Simulations Plus, Inc. (“Simulations Plus”), a leading provider of biosimulation, simulation-enabled performance and intelligence solutions, and medical communications to the biopharma industry, reported financial results for its fourth quarter and fiscal 2024, ended August 31, 2024.
Fourth Quarter 2024 Financial Highlights (compared to fourth quarter 2023)
- Total revenue increased 19% to $18.7 million
- Software revenue increased 6% to $9.9 million, representing 53% of total revenue
- Services revenue increased 39% to $8.8 million, representing 47% of total revenue
- Gross profit of $6.8 million; gross margin was 37%
- Adjusted EBITDA of $4.1 million, representing 22% of total revenue, compared to $4.9 million, representing 31% of total revenue
- Net income of $0.8 million and diluted EPS of $0.04 versus net income of $0.5 million and diluted EPS of $0.03
- Adjusted diluted EPS of $0.06, excluding the impact of acquisition costs, versus adjusted diluted EPS of $0.18
Full Year 2024 Financial Highlights (compared to full year 2023)
- Total revenue increased 18% to $70.0 million
- Software revenue increased 12% to $41.0 million, representing 59% of total revenue
- Services revenue increased 26% to $29.0 million, representing 41% of total revenue
- Gross profit of $43.2 million; gross margin was 62%
- Adjusted EBITDA of $20.3 million, representing 29% of total revenue, compared to $20.6 million, representing 35% of total revenue
- Net income of $10.0 million and diluted EPS of $0.49, equivalent to the prior period
- Adjusted diluted EPS of $0.53, excluding the impact of acquisition costs, versus adjusted diluted EPS of $0.67
Management Commentary
“Our fiscal year 2024 results reflected strong performance in both our software and services segments,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Total revenue increased 18%, driven by upgrade releases that advanced our biosimulation leadership across all of our main platforms, including GastroPlus ® , MonolixSuite™ and ADMET Predictor ® . Organic revenue growth, excluding the fourth quarter revenue contribution from Pro-ficiency , was 14%. Software revenue increased 12%, led by our Clinical Pharmacology & Pharmacometrics (CPP) business unit with its MonolixSuite platform expanding by 20%. Our services segment delivered notable strength, increasing by 26% and exceeding our internal expectations, led by robust growth in our Quantitative Systems Pharmacology (QSP) and CPP business units.
“In June, we acquired Pro-ficiency, the largest and most significant M&A transaction in our Company’s history. This acquisition doubled our total addressable market to $8 billion and is expected to accelerate future growth by expanding our ability to support clients across clinical operations, medical affairs, and commercialization. The integration is progressing ahead of schedule, and we anticipate that our newly combined go-to-market strategies will drive additional business development opportunities. Additionally, our shared scientific and technological capabilities are expected to deliver enhanced products and services, further benefiting our clients.
“Overall, we had a successful year and furthered our leadership position with a one-of-a-kind platform that spans the drug development value chain. I want to thank our expanded team for their unwavering dedication to create value for our customers through innovative science-based software and consulting solutions that optimize treatment options and improve patient lives.
“Looking ahead, we anticipate healthy revenue growth in fiscal 2025. Based upon current market conditions, organic growth is expected to be in the range of 10% to 15%. In addition, the Pro-ficiency acquisition – which encompasses our Adaptive Learning and Insights (ALI) and Medical Communications (MC) business units – is expected to contribute $15 to $18 million. Our fiscal 2025 guidance is as follows:
Fiscal 2025 Guidance
|
Fiscal 2025 Guidance |
|
|
Revenue |
$90M - $93M |
|
Revenue growth |
28 - 33% |
|
Software mix |
55 - 60% |
|
Adjusted EBITDA margin |
31 - 33% |
|
Adjusted diluted EPS |
$1.07 - $1.20 |
“Moving on to market conditions, the funding environment in both pharma and biotech has been constrained for two consecutive years. While we are encouraged by initial budget discussions with our clients for calendar year 2025, we are maintaining our cautiously optimistic approach, consistent with the strategy we’ve employed over the past few years. Importantly, we believe that we are well-positioned to respond if there is an uptick in spending during the year.
“Finally, our near-term priorities include completing the acquisition integration, expanding cross-selling opportunities, and driving towards our historical adjusted EBITDA margin target of 35-40% and corresponding profitability levels. We remain committed to executing our disciplined growth strategy and delivering long-term value for our stakeholders,” concluded O’Connor.
Webcast and Conference Call Details
Shawn O’Connor, Chief Executive Officer, and Will Frederick, Chief Financial and Operating 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 (domestic) or 1-201-389-0879 (international) or by clicking on this Call me™ link to request a return call. The webcast can be accessed on the investor relations page of the Simulations Plus website https://www.simulations-plus.com/investorscorporate-profile/corporate-profile/ where it will also be available for replay approximately one hour following the call.
