounding View source version on businesswire.com: https://www.businesswire.com/news/home/20240702400408/en/Contacts Investor Relations Contacts: Lisa Fortuna Financial Profiles 310-622-8251 slp@finprofiles.com Renee Bouche Simulations Plus Investor Relations 661-723-7723 renee.bouche@simulations-plus.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Simulations Plus Reports Third Quarter Fiscal 2024 Financial Results By: Simulations Plus, Inc. via Business Wire July 02, 2024 at 16:06 PM EDT Total revenue of $18.5 million and diluted earnings per share (EPS) of $0.15 Maintains full-year revenue guidance of $69 to $72 million and updates EPS guidance Simulations Plus, Inc. (Nasdaq: SLP) (“Simulations Plus”), a leading provider of biosimulation, simulation-enabled performance and intelligence solutions, and medical communications for the biopharma industry, today reported financial results for its third quarter fiscal 2024, ended May 31, 2024. Third Quarter 2024 Financial Highlights (compared to third quarter 2023) Total revenue increased 14% to $18.5 million Software revenue increased 12% to $11.9 million, representing 64% of total revenue Services revenue increased 18% to $6.6 million, representing 36% of total revenue Gross profit was constant at $13.3 million; gross margin was 71% Adjusted EBITDA of $5.7 million, representing 31% of total revenue Net income of $3.1 million and diluted earnings per share (EPS) of $0.15 versus net income of $4.0 million and diluted EPS of $0.20 Adjusted diluted EPS excluding the impact of acquisition costs of $0.19 versus adjusted diluted EPS of $0.21 Nine Months 2024 Financial Highlights (compared to nine months 2023) Total revenue increased 17% to $51.3 million Software revenue increased 14% to $31.1 million, representing 61% of total revenue Services revenue increased 21% to $20.2 million, representing 39% of total revenue Gross profit increased 2% to $36.3 million; gross margin was 71% Adjusted EBITDA of $16.2 million, representing 32% of total revenue Net income of $9.1 million and diluted EPS of $0.45 versus net income of $9.4 million and diluted EPS of $0.46 Adjusted diluted EPS excluding the impact of acquisition costs was constant at of $0.49 Management Commentary “Our third quarter results reflected continued solid performance in both our software and services segments,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Total revenue increased 14%, led by higher software sales in our Cheminformatics and Clinical Pharmacology & Pharmacometrics (CPP) business units, with strong growth in our ADMET Predictor® and MonolixSuite™ platforms, respectively. Our Physiologically Based Pharmacokinetics (PBPK) business unit also performed well, reflecting higher revenues from GastroPlus®. During the quarter, we were excited to launch GastroPlus X, the next generation of physiologically based pharmacokinetics/biopharmaceutics (PBPK/PBBM) modeling and simulation software and believe it will become a meaningful addition to our suite of leading-edge solutions. The 18% increase in services revenue was driven by strong growth in our Quantitative Systems Pharmacology (QSP) and CPP business units. “Biotech funding is starting to show signs of recovery, most notably for companies that have drug candidates in the clinic. We continue to be cautiously optimistic about the funding environment for our biotech clients. We see a range of spending patterns among large pharmaceutical companies. Some are increasing expenditures, while others remain conservative, with most falling in between depending on various internal and external market factors. Overall, the market is in a better position