Simulations Plus, Inc. SLP reported first-quarter fiscal 2025 adjusted earnings of 17 cents per share, which declined 5.6% year over year. The figure, however, missed the Zacks Consensus Estimate of 18 cents per share.

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Quarterly revenues jumped 31% year over year to $18.9 million due to higher Software segment revenues and the acquisition of Pro-ficiency. Continued strength across the company’s core platforms, including GastroPlus, MonolixSuite and ADMET Predictor, was the main catalyst. The Adaptive Learning & Insights (“ALI”) and Medical Communications business units, acquired through the Pro-ficiency buyout in June 2024, contributed $3.7 million in the fiscal first quarter.

It surpassed the Zacks Consensus Estimate by 1.3%. SLP’s organic revenue growth during the quarter was 5%.

Simulations Plus, Inc. Price, Consensus and EPS Surprise

Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote

SLP’s Quarter in Details

Fiscal first-quarter revenues from Software (57% of total quarterly revenues) rose 41% year over year to $10.7 million, driven by new customer wins and increasing sales with existing customers of GastroPlus, MonolixSuite and ADMET Predictor offerings. GastroPlus, MonolixSuite, ADMET Predictor, ALI and Others contributed 38%, 21%, 12%, 16% and 13%, respectively, to total software revenues. SLP added 12 new customers and had nine upsells in the fiscal first quarter.

The renewal rate for commercial customers was 83% (based upon accounts) and 95% (based on fees) compared with 84% and 100% in the prior quarter, respectively.

Services’ revenues (43%) improved 19% to $8.2 million. On an organic basis, revenues declined 9%, due to the temporary impact of client-driven data delays that deferred the ramp-up of certain projects into the fiscal second quarter.

Quantitative Systems Pharmacology software and Clinical Pharmacology & Pharmacometrics business saw declines of 14% and 6% year over year, respectively. Sales of PBPK unit was down 9%.

Services’ backlog was $17.3 million at the end of the reported quarter, down 8.5% year over year, owing to cost-driven pullback by customers during fiscal 2024.

SLP’s Operating Details

The gross margin in the quarter under review was 54% compared with 62% in the prior-year quarter.

The Software segment’s gross margin was 75% compared with 87% in the prior-year quarter. The margin performance was affected by higher costs related to the amortization of capitalized software development costs from the acquisition of Pro-ficiency.

Services’ gross margin was 26%, down from 36%, owing to lower organic segmental revenues.

Total operating expenses, as a percentage of revenues, were 53% compared with 56% a year ago.

Income from operations was $0.1 million compared with $1 million a year ago. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin was 24%, an increase from 23% in the prior-year quarter.

SLP’s Balance Sheet

As of Nov. 30, 2024, cash and short-term investments were $18.2 million compared with $20.3 million at the end of the prior-year period.

SLP Reiterates Fiscal 2025 Outlook

SLP expects strong momentum in the second half of fiscal 2025.

Simulations Plus expects revenues to be between $90 million and $93 million. This indicates an increase of 28-33% from fiscal 2024 revenues. In addition, the Pro-ficiency acquisition is expected to contribute an additional $15-$18 million to revenues.

The company expects the Software segment mix to be 55-60% of total revenues. 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

BlackBerry BB reported the third quarter of fiscal 2025 non-GAAP earnings per share (EPS) of 2 cents. The figure was better than the company’s estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 1 cent. The Zacks Consensus Estimate was pegged at a loss of 2 cents per share. Cost discipline aided the bottom-line performance. Quarterly revenues (including Cylance business, reclassified as held for sale as of Nov. 30, 2024) of $162 million declined 7.4% year over year.

Ciena Corporation CIEN reported fourth-quarter fiscal 2024 (ended Nov. 2) results, wherein adjusted EPS of 54 cents missed the Zacks Consensus Estimate of 66 cents. Also, the bottom line declined 28% year over year. Quarterly total revenues dipped 0.5% year over year to $1,124.1 million. The top line, however, surpassed the Zacks Consensus Estimate of $1,105 million, driven by robust demand for its solutions in cloud and artificial intelligence (AI)-driven markets. As the demand for bandwidth accelerates, driven by cloud and AI, Ciena is uniquely positioned to unlock opportunities for growth and profitability.

Guidewire Software GWRE reported non-GAAP earnings per share of 43 cents for first-quarter fiscal 2025 (ended Oct. 31, 2024). The figure surpassed the Zacks Consensus Estimate by 43.3%. It reported break-even earnings in the prior-year period. The company reported revenues of $262.9 million, up 27% year over year. Revenues surpassed the Zacks Consensus Estimate by 3.4%. The figure also came ahead of the company’s guided range of $251-$257 million. This uptick was driven by solid deal volume, especially in Tier 1, and increasing international momentum, especially in Asia Pacific and Europe.

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