Simulations Plus Reports Third Quarter Fiscal 2023 Financial Results
- None.
- None.
Total revenue of
Maintains full-year revenue guidance of
Third Quarter Financial Highlights (Fiscal 2023 vs. Fiscal 2022)
-
Total revenue increased
9% to$16.2 million -
Software revenue increased
10% to$10.6 million 65% of total revenue -
Services revenue increased
5% to$5.6 million 35% of total revenue -
Gross profit increased
7% to$13.3 million 82% -
Net income of
$4.0 million $0.20 $4.1 million $0.20 -
Adjusted EBITDA of
$6.5 million 40% of total revenue
Nine Months Financial Highlights (Fiscal 2023 vs. Fiscal 2022)
-
Total revenue increased
4% to$43.9 million -
Software revenue increased
2% to$27.2 million 62% of total revenue -
Services revenue increased
9% to$16.8 million 38% of total revenue -
Gross profit increased
5% to$35.7 million 81% -
Net income of
$9.4 million $0.46 $11.5 million $0.56 -
Adjusted EBITDA of
$15.7 million 36% of total revenue
Management Commentary
“We had a solid third quarter that delivered revenue in line with our expectations,” said Shawn O’Connor, Chief Executive Officer of Simulations Plus. “Our team continued to perform exceptionally well in an environment that remains challenged by constrained industry spending. Strong execution on our strategic priorities this quarter resulted in profitable growth that keeps us on track to meet our stated goals for fiscal 2023.
“Third quarter revenue increased
“On June 20th, we announced our acquisition of Immunetrics, a modeling and simulation company. This acquisition expands our robust quantitative systems pharmacology (QSP) expertise into the fast-growing therapeutic areas of oncology, immunology and autoimmune diseases. Immunetrics brings proven QSP technology, a strong reputation in the market, and an incredibly talented team that we believe will enhance our leadership in biosimulation. I am excited to welcome the Immunetrics team to Simulations Plus.
“As we enter the fourth quarter, our performance for the nine months gives us confidence in our previously stated guidance. Our customer pipeline remains solid, our profitability is strong, and our balance sheet is sound. We remain focused on continuing to drive innovative and disciplined growth that will deliver attractive long-term returns for our shareholders.”
Fiscal 2023 Guidance
|
Fiscal 2023
|
Annual
|
Revenue |
|
10 |
Software mix |
60 |
- |
Services mix |
35 |
- |
Diluted earnings per share |
|
5 |
Quarterly Dividend
The Company’s Board of Directors declared a cash dividend of
Environmental, Social, and Governance (ESG)
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 Daylight 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 1-201-389-0879. 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.
Non-GAAP Definition
Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, (gain) loss on currency exchange, and any acquisition- or financial-transaction-related expenses. Currency exchange excluded represents the exchange rate fluctuations on the foreign currency denominated transactions. The impact of transactions in foreign currency represents the effect of converting revenue and expenses occurring in a currency other than the functional currency. The Company believes that the non-GAAP financial measures presented facilitate an understanding of operating performance and provide a meaningful comparison of its results between periods. The Company’s management uses non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results, for internal planning and forecasting purposes and in the calculation of performance-based compensation. Adjusted EBITDA represents a measure that we believe is customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that Adjusted EBITDA is useful in evaluating our core operating results. However, Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in
About Simulations Plus
Serving clients worldwide for more than 25 years, Simulations Plus is a leading provider in the biosimulation market providing software and consulting services supporting drug discovery, development, research, and regulatory submissions. We offer solutions that bridge artificial intelligence (AI)/machine learning, physiologically based pharmacokinetics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. Our technology is licensed and applied by major pharmaceutical, biotechnology, and regulatory agencies worldwide. For more information, visit our website at www.simulations-plus.com. Follow us on LinkedIn | Twitter | YouTube.
Forward-Looking Statements
Except for historical information, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties. Words like “believe,” “expect,” and “anticipate” mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to successfully integrate the Immunetrics business with our own, as well as expenses we may incur in connection therewith, our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, market conditions, macroeconomic factors, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports and filed with the
SIMULATIONS PLUS, INC.