today compared to a year ago. “Our acquisition of Pro-ficiency on June 11th brings together our collective expertise in simulations, AI technologies and focus on science, creating a one-of-a-kind platform that spans across the drug development continuum. The Pro-ficiency integration and collaboration is progressing in-line with our internal plan and schedule with positive responses from our clients. “Our performance in the first nine months of the year remains aligned with our original fiscal 2024 revenue guidance. The newly formed Clinical Simulations and Medical Communications (CSMC) business unit is expected to contribute approximately $3 million to our fiscal 2024 revenue. We are entering our final fiscal quarter of 2024 with a healthy pipeline and remain confident that Simulations Plus is well positioned to achieve its goals for the fiscal year. Going forward, we remain committed to a disciplined growth strategy that will deliver long-term returns for our shareholders.” Fiscal 2024 Guidance Fiscal 2024 Guidance Revenue $69M - $72M Revenue growth 15 - 20% Software mix 55 - 60% Services mix 40 - 45% Diluted EPS $0.46 - $0.48 Adjusted diluted EPS $0.54 - $0.56 Quarterly Dividend The Simulations Plus Board of Directors has determined to discontinue the Company’s quarterly cash dividend and reallocate these funds to our capital allocation strategy for investing in growth initiatives that are intended to generate long-term shareholder value. The final dividend of $0.06 per share of the Company’s common stock will be paid on August 5, 2024, to shareholders of record as of July 29, 2024. 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 2023 ESG update. 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 the Company’s 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 will be available on our website on the investor relations page of the Simulations Plus website at www.simulations-plus.com/investorscorporate-profile/corporate-profile/. A replay of the webcast will be available on the website approximately one hour following the call. Non-GAAP Definitions Adjusted EBITDA Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, (gain) loss on currency exchange, any acquisition- or financial-transaction-related expenses, and any asset impairment charges. Currency exchange excluded represents the exchange rate fluctuations on the foreign currency denominated transactions. The impact of transactions in foreign currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency. 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 represents a measure that we believe is 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 Adjusted EBITDA is useful in evaluating our core operating results. However, Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income or operating income as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity. The Company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to nonrecurring, unusual items. Adjusted Diluted EPS Adjusted diluted EPS is calculated based on net income excluding the impact of any acquisition- or financial-transaction-related expenses, any asset impairment charges, and tax provisions / benefits related to the previous items. 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 periods. The Company believes that the use of non-GAAP measures helps investors to gain a better understanding of the Company’s core operating results and future prospects, consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts. About Simulations Plus 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, 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. 