LANCASTER, Calif.–(BUSINESS WIRE)–Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation software and services for pharmaceutical safety and efficacy, today reported financial results for its second quarter of fiscal 2022, ended February 28, 2022.
“We generated solid revenue growth, improved margins and strong EPS growth during the second quarter, demonstrating the health of our business and the operating leverage in our model,” said Shawn O’Connor, chief executive officer of Simulations Plus. “Our software business continued its rapid expansion and our services business generated strong bookings and backlog growth with a large pipeline of opportunities.”
“We delivered double-digit revenue increases across our three major software platforms as a result of our increased upsell efforts and the addition of 18 new customers,” added Mr. O’Connor. “MonolixSuite® revenue was especially strong, with 43% growth, and is now our second-highest selling software product. The 25% growth in our software business offset the 5% decline in our services business this quarter and software revenue is now contributing over 60% of our revenue. The results represent an encouraging first half of the fiscal year and demonstrate that we are on-pace to achieve our full-year goals.”
Second Quarter Fiscal 2022 Financial Highlights (compared with the corresponding period last fiscal year):
- Total revenue increased 13% to $14.8 million;
- Software revenue increased 25% to $9.8 million, representing 66% of total revenue;
- Services revenue declined 5% to $5.0 million, representing 34% of total revenue;
- Gross profit increased 17% to $12.0 million; gross margin was 81%;
- Net income and diluted EPS of $4.4 million and $0.21 compared to $3.2 million and $0.15, respectively;
- Adjusted EBITDA of $7.2 million, representing 48% of total revenue.
YTD Financial Highlights (compared with the corresponding period last fiscal year):
- Total revenue increased 14% to $27.2 million;
- Software revenue increased 23% to $17.1 million, representing 63% of total revenue;
- Services revenue increased 2% to $10.1 million, representing 37% of total revenue;
- Gross profit increased 17% to $21.6 million; gross margin was 79%;
- Net income and diluted EPS of $7.4 million and $0.36 compared to $5.7 million and $0.27, respectively;
- Adjusted EBITDA of $12.4 million, representing 46% of total revenue.
Mr. O’Connor concluded, “Our performance was in line with our guidance during the first half of fiscal 2022. As we look to the second half of the year, we expect our software business to continue to deliver strong performance, combined with improved results in our services business. As a result, we remain confident in achieving our 10-15% revenue guidance for the full-year driven by a positive mix shift towards our higher-margin software offerings.”
The company’s Board of Directors declared a cash dividend of $0.06 per share of the company’s common stock, payable on May 2, 2022, to shareholders of record as of April 25, 2022. The declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements, and other factors.
Environmental, Social, and Governance (ESG)
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 ESG Report.
Webcast and Conference Call Details
Shawn O’Connor, chief executive officer, and Will Frederick, chief financial officer, will host a conference call and webcast today at 5 p.m. Eastern Time to discuss details of the company’s performance for the quarter and certain forward-looking information. The call may be accessed by registering here or by dialing 1-201-389-0879. The webcast will be available on our website under Conference Calls & Presentations. A replay of the webcast will be available on the website approximately one hour following the call.
Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, and any acquisition or financial transaction-related expenses. 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 non-recurring, unusual items.
About Simulations Plus
Serving clients worldwide for 25 years, Simulations Plus is a leading provider in the biosimulation market providing software and consulting services supporting drug discovery, development, research, and regulatory submissions. We offer solutions that bridge machine learning, physiologically based pharmacokinetics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. Our technology is licensed and applied by major pharmaceutical, biotechnology, and regulatory agencies worldwide. For more information, visit our website at www.simulations-plus.com. Follow us on Twitter | LinkedIn.
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 that 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 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, our ability to identify and close acquisitions on terms favorable to the company, 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.