Simulations Plus, Inc. SLP reported fourth-quarter fiscal 2024 adjusted earnings (excluding the impact of acquisition costs) of 6 cents per share, which declined 66.7% year over year. The figure, however, beat the Zacks Consensus Estimate of 4 cents per share.
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Quarterly revenues jumped 19% year over year to $18.7 million due to higher software and services revenues in the Clinical Pharmacology & Pharmacometrics (CPP), higher software revenues in the Cheminformatics business units and higher service sales in the Quantitative Systems Pharmacology (QSP) unit. Continued strength across the company’s core platforms, including GastroPlus, MonolixSuite and ADMET Predictor, contributed to the growth. It, however, missed the Zacks Consensus Estimate of $19.7 million.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote
SLP’s organic revenue growth during the quarter was 14%, eliminating the $2.3 million contribution from Pro-ficiency, which was acquired in June. For 2024, the company generated revenues of $70 million, up 18% year over year, driven by momentum across all business units.
In response to the results, SLP’s shares jumped 8.9% in the pre-market trading on Oct. 24. Shares of the company have lost 14.7% against the sub-industry’s growth of 29.4%.
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Quarter in Details
Fiscal fourth-quarter revenues from Software (53% of total quarterly revenues) rose 6% year over year to $9.9 million, driven by new customer wins and increasing sales with existing customers of GastroPlus, MonolixSuite and ADMET Predictor offerings. GastroPlus, MonolixSuite, ADMET Predictor and Others contributed 49%, 17%, 18% and 15%, respectively to total software revenues.
The renewal rate for commercial customers came in at 87% (based upon fees) and 79% (based on accounts) compared with 85% and 80% in the prior quarter, respectively.
Services’ revenues (47%) improved 39% to $8.8 million, driven by steady growth in QSP and CPP business units. QSP and CPP sales saw an increase of 32% and 28% year over year, respectively. Sales of PBPK unit was down 6% as the temporary delays in acquiring client source data deferred the initiation of contracted projects.
Services’ backlog was $14.1 million at the end of the reported quarter, down 27.7% year over year.
Operating Details
The gross margin in the quarter under review was 37% compared with 78.4% in the prior-year quarter. The Software segment’s gross margin was 72.4% compared with 89.4% in the prior-year quarter. Services’ gross margin was (4)%, down from 62.1%.
Total operating expenses, as a percentage of revenues, were 43% compared with 80% a year ago.
Loss from operations was $1.2 million compared with $3,00,000 a year ago. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin came in at 22%, a decrease from 31% prior-year quarter.
Balance Sheet
As of Aug. 31, 2024, cash and short-term investments were $20.3 million compared with $115.5 million in the prior-year period.
Fiscal 2025 Outlook
Simulations Plus expects revenues to be between $90 million and $93 million. This suggests an increase of 28-33% from fiscal 2024 revenues.
The company anticipates continued revenue growth, with organic growth projected between 10% and 15%. In addition, the Pro-ficiency acquisition is expected to contribute an additional $15 million to $18 million to revenues, further boosting the company’s financial outlook.
The company projects the Software segment to grow in the 55-60% band. 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 #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
BlackBerry BB reported breakeven second-quarter fiscal 2025 earnings, better than the company’s estimate of a loss per share of 2-4 cents. In the year-ago quarter, it reported a non-GAAP loss per share of 4 cents. The Zacks Consensus Estimate was pegged at a loss of 3 cents per share.
Shares of BB have lost 23% in the past year.
Badger Meter, Inc. BMI reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 88 cents.
Shares of BMI have gained 50.5% in the past year.
America Movil AMX reported net income per ADR of 11 cents for the third quarter of 2024, up from 4 cents in the prior-year quarter.
Shares of AMX have gained 3.7% in the past year.
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