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,” “expect,” and “anticipate” 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. Factors that could cause or contribute to such differences include, but are not limited to: our ability to successfully integrate the Pro-ficiency business with our own, as well as expenses we may incur in connection therewith, 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, 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 and annual reports and filed with the U.S. Securities and Exchange Commission. SIMULATIONS PLUS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended (in thousands, except per common share amounts) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Revenues Software $ 11,908 $ 10,632 $ 31,111 $ 27,193 Services 6,636 5,602 20,238 16,755 Total revenues 18,544 16,234 51,349 43,948 Cost of revenues Software 1,400 908 3,739 2,636 Services 3,887 2,053 11,284 5,616 Total cost of revenues 5,287 2,961 15,023 8,252 Gross profit 13,257 13,273 36,326 35,696 Operating expenses Research and development 1,300 945 3,829 3,428 Sales and marketing 2,399 1,683 6,337 4,898 General and administrative 7,678 6,548 18,878 18,361 Total operating expenses 11,377 9,176 29,044 26,687 Income from operations 1,880 4,097 7,282 9,009 Other income 2,010 843 4,266 2,617 Income before income taxes 3,890 4,940 11,548 11,626 Provision for income taxes (753 ) (932 ) (2,437 ) (2,199 ) Net income $ 3,137 $ 4,008 $ 9,111 $ 9,427 Earnings per share Basic $ 0.16 $ 0.20 $ 0.46 $ 0.47 Diluted $ 0.15 $ 0.20 $ 0.45 $ 0.46 Weighted-average common shares outstanding Basic 19,995 19,972 19,972 20,123 Diluted 20,433 20,355 20,324 20,512 Other comprehensive (loss) income, net of tax Foreign currency translation adjustments (56 ) 144 (125 ) 174 Unrealized losses on available-for-sale securities $ (39 ) $ — $ (39 ) $ — Comprehensive income $ 3,042 $ 4,152 $ 8,947 $ 9,601 SIMULATIONS PLUS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) (in thousands, except share and per share amounts) May 31, 2024 August 31, 2023 ASSETS Current assets Cash and cash equivalents $ 109,092 $ 57,523 Accounts receivable, net of allowance for credit losses of $149 and $46 10,144 10,201 Prepaid income taxes 1,202 804 Prepaid expenses and other current assets 5,303 3,904 Short-term investments 9,875 57,940 Total current assets 135,616 130,372 Long-term assets Capitalized computer software development costs, net of accumulated amortization of $18,502 and $17,199 12,614 11,335 Property and equipment, net 882 671 Operating lease right-of-use assets 948 1,247 Intellectual property, net of accumulated amortization of $10,498 and $9,301 7,492 8,689 Other intangible assets, net of accumulated amortization of $2,862 and $2,107 12,712 12,825 Goodwill 19,099 19,099 Deferred tax assets 2,804 1,438 Other assets 524 425 Total assets $ 192,691 $ 186,101 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 658 $ 144 Accrued compensation 4,111 4,392 Accrued expenses 894 659 Contracts payable 3,810 3,250 Operating lease liability - current portion 410 442 Deferred revenue 1,437 3,100 Total current liabilities 11,320 11,987 Long-term liabilities Operating lease liability 512 755 Contracts payable – net of current portion — 3,330 Total liabilities 11,832 16,072 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; 20,007,488 and 19,937,961 shares issued and outstanding 150,451 144,974 Retained earnings 30,713 25,196 Accumulated other comprehensive loss (305 ) (141 ) Total shareholders' equity 180,859 170,029 Total liabilities and shareholders' equity $ 192,691 $ 186,101 SIMULATIONS PLUS, INC. Trended Financial Information* (Unaudited) (in