Simulations Plus, Inc. (“Simulations Plus” or the “Company”), a leading provider of cheminformatics, biosimulation, simulation-enabled performance and intelligence solutions, and medical communications to the biopharma industry, reported financial results for its third quarter fiscal 2025, ended May 31, 2025.
Third Quarter 2025 Financial Highlights (as compared to third quarter 2024)
- Total revenue increased 10% to $20.4 million
- Software revenue increased 6% to $12.6 million, representing 62% of total revenue
- Services revenue increased 17% to $7.7 million, representing 38% of total revenue
- Gross profit was $13.0 million; gross margin was 64%
- Net loss of $67.3 million and diluted loss per share of $3.35, reflecting a non-cash impairment charge of $77.2 million, compared to net income of $3.1 million and diluted EPS of $0.15
- Adjusted EBITDA of $7.4 million, representing 37% of total revenue, compared to $5.6 million, representing 30% of total revenue
- Adjusted net income of $9.0 million and adjusted diluted EPS of $0.45 compared to adjusted net income of $5.6 million and adjusted diluted EPS of $0.27
Nine Months 2025 Financial Highlights (as compared to nine months 2024)
- Total revenue increased 20% to $61.7 million
- Software revenue increased 18% to $36.8 million, representing 60% of total revenue
- Services revenue increased 23% to $24.9 million, representing 40% of total revenue
- Gross profit was $36.4 million; gross margin was 59%
- Net loss of $64.0 million and diluted loss per share of $3.19, reflecting a non-cash impairment charge of $77.2 million versus net income of $9.1 million and diluted EPS of $0.45
- Adjusted EBITDA of $18.5 million, representing 30% of total revenue, compared to $16.1 million, representing 31% of total revenue
- Adjusted net income of $18.7 million and adjusted diluted EPS of $0.93, compared to adjusted net income of $15.7 million and adjusted diluted EPS of $0.77
Management Commentary
“In the third quarter, our revenue grew by 10% in line with our preliminary revenue,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Our software revenue continued to perform well, increasing 6%, mainly driven by our ADMET Predictor® software and modest growth in our GastroPlus® and MonolixSuite TM software, partially offset by a decline in our QSP/QST biosimulations software.
“Services revenue for the third fiscal quarter grew by 17%, primarily driven by solid performance in our Medical Communications services. However, we experienced a decline in other service areas, largely due to cautious spending behavior, project delays and a cancellation from our BioPharma clients. While the sales pipeline remains robust with healthy client interest, the pace of contractual commitments slowed, impacting third quarter 2025 bookings.
“We also recognized a one-time non-cash impairment charge of $77.2 million this quarter. This charge was based on a valuation assessment we made and aligns the book value of our assets to their current market value. It also reflects our commitment to transparency as we streamline our operating structure for greater efficiency and impact.
“During the quarter, we also implemented a strategic reorganization, transitioning from a business unit structure to a functionally-driven operating model. This marked the final phase of a multi-year transformation to streamline operations, unlock synergies across teams, and concentrate our resources on the most promising growth opportunities. Additionally, we identified efficiencies in our cost structure that resulted in right-sizing our staffing levels and better aligning our services capacity to match current client needs.
“Despite the current macroeconomic environment, our team remains focused on innovation, and we are rolling out a series of new AI-driven initiatives across our product lines. By applying advanced technologies like AI to drive innovation and growth, we believe these new and eagerly anticipated solutions will expand our value proposition and give us a distinct competitive advantage in the biosimulation market. This strategy not only enriches our product ecosystem but also positions Simulations Plus for sustained growth and further solidifies our leadership in model-informed drug development solutions,” concluded O’Connor.
Fiscal 2025 Guidance
Simulations Plus is updating its full fiscal year 2025 guidance as follows:
Fiscal 2025 Guidance
|
Fiscal 2025 Guidance |
|
|
Revenue |
$76M - $80M |
|
Revenue growth |
9 - 14% |
|
Software mix |
55 - 60% |
|
Adjusted EBITDA margin |
23 - 27% |
|
Adjusted diluted EPS |
$0.93 - $1.06 |
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 5:00 p.m. Eastern Time to discuss the details of Simulations Plus’ 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.
