Simulations Plus, Inc., a leading provider of modeling and simulation software and services for pharmaceutical drug discovery and development, reported financial results for its fourth quarter and fiscal 2023, ended August 31, 2023.
Fourth Quarter Financial Highlights
- Total revenue increased 33% to $15.6 million
- Software revenue increased 59% to $9.3 million, representing 60% of total revenue
- Services revenue increased 8% to $6.3 million, representing 40% of total revenue
- Gross profit increased 35% to $12.3 million; gross margin was 78%
- Adjusted EBITDA of $4.9 million, representing 31% of total revenue
- Adjusted EPS of $0.18
- Net income of $0.5 million and diluted earnings per share (EPS) of $0.03, compared to net income of $1.0 million and diluted EPS of $0.05 in the fourth quarter of 2022
Full Year Financial Highlights
- Total revenue increased 11% to $59.6 million
- Software revenue increased 12% to $36.5 million, representing 61% of total revenue
- Services revenue increased 8% to $23.1 million, representing 39% of total revenue
- Gross profit increased 11% to $47.9 million; gross margin was 80%
- Adjusted EBITDA of $20.6 million, representing 35% of total revenue
- Adjusted EPS of $0.67
- Net income of $10.0 million and diluted EPS of $0.49, compared to net income of $12.5 million and diluted EPS of $0.60 in fiscal 2022
Management Commentary
“We delivered strong revenue and earnings results for fiscal 2023, marked by our team’s impressive execution on building strong customer relationships,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Our ability to drive growth while navigating a challenging environment demonstrates the strength of our customer-centric business model and the effort and dedication of our colleagues throughout the year.”
“Fourth quarter revenue increased 33% year-over-year, driven by strong contribution across our software segment offerings, with notable performance by GastroPlus, and solid performance in our services offering, especially in our quantitative systems pharmacology (QSP) business unit, which benefitted from our Immunetrics acquisition in the quarter. Gross margins for the fourth quarter remained strong at 78%, reflecting a favorable mix of higher margin software sales and our ability to pass along price increases. We achieved our fiscal 2023 guidance for both revenue and adjusted diluted EPS.”
“Our renewal harmonization initiative to simplify and align contract renewals played out as expected and is essentially complete. We achieved our goal of gaining greater visibility into our revenues, and with contract harmonization now embedded in the normal course of our business processes, we expect that both Simulations Plus and our customers will see the benefits going forward.”
“The integration of Immunetrics is going well. Immunetrics brings its strong reputation in the immunology and oncology markets and has a healthy pipeline, including new accounts sourced from our Simulations Plus customer base.”
“We believe that we enter fiscal 2024 well-positioned for continued growth. The underlying fundamentals of our market are resilient, our pipeline is healthy, our profitability is strong, and our balance sheet is sound. Our team remains committed to innovative and disciplined growth that delivers long-term returns for our shareholders.”
Fiscal 2024 Guidance
|
Fiscal 2024 Guidance |
Annual Increase |
|
|
Revenue |
$66M - $69M |
10 - 15% |
|
Software mix |
55 - 60% |
— |
|
Services mix |
40 - 45% |
— |
|
Diluted earnings per share |
$0.66 - $0.68 |
35 - 39% |
Quarterly Dividend
The Company’s Board of Directors declared a cash dividend of $0.06 per share of the Company’s common stock, payable on November 6, 2023, to shareholders of record as of October 30, 2023. 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
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 ESG website .
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 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 or 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.
Investor Day
Simulations Plus will host a virtual Investor Day on Tuesday, November 14, 2023. Presentations will be made by CEO Shawn O’Connor, CFO Will Frederick and business unit leaders. The presentations will provide an in-depth overview of Simulations Plus’ paths to win through stronger customer alignment, its growth strategy, and financial outlook. Attendance is by invitation only to institutional investors and analysts. Presentations are expected to begin at 1:00 p.m. ET, and the event is expected to conclude at 3:00 p.m. ET. Dial-in information will be available at a later date, and a more detailed agenda, presentations and a live webcast will be available on the day of the event on the Simulations Plus website at https://www.simulations-plus.com/investorscorporate-profile/conference-calls/ . A replay and transcript of the webcast will be available shortly after the event.