millions except earnings per share amounts) FY 2023 FY 2024 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year YTD Revenue Software $ 6.1 $ 10.5 $ 10.6 $ 9.3 $ 7.6 $ 11.6 $ 11.9 $ 36.5 $ 31.1 Services $ 5.9 $ 5.3 $ 5.6 $ 6.3 $ 6.9 $ 6.7 $ 6.6 $ 23.1 $ 20.2 Total $ 12.0 $ 15.8 $ 16.2 $ 15.6 $ 14.5 $ 18.3 $ 18.5 $ 59.6 $ 51.3 Gross Margin Software 85.4 % 92.0 % 91.5 % 89.4 % 86.9 % 88.4 % 88.2 % 90.1 % 88.0 % Services 69.7 % 66.2 % 63.4 % 62.1 % 47.0 % 44.2 % 41.4 % 65.3 % 44.2 % Total 77.7 % 83.4 % 81.8 % 78.4 % 67.9 % 72.2 % 71.5 % 80.5 % 70.7 % Income from operations $ 0.9 $ 4.0 $ 4.1 $ (0.3 ) $ 1.0 $ 4.4 $ 1.9 $ 8.7 $ 7.3 Operating Margin 7.3 % 25.6 % 25.2 % -1.8 % 6.6 % 24.3 % 10.1 % 14.6 % 14.2 % Net Income $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 10.0 $ 9.1 Diluted Earnings Per Share $ 0.06 $ 0.20 $ 0.20 $ 0.03 $ 0.10 $ 0.20 $ 0.15 $ 0.49 $ 0.45 Adjusted EBITDA $ 3.0 $ 6.2 $ 6.5 $ 4.9 $ 3.4 $ 7.1 $ 5.7 $ 20.6 $ 16.2 Adjusted Diluted EPS $ 0.07 $ 0.21 $ 0.21 $ 0.18 $ 0.10 $ 0.20 $ 0.19 $ 0.67 $ 0.10 Cash Flow from Operations $ 4.7 $ 5.5 $ 8.5 $ 3.1 $ 0.2 $ 5.8 $ 5.7 $ 21.9 $ 11.7 Revenue Breakdown by Region Americas $ 8.5 $ 10.6 $ 10.8 $ 11.0 $ 10.9 $ 12.5 $ 12.4 $ 40.8 $ 35.8 EMEA 2.1 3.6 3.4 2.6 2.3 4.7 4.5 11.7 11.5 Asia Pacific 1.3 1.5 2.1 2.1 1.3 1.2 1.6 7.0 4.1 Total $ 12.0 $ 15.8 $ 16.2 $ 15.6 $ 14.5 $ 18.3 $ 18.5 $ 59.6 $ 51.3 Software Performance Metrics Average Revenue per Customer (in thousands) Commercial $ 68.0 $ 110.0 $ 97.0 88.0 $ 79.0 $ 113.0 $ 97.0 Services Performance Metrics Backlog (in millions) $ 15.8 $ 15.4 $ 15.7 $ 19.5 $ 18.9 $ 18.0 $ 19.6 *Numbers may not add due to rounding SIMULATIONS PLUS, INC. Reconciliation of Adjusted EBITDA to Net Income* (Unaudited) (in millions) FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year Full Year YTD Net Income $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 12.5 $ 10.0 $ 9.1 Excluding: Interest income and expense, net (0.8 ) (1.0 ) (1.1 ) (1.3 ) (1.3 ) (1.3 ) (1.5 ) (0.7 ) (4.1 ) (4.2 ) Provision for income taxes 0.4 0.9 0.9 (0.5 ) 0.5 1.2 0.8 2.6 1.7 2.4 Depreciation and amortization 0.9 0.9 0.9 1.1 1.1 1.1 1.3 3.6 3.9 3.5 Stock-based compensation 0.9 1.2 1.1 1.1 1.3 1.6 1.7 2.7 4.2 4.6 (Gain) loss on currency exchange — — 0.3 0.2 — 0.1 — 0.2 0.5 — Impairment of other intangibles — — — 0.5 — — — — 0.5 — Change in value of contingent consideration — — — 0.7 (0.1 ) 0.4 (0.6 ) 0.3 0.7 (0.3 ) Mergers & Acquisitions expense 0.3 0.1 0.4 2.5 — — 0.9 0.3 3.3 0.9 Adjusted EBITDA $ 3.0 $ 6.2 $ 6.5 $ 4.9 $ 3.4 $ 7.1 $ 5.7 $ 21.5 $ 20.6 $ 16.2 *Numbers may not add due to rounding SIMULATIONS PLUS, INC. Reconciliation of Adjusted Diluted EPS to Diluted EPS* (Unaudited) (in millions, except Diluted EPS and Adjusted Diluted EPS) FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year Full Year YTD Net Income (GAAP) $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 12.5 $ 10.0 $ 9.1 Excluding: Mergers & Acquisitions expense 0.3 0.1 0.4 0.9 — — 0.9 0.3 1.7 0.9 Immunetrics transaction costs — — — 2.3 — — — — 2.3 — Cognigen trade name write-off — — — 0.5 — — — — 0.5 — Tax effect on above adjustments (0.1 ) — (0.1 ) (0.5 ) — — (0.2 ) (0.1 ) (0.7 ) (0.2 ) Adjusted Net income (Non-GAAP) $ 1.5 $ 4.2 $ 4.3 $ 3.7 $ 1.9 $ 4.0 $ 3.9 $ 12.8 $ 13.8 $ 9.9 Weighted-average common shares outstanding: Diluted 20.8 20.5 20.4 20.4 20.3 20.3 20.4 20.7 20.5 20.3 Diluted EPS (GAAP) $ 0.06 $ 0.20 $ 0.20 $ 0.03 $ 0.10 $ 0.20 $ 0.15 $ 0.60 $ 0.49 $ 0.45 Adjusted Diluted EPS (Non-GAAP) $ 0.07 $ 0.21 $ 0.21 $ 0.18 $ 0.10 $ 0.20 $ 0.19 $ 0.61 $ 0.67 $ 0.49 *Numbers may not add due to rounding View source version on businesswire.com: https://www.businesswire.com/news/home/20240702400408/en/Contacts Investor Relations Contacts: Lisa Fortuna Financial Profiles 310-622-8251 slp@finprofiles.com Renee Bouche Simulations Plus Investor Relations 661-723-7723 renee.bouche@simulations-plus.com