|
||||||||||||||||
|
|
Three Months Ended May 31, |
|
Nine Months Ended May 31, |
||||||||||||
(in thousands, except per common share amounts) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
|
||||||||
Software |
|
$ |
10,632 |
|
|
$ |
9,647 |
|
|
$ |
27,193 |
|
|
$ |
26,767 |
|
Services |
|
|
5,602 |
|
|
|
5,312 |
|
|
|
16,755 |
|
|
|
15,405 |
|
Total revenues |
|
|
16,234 |
|
|
|
14,959 |
|
|
|
43,948 |
|
|
|
42,172 |
|
Cost of revenues |
|
|
|
|
|
|
|
|
||||||||
Software |
|
|
908 |
|
|
|
730 |
|
|
|
2,636 |
|
|
|
2,245 |
|
Services |
|
|
2,053 |
|
|
|
1,829 |
|
|
|
5,616 |
|
|
|
5,900 |
|
Total cost of revenues |
|
|
2,961 |
|
|
|
2,559 |
|
|
|
8,252 |
|
|
|
8,145 |
|
Gross profit |
|
|
13,273 |
|
|
|
12,400 |
|
|
|
35,696 |
|
|
|
34,027 |
|
Operating expenses |
|
|
|
|
|
|
|
|
||||||||
Research and development |
|
|
945 |
|
|
|
655 |
|
|
|
3,428 |
|
|
|
2,439 |
|
Selling, general, and administrative |
|
|
8,231 |
|
|
|
6,799 |
|
|
|
23,259 |
|
|
|
17,371 |
|
Total operating expenses |
|
|
9,176 |
|
|
|
7,454 |
|
|
|
26,687 |
|
|
|
19,810 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income from operations |
|
|
4,097 |
|
|
|
4,946 |
|
|
|
9,009 |
|
|
|
14,217 |
|
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense), net |
|
|
843 |
|
|
|
(112 |
) |
|
|
2,617 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes |
|
|
4,940 |
|
|
|
4,834 |
|
|
|
11,626 |
|
|
|
14,223 |
|
Provision for income taxes |
|
|
(932 |
) |
|
|
(747 |
) |
|
|
(2,199 |
) |
|
|
(2,701 |
) |
Net income |
|
$ |
4,008 |
|
|
$ |
4,087 |
|
|
$ |
9,427 |
|
|
$ |
11,522 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.47 |
|
|
$ |
0.57 |
|
Diluted |
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.46 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
19,972 |
|
|
|
20,212 |
|
|
|
20,123 |
|
|
|
20,180 |
|
Diluted |
|
|
20,355 |
|
|
|
20,768 |
|
|
|
20,512 |
|
|
|
20,731 |
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax |
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments |
|
|
144 |
|
|
|
24 |
|
|
|
174 |
|
|
|
(251 |
) |
Comprehensive income |
|
$ |
4,152 |
|
|
$ |
4,111 |
|
|
$ |
9,601 |
|
|
$ |
11,271 |
|
SIMULATIONS PLUS, INC.
|
||||||||
|
|
(Unaudited) |
|
(Audited) |
||||
(in thousands, except share and per share amounts) |
|
May 31, 2023 |
|
August 31, 2022 |
||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
55,131 |
|
|
$ |
51,567 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
|
10,214 |
|
|
|
13,787 |
|
Prepaid income taxes |
|
|
— |
|
|
|
1,391 |
|
Prepaid expenses and other current assets |
|
|
4,730 |
|
|
|
3,377 |
|
Short-term investments |
|
|
67,234 |
|
|
|
76,668 |
|
Total current assets |
|
|
137,309 |
|
|
|
146,790 |
|
Long-term assets |
|
|
|
|
||||
Capitalized computer software development costs, net of accumulated amortization of |
|
|
11,000 |
|
|
|
9,563 |
|
Property and equipment, net |
|
|
701 |
|
|
|
632 |
|
Operating lease right-of-use assets |
|
|
982 |
|
|
|
1,420 |
|
Intellectual property, net of accumulated amortization of |
|
|
8,007 |
|
|
|
9,057 |
|
Other intangible assets, net of accumulated amortization of |
|
|
7,698 |
|
|
|
7,560 |
|
Goodwill |
|
|
12,921 |
|
|
|
12,921 |
|
Other assets |
|
|
516 |
|
|
|
439 |
|
Total assets |
|
$ |
179,134 |
|
|
$ |
188,382 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Accounts payable |
|
$ |
357 |
|
|
$ |
225 |
|
Accrued compensation |
|
|
3,818 |
|
|
|
3,254 |
|
Accrued expenses |
|
|
552 |
|
|
|
931 |
|
Income taxes payable |
|
|
793 |
|
|
|
— |
|
Operating lease liability - current portion |
|
|
330 |
|
|
|
461 |
|
Deferred revenue |
|
|
3,172 |
|
|
|
2,864 |
|
Total current liabilities |
|
|
9,022 |
|
|
|
7,735 |
|
Long-term liabilities |
|
|
|
|
||||
Deferred income taxes, net |
|
|
110 |
|
|
|
1,456 |
|
Operating lease liability |
|
|
612 |
|
|
|
943 |
|
Total liabilities |
|
|
9,744 |
|
|
|
10,134 |
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
Shareholders' equity |
|
|
|
|
||||
Preferred stock, |
|
$ |
— |
|
|
$ |
— |
|
Common stock, |
|
|
143,666 |
|
|
|
138,512 |
|
Retained earnings |
|
|
25,858 |
|
|
|
40,044 |
|
Accumulated other comprehensive loss |
|
|
(134 |
) |
|
|
(308 |
) |
Total shareholders' equity |
|
|
169,390 |
|
|
|
178,248 |
|
Total liabilities and shareholders' equity |
|
$ |
179,134 |
|
|
$ |
188,382 |
|
SIMULATIONS PLUS, INC.
