Simulations Plus, Inc. (SLP), a leading provider of simulation software for the pharmaceutical and biotechnology industries, saw its stock price plunge by 5.4% in after-hours trading on Tuesday, January 7, 2025, following the release of its fiscal first-quarter 2025 financial results.

The company reported a 31% year-over-year increase in total revenue to $18.9 million for the quarter ended November 30, 2024, driven by a 41% surge in software revenue to $10.7 million and a 19% rise in services revenue to $8.2 million. However, net income and earnings per share fell short of expectations.

Simulations Plus reported net income of $206,000, or $0.01 per diluted share, compared to $1.9 million, or $0.10 per diluted share, in the same quarter a year ago. Adjusted diluted earnings per share (EPS) came in at $0.17, slightly lower than the consensus estimate of $0.17 and the year-ago figure of $0.18.

The company attributed the decline in profitability to temporary headwinds in its services segment, where some client-driven data delays postponed the ramp-up of certain projects into the second quarter. Additionally, Simulations Plus faced higher operating expenses, with research and development, sales and marketing, and general and administrative costs all increasing compared to the prior-year quarter.

Despite the disappointing results, Simulations Plus maintained its full-year fiscal 2025 guidance, expecting revenue in the range of $90 million to $93 million and adjusted EPS of $1.07 to $1.20. The company highlighted its strong start to the fiscal year, with momentum expected to strengthen in the back half of 2025.