Total revenue of $18.5 million and diluted earnings per share (EPS) of $0.15 Maintains full-year revenue guidance of $69 to $72 million and updates EPS guidance
Simulations Plus, Inc. (Nasdaq: SLP) (“Simulations Plus”), a leading provider of biosimulation, simulation-enabled performance and intelligence solutions, and medical communications for the biopharma industry, today reported financial results for its third quarter fiscal 2024, ended May 31, 2024. Third Quarter 2024 Financial Highlights (compared to third quarter 2023) Total revenue increased 14% to $18.5 million Software revenue increased 12% to $11.9 million, representing 64% of total revenue Services revenue increased 18% to $6.6 million, representing 36% of total revenue Gross profit was constant at $13.3 million; gross margin was 71% Adjusted EBITDA of $5.7 million, representing 31% of total revenue Net income of $3.1 million and diluted earnings per share (EPS) of $0.15 versus net income of $4.0 million and diluted EPS of $0.20 Adjusted diluted EPS excluding the impact of acquisition costs of $0.19 versus adjusted diluted EPS of $0.21 Nine Months 2024 Financial Highlights (compared to nine months 2023) Total revenue increased 17% to $51.3 million Software revenue increased 14% to $31.1 million, representing 61% of total revenue Services revenue increased 21% to $20.2 million, representing 39% of total revenue Gross profit increased 2% to $36.3 million; gross margin was 71% Adjusted EBITDA of $16.2 million, representing 32% of total revenue Net income of $9.1 million and diluted EPS of $0.45 versus net income of $9.4 million and diluted EPS of $0.46 Adjusted diluted EPS excluding the impact of acquisition costs was constant at of $0.49 Management Commentary “Our third quarter results reflected continued solid performance in both our software and services segments,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Total revenue increased 14%, led by higher software sales in our Cheminformatics and Clinical Pharmacology & Pharmacometrics (CPP) business units, with strong growth in our ADMET Predictor® and MonolixSuite™ platforms, respectively. Our Physiologically Based Pharmacokinetics (PBPK) business unit also performed well, reflecting higher revenues from GastroPlus®. During the quarter, we were excited to launch GastroPlus X, the next generation of physiologically based pharmacokinetics/biopharmaceutics (PBPK/PBBM) modeling and simulation software and believe it will become a meaningful addition to our suite of leading-edge solutions. The 18% increase in services revenue was driven by strong growth in our Quantitative Systems Pharmacology (QSP) and CPP business units. “Biotech funding is starting to show signs of recovery, most notably for companies that have drug candidates in the clinic. We continue to be cautiously optimistic about the funding environment for our biotech clients. We see a range of spending patterns among large pharmaceutical companies. Some are increasing expenditures, while others remain conservative, with most falling in between depending on various internal and external market factors. Overall, the market is in a better position today compared to a year ago. “Our acquisition of Pro-ficiency on June 11th brings together our collective expertise in simulations, AI technologies and focus on science, creating a one-of-a-kind platform that spans across the drug development