|
||||||||||||||||||||||||||||||||||||
(in millions except earnings per share amounts) |
|
FY 2022 |
|
FY 2023 |
|
|
2022 |
|
|
|
2023 |
|
||||||||||||||||||||||||
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
FY |
|
FY |
|||||||||||||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Software |
|
$ |
7.4 |
|
|
$ |
9.8 |
|
|
$ |
9.6 |
|
|
$ |
5.9 |
|
|
$ |
6.1 |
|
|
$ |
10.5 |
|
|
$ |
10.6 |
|
|
$ |
32.7 |
|
|
$ |
27.2 |
|
Services |
|
|
5.0 |
|
|
|
5.0 |
|
|
|
5.3 |
|
|
|
5.8 |
|
|
|
5.9 |
|
|
|
5.3 |
|
|
|
5.6 |
|
|
|
21.2 |
|
|
|
16.8 |
|
Total |
|
$ |
12.4 |
|
|
$ |
14.8 |
|
|
$ |
15.0 |
|
|
$ |
11.7 |
|
|
$ |
12.0 |
|
|
$ |
15.8 |
|
|
$ |
16.2 |
|
|
$ |
53.9 |
|
|
$ |
43.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gross Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Software |
|
|
90.0 |
% |
|
|
92.0 |
% |
|
|
92.4 |
% |
|
|
86.1 |
% |
|
|
85.4 |
% |
|
|
92.0 |
% |
|
|
91.5 |
% |
|
|
90.6 |
% |
|
|
90.3 |
% |
Services |
|
|
60.0 |
% |
|
|
59.3 |
% |
|
|
65.6 |
% |
|
|
68.2 |
% |
|
|
69.7 |
% |
|
|
66.2 |
% |
|
|
63.4 |
% |
|
|
63.5 |
% |
|
|
66.5 |
% |
Total |
|
|
77.8 |
% |
|
|
80.9 |
% |
|
|
82.9 |
% |
|
|
77.2 |
% |
|
|
77.7 |
% |
|
|
83.4 |
% |
|
|
81.8 |
% |
|
|
79.9 |
% |
|
|
81.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Income from operations |
|
$ |
3.8 |
|
|
$ |
5.5 |
|
|
$ |
4.9 |
|
|
$ |
0.7 |
|
|
$ |
0.9 |
|
|
$ |
4.0 |
|
|
$ |
4.1 |
|
|
$ |
14.9 |
|
|
$ |
9.0 |
|
Operating Margin |
|
|
30.6 |
% |
|
|
37.0 |
% |
|
|
33.1 |
% |
|
|
5.9 |
% |
|
|
7.3 |
% |
|
|
25.6 |
% |
|
|
25.2 |
% |
|
|
27.7 |
% |
|
|
20.5 |
% |
Net Income |
|
$ |
3.0 |
|
|
$ |
4.4 |
|
|
$ |
4.1 |
|
|
$ |
1.0 |
|
|
$ |
1.2 |
|
|
$ |
4.2 |
|
|
$ |
4.0 |
|
|
$ |
12.5 |
|
|
$ |
9.4 |
|
Diluted Earnings Per Share |
|
$ |
0.15 |
|
|
$ |
0.21 |
|
|
$ |
0.20 |
|
|
$ |
0.05 |
|
|
$ |
0.06 |
|
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.60 |
|
|
$ |
0.46 |
|
Adjusted EBITDA |
|
$ |
5.2 |
|
|
$ |
7.1 |
|
|
$ |
6.5 |
|
|
$ |
2.5 |
|
|
$ |
3.0 |
|
|
$ |
6.2 |
|
|
$ |
6.5 |
|
|
$ |
21.2 |
|
|
$ |
15.7 |
|
Cash Flow from Operations |
|
$ |
3.6 |
|
|
$ |
2.6 |
|
|
$ |
3.8 |
|
|
$ |
7.9 |
|
|
$ |
4.7 |
|
|
$ |
5.5 |
|
|
$ |
8.5 |
|
|
$ |
17.9 |
|
|
$ |
18.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Revenue Breakdown by Region |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
$ |
8.5 |
|
|
$ |
9.7 |
|
|
$ |
11.2 |
|
|
$ |
8.4 |
|
|
$ |
8.5 |
|
|
$ |
10.6 |
|
|
$ |
10.8 |
|
|
$ |
37.7 |
|
|
$ |
29.9 |
|
EMEA |
|
|
3.0 |
|
|
|
3.7 |
|
|
|
1.9 |
|
|
|
1.7 |
|
|
|
2.1 |
|
|
|
3.6 |
|
|
|
3.4 |
|
|
|
10.4 |
|
|
|
9.1 |
|
|
|
|
0.9 |
|
|
|
1.4 |
|
|
|
1.9 |
|
|
|
1.6 |
|
|
|
1.3 |
|
|
|
1.5 |
|
|
|
2.1 |
