Simulations Plus, Inc. reported a notable financial performance for the three and nine months ended May 31, 2026, with total revenues reaching $21.9 million for the quarter, a 7% increase from $20.4 million in the same period last year. The growth was primarily driven by a 20% rise in service-related revenue, which amounted to $9.3 million, while software revenue remained relatively stable at $12.6 million. For the nine-month period, total revenues increased by 5% to $64.6 million, supported by a 14% increase in service revenues, although software revenues saw a slight decline of 2%.
The company's gross profit for the quarter improved to $15.1 million, reflecting a gross margin of 69%, up from 64% in the prior year. This increase was attributed to lower software-related costs, particularly a significant reduction in amortization expenses following the impairment of the Pro-ficiency developed technology in the previous fiscal year. Operating expenses also saw a substantial decrease, dropping from $87.3 million to $10.6 million, primarily due to the absence of impairment charges that had impacted the prior year’s results. Consequently, Simulations Plus reported a net income of $3.6 million for the quarter, a significant turnaround from a net loss of $67.3 million in the same period last year.
In terms of strategic developments, the company has been actively investing in research and development, with R&D expenses increasing by 98% to $3.4 million for the quarter. This investment is aimed at enhancing their software offerings and developing an integrated, cloud-enabled modeling ecosystem. The company also reported a total of 20,216,438 shares outstanding as of May 31, 2026, reflecting a slight increase from the previous year.
Operationally, Simulations Plus has maintained a strong cash position, ending the quarter with $35.3 million in cash and cash equivalents, alongside $14.7 million in short-term investments. The company’s cash flow from operating activities improved to $19.4 million for the nine months ended May 31, 2026, compared to $12.5 million in the prior year. This improvement was driven by increased net income and changes in working capital.
Looking ahead, Simulations Plus has entered into a Merger Agreement with SP Evolution HoldCo II, LLC, which is expected to be completed in the fourth quarter of 2026, subject to customary closing conditions. The merger will result in the company becoming a privately held entity, with shareholders set to receive $18.50 per share. The management remains optimistic about the future, emphasizing continued investment in innovation and strategic growth initiatives to enhance their competitive position in the biopharma sector.
About Simulations Plus, Inc.
Simulations Plus, Inc. provides software and consulting services for drug discovery, development, and regulatory approval. Its core offerings include modeling and simulation tools like GastroPlus and ADMET Predictor, supporting pharmaceutical, biotech, and academic clients worldwide. The company enhances R&D efficiency, reduces costs, and accelerates time-to-market through innovative science-based solutions across the drug development continuum. It operates with a focus on scientific expertise, proprietary technology, and global customer relationships.
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