continuum. The Pro-ficiency integration and collaboration is progressing in-line with our internal plan and schedule with positive responses from our clients. “Our performance in the first nine months of the year remains aligned with our original fiscal 2024 revenue guidance. The newly formed Clinical Simulations and Medical Communications (CSMC) business unit is expected to contribute approximately $3 million to our fiscal 2024 revenue. We are entering our final fiscal quarter of 2024 with a healthy pipeline and remain confident that Simulations Plus is well positioned to achieve its goals for the fiscal year. Going forward, we remain committed to a disciplined growth strategy that will deliver long-term returns for our shareholders.” Fiscal 2024 Guidance Fiscal 2024 Guidance Revenue $69M - $72M Revenue growth 15 - 20% Software mix 55 - 60% Services mix 40 - 45% Diluted EPS $0.46 - $0.48 Adjusted diluted EPS $0.54 - $0.56 Quarterly Dividend The Simulations Plus Board of Directors has determined to discontinue the Company’s quarterly cash dividend and reallocate these funds to our capital allocation strategy for investing in growth initiatives that are intended to generate long-term shareholder value. The final dividend of $0.06 per share of the Company’s common stock will be paid on August 5, 2024, to shareholders of record as of July 29, 2024. 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 2023 ESG update. 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 the Company’s 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 will be available on our website on the investor relations page of the Simulations Plus website at www.simulations-plus.com/investorscorporate-profile/corporate-profile/. A replay of the webcast will be available on the website approximately one hour following the call. Non-GAAP Definitions Adjusted EBITDA Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, (gain) loss on currency exchange, any acquisition- or financial-transaction-related expenses, and any asset impairment charges. Currency exchange excluded represents the exchange rate fluctuations on the foreign currency denominated transactions. The impact of transactions in foreign currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency. 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 represents a measure that we believe is 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 Adjusted EBITDA is useful in evaluating our core operating results. However, Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income or operating income as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity. The Company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to nonrecurring, unusual items. Adjusted Diluted EPS Adjusted diluted EPS is calculated based on net income excluding the impact of any acquisition- or financial-transaction-related expenses, any asset impairment charges, and tax provisions / benefits related to the previous items. 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 periods. The Company believes that the use of non-GAAP measures helps investors to gain a better understanding of the Company’s core operating results and future prospects, consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts. About Simulations Plus 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, 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. 