|
|
|
5.8 |
|
|
|
5.0 |
|
Total |
|
$ |
12.4 |
|
|
$ |
14.8 |
|
|
$ |
15.0 |
|
|
$ |
11.7 |
|
|
$ |
12.0 |
|
|
$ |
15.8 |
|
|
$ |
16.2 |
|
|
$ |
53.9 |
|
|
$ |
43.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Software Performance Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Average Revenue per Customer (in 000s) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial |
|
$ |
71.0 |
|
|
$ |
101.0 |
|
|
$ |
95.0 |
|
|
$ |
65.0 |
|
|
$ |
68.0 |
|
|
$ |
110.0 |
|
|
$ |
97.0 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Services Performance Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Backlog |
|
$ |
15.4 |
|
|
$ |
17.0 |
|
|
$ |
16.7 |
|
|
$ |
15.9 |
|
|
$ |
15.8 |
|
|
$ |
15.4 |
|
|
$ |
15.7 |
|
|
|
|
|
||||
*Numbers may not add due to rounding |
||||||||||||||||||||||||||||||||||||
SIMULATIONS PLUS, INC.
|
||||||||||||||||||||||||||||||||||||
|
|
FY 2022 |
|
FY 2023 |
|
|
2022 |
|
|
|
2023 |
|
||||||||||||||||||||||||
(in millions) |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
FY |
|
FY |
||||||||||||||||||
Net Income |
|
$ |
3.0 |
|
|
$ |
4.4 |
|
|
$ |
4.1 |
|
|
$ |
1.0 |
|
|
$ |
1.2 |
|
|
$ |
4.2 |
|
|
$ |
4.0 |
|
|
$ |
12.5 |
|
|
$ |
9.4 |
|
Excluding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest income and expense, net |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.4 |
) |
|
|
(0.8 |
) |
|
|
(1.0 |
) |
|
|
(1.1 |
) |
|
|
(0.7 |
) |
|
|
(2.9 |
) |
Provision for income taxes |
|
|
0.8 |
|
|
|
1.1 |
|
|
|
0.7 |
|
|
|
(0.1 |
) |
|
|
0.4 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
2.6 |
|
|
|
2.2 |
|
Depreciation and amortization |
|
|
0.8 |
|
|
|
1.0 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
0.9 |
|
|
|
3.6 |
|
|
|
2.8 |
|
Stock-based compensation |
|
|
0.6 |
|
|
|
0.7 |
|
|
|
0.7 |
|
|
|
0.7 |
|
|
|
0.9 |
|
|
|
1.2 |
|
|
|
1.1 |
|
|
|
2.7 |
|
|
|
3.1 |
|
(Gain) loss on currency exchange |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
0.2 |
|
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
|
|
0.2 |
|
|
|
0.3 |
|
Mergers & Acquisitions expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
|
|
0.3 |
|
|
|
0.1 |
|
|
|
0.4 |
|
|
|
0.3 |
|
|
|
0.8 |
|
Adjusted EBITDA |
|
$ |
5.2 |
|
|
$ |
7.1 |
|
|
$ |
6.5 |
|
|
$ |
2.5 |
|
|
$ |
3.0 |
|
|
$ |
6.2 |
|
|
$ |
6.5 |
|
|
$ |
21.2 |
|
|
$ |
15.7 |
|
*Numbers may not add due to rounding |
||||||||||||||||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230706439214/en/
Investor Relations Contacts:
John Wilfong
Financial Profiles
310-622-8248
slp@finprofiles.com
Renee Bouche
Simulations Plus Investor Relations
661-723-7723
renee.bouche@simulations-plus.com
Source: Simulations Plus, Inc.
