Simulations Plus Reports 30% Revenue Growth in Q1 FY 2024, Net Income Declines

Simulations Plus, Inc. reported its financial results for the first quarter of fiscal year 2024, ending November 30, 2024, revealing total revenues of $18.9 million, a 30% increase from $14.5 million in the same period last year. The growth was driven by a significant rise in both software and services revenues, which reached $10.7 million and $8.2 million, respectively, compared to $7.6 million and $6.9 million in the prior year. However, the company experienced a decline in net income, which fell to $206,000 from $1.9 million, resulting in earnings per share of $0.01, down from $0.10 a year earlier.

The company’s operating expenses increased to $10.1 million from $8.9 million, primarily due to higher research and development costs, which rose to $1.8 million from $1.2 million, and increased sales and marketing expenses, which grew to $2.9 million from $2.0 million. The gross profit for the quarter was $10.2 million, slightly up from $9.8 million in the previous year, indicating a stable gross margin despite rising costs. The total assets of Simulations Plus as of November 30, 2024, were reported at $196.9 million, a marginal increase from $196.6 million at the end of the previous fiscal year.

Strategically, Simulations Plus completed the acquisition of Pro-ficiency Holdings, Inc. in June 2024, which has expanded its capabilities across the drug development value chain. This acquisition has led to the establishment of two new business units: Adaptive Learning & Insights and Medical Communications, enhancing the company's service offerings. The company has also restructured its internal organization to foster greater collaboration and innovation among its business units, which now total six.

Operationally, Simulations Plus has seen a shift in its customer engagement metrics, with remaining performance obligations totaling $11.2 million as of November 30, 2024, indicating a strong pipeline of future revenue. The company has also made significant changes to its physical footprint, moving its headquarters from Southern California to Research Triangle Park, North Carolina, while maintaining a European office in Paris, France. This move aligns with the company's commitment to a remote work culture and sustainability goals.

Looking ahead, Simulations Plus anticipates continued growth driven by its expanded product offerings and enhanced operational efficiencies. The company expects that the integration of Pro-ficiency will further strengthen its market position and improve client relationships, ultimately leading to increased revenue and profitability in the coming quarters. The management remains focused on leveraging its model-informed drug development software and consulting services to meet the evolving needs of the biopharma sector.