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,” “expect,” and “anticipate” 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. Factors that could cause or contribute to such differences include, but are not limited to: our ability to successfully integrate the Pro-ficiency business with our own, as well as expenses we may incur in connection therewith, 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, 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 and annual reports and filed with the U.S. Securities and Exchange Commission. SIMULATIONS PLUS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended (in thousands, except per common share amounts) May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Revenues Software $ 11,908 $ 10,632 $ 31,111 $ 27,193 Services 6,636 5,602 20,238 16,755 Total revenues 18,544 16,234 51,349 43,948 Cost of revenues Software 1,400 908 3,739 2,636 Services 3,887 2,053 11,284 5,616 Total cost of revenues 5,287 2,961 15,023 8,252 Gross profit 13,257 13,273 36,326 35,696 Operating expenses Research and development 1,300 945 3,829 3,428 Sales and marketing 2,399 1,683 6,337 4,898 General and administrative 7,678 6,548 18,878 18,361 Total operating expenses 11,377 9,176 29,044 26,687 Income from operations 1,880 4,097 7,282 9,009 Other income 2,010 843 4,266 2,617 Income before income taxes 3,890 4,940 11,548 11,626 Provision for income taxes (753 ) (932 ) (2,437 ) (2,199 ) Net income $ 3,137 $ 4,008 $ 9,111 $ 9,427 Earnings per share Basic $ 0.16 $ 0.20 $ 0.46 $ 0.47 Diluted $ 0.15 $ 0.20 $ 0.45 $ 0.46 Weighted-average common shares outstanding Basic 19,995 19,972 19,972 20,123 Diluted 20,433 20,355 20,324 20,512 Other comprehensive (loss) income, net of tax Foreign currency translation adjustments (56 ) 144 (125 ) 174 Unrealized losses on available-for-sale securities $ (39 ) $ — $ (39 ) $ — Comprehensive income $ 3,042 $ 4,152 $ 8,947 $ 9,601 SIMULATIONS PLUS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) (in thousands, except share and per share amounts) May 31, 2024 August 31, 2023 ASSETS Current assets Cash and cash equivalents $ 109,092 $ 57,523 Accounts receivable, net of allowance for credit losses of $149 and $46 10,144 10,201 Prepaid income taxes 1,202 804 Prepaid expenses and other current assets 5,303 3,904 Short-term investments 9,875 57,940 Total current assets 135,616 130,372 Long-term assets Capitalized computer software development costs, net of accumulated amortization of $18,502 and $17,199 12,614 11,335 Property and equipment, net 882 671 Operating lease right-of-use assets 948 1,247 Intellectual property, net of accumulated amortization of $10,498 and $9,301 7,492 8,689 Other intangible assets, net of accumulated amortization of $2,862 and $2,107 12,712 12,825 Goodwill 19,099 19,099 Deferred tax assets 2,804 1,438 Other assets 524 425 Total assets $ 192,691 $ 186,101 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 658 $ 144 Accrued compensation 4,111 4,392 Accrued expenses 894 659 Contracts payable 3,810 3,250 Operating lease liability - current portion 410 442 Deferred revenue 1,437 3,100 Total current liabilities 11,320 11,987 Long-term liabilities Operating lease liability 512 755 Contracts payable – net of current portion — 3,330 Total liabilities 11,832 16,072 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; 20,007,488 and 19,937,961 shares issued and outstanding 150,451 144,974 Retained earnings 30,713 25,196 Accumulated other comprehensive loss (305 ) (141 ) Total shareholders' equity 180,859 170,029 Total liabilities and shareholders' equity $ 192,691 $ 186,101 SIMULATIONS PLUS, INC. Trended Financial Information* (Unaudited) (in millions except earnings per share amounts) FY 2023 FY 2024 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year YTD Revenue Software $ 6.1 $ 10.5 $ 10.6 $ 9.3 $ 7.6 $ 11.6 $ 11.9 $ 36.5 $ 31.1 Services $ 5.9 $ 5.3 $ 5.6 $ 6.3 $ 6.9 $ 6.7 $ 6.6 $ 23.1 $ 20.2 Total $ 12.0 $ 15.8 $ 16.2 $ 15.6 $ 14.5 $ 18.3 $ 18.5 $ 59.6 $ 51.3 Gross Margin Software 85.4 % 92.0 % 91.5 % 89.4 % 86.9 % 88.4 % 88.2 % 90.1 % 88.0 % Services 69.7 % 66.2 % 63.4 % 62.1 % 47.0 % 44.2 % 41.4 % 65.3 % 44.2 % Total 77.7 % 83.4 % 81.8 % 78.4 % 67.9 % 72.2 % 71.5 % 80.5 % 70.7 % Income from operations $ 0.9 $ 4.0 $ 4.1 $ (0.3 ) $ 1.0 $ 4.4 $ 1.9 $ 8.7 $ 7.3 Operating Margin 7.3 % 25.6 % 25.2 % -1.8 % 6.6 % 24.3 % 10.1 % 14.6 % 14.2 % Net Income $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 10.0 $ 9.1 Diluted Earnings Per Share $ 0.06 $ 0.20 $ 0.20 $ 0.03 $ 0.10 $ 0.20 $ 0.15 $ 0.49 $ 0.45 Adjusted EBITDA $ 3.0 $ 6.2 $ 6.5 $ 4.9 $ 3.4 $ 7.1 $ 5.7 $ 20.6 $ 16.2 Adjusted Diluted EPS $ 0.07 $ 0.21 $ 0.21 $ 0.18 $ 0.10 $ 0.20 $ 0.19 $ 0.67 $ 0.10 Cash Flow from Operations $ 4.7 $ 5.5 $ 8.5 $ 3.1 $ 0.2 $ 5.8 $ 5.7 $ 21.9 $ 11.7 Revenue Breakdown by Region Americas $ 8.5 $ 10.6 $ 10.8 $ 11.0 $ 10.9 $ 12.5 $ 12.4 $ 40.8 $ 35.8 EMEA 2.1 3.6 3.4 2.6 2.3 4.7 4.5 11.7 11.5 Asia Pacific 1.3 1.5 2.1 2.1 1.3 1.2 1.6 7.0 4.1 Total $ 12.0 $ 15.8 $ 16.2 $ 15.6 $ 14.5 $ 18.3 $ 18.5 $ 59.6 $ 51.3 Software Performance Metrics Average Revenue per Customer (in thousands) Commercial $ 68.0 $ 110.0 $ 97.0 88.0 $ 79.0 $ 113.0 $ 97.0 Services Performance Metrics Backlog (in millions) $ 15.8 $ 15.4 $ 15.7 $ 19.5 $ 18.9 $ 18.0 $ 19.6 *Numbers may not add due to rounding SIMULATIONS PLUS, INC. Reconciliation of Adjusted EBITDA to Net Income* (Unaudited) (in millions) FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year Full Year YTD Net Income $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 12.5 $ 10.0 $ 9.1 Excluding: Interest income and expense, net (0.8 ) (1.0 ) (1.1 ) (1.3 ) (1.3 ) (1.3 ) (1.5 ) (0.7 ) (4.1 ) (4.2 ) Provision for income taxes 0.4 0.9 0.9 (0.5 ) 0.5 1.2 0.8 2.6 1.7 2.4 Depreciation and amortization 0.9 0.9 0.9 1.1 1.1 1.1 1.3 3.6 3.9 3.5 Stock-based compensation 0.9 1.2 1.1 1.1 1.3 1.6 1.7 2.7 4.2 4.6 (Gain) loss on currency exchange — — 0.3 0.2 — 0.1 — 0.2 0.5 — Impairment of other intangibles — — — 0.5 — — — — 0.5 — Change in value of contingent consideration — — — 0.7 (0.1 ) 0.4 (0.6 ) 0.3 0.7 (0.3 ) Mergers & Acquisitions expense 0.3 0.1 0.4 2.5 — — 0.9 0.3 3.3 0.9 Adjusted EBITDA $ 3.0 $ 6.2 $ 6.5 $ 4.9 $ 3.4 $ 7.1 $ 5.7 $ 21.5 $ 20.6 $ 16.2 *Numbers may not add due to rounding SIMULATIONS PLUS, INC. Reconciliation of Adjusted Diluted EPS to Diluted EPS* (Unaudited) (in millions, except Diluted EPS and Adjusted Diluted EPS) FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Full Year Full Year YTD Net Income (GAAP) $ 1.2 $ 4.2 $ 4.0 $ 0.5 $ 1.9 $ 4.0 $ 3.1 $ 12.5 $ 10.0 $ 9.1 Excluding: Mergers & Acquisitions expense 0.3 0.1 0.4 0.9 — — 0.9 0.3 1.7 0.9 Immunetrics transaction costs — — — 2.3 — — — — 2.3 — Cognigen trade name write-off — — — 0.5 — — — — 0.5 — Tax effect on above adjustments (0.1 ) — (0.1 ) (0.5 ) — — (0.2 ) (0.1 ) (0.7 ) (0.2 ) Adjusted Net income (Non-GAAP) $ 1.5 $ 4.2 $ 4.3 $ 3.7 $ 1.9 $ 4.0 $ 3.9 $ 12.8 $ 13.8 $ 9.9 Weighted-average common shares outstanding: Diluted 20.8 20.5 20.4 20.4 20.3 20.3 20.4 20.7 20.5 20.3 Diluted EPS (GAAP) $ 0.06 $ 0.20 $ 0.20 $ 0.03 $ 0.10 $ 0.20 $ 0.15 $ 0.60 $ 0.49 $ 0.45 Adjusted Diluted EPS (Non-GAAP) $ 0.07 $ 0.21 $ 0.21 $ 0.18 $ 0.10 $ 0.20 $ 0.19 $ 0.61 $ 0.67 $ 0.49 *Numbers may not add due to rounding View source version on businesswire.com: https://www.businesswire.com/news/home/20240702400408/en/
Investor Relations Contacts: Lisa Fortuna Financial Profiles 310-622-8251 slp@finprofiles.com Renee Bouche Simulations Plus Investor Relations 661-723-7723 renee.bouche@simulations-plus.com