Simulations Plus, Inc. SEC 10-Q Report

Simulations Plus, Inc., a leading provider of modeling and simulation software for pharmaceutical discovery and development, has released its Form 10-Q report for the third quarter of fiscal year 2025. The report highlights the company's financial performance, operational achievements, and strategic initiatives aimed at driving future growth.

Financial Highlights

• Total Revenues: $20.4 million, increased by 10% compared to the same period last year, driven by a 6% increase in software-related revenue and a 17% increase in service-related revenue.
• Gross Profit: $13.0 million, decreased by 2% from the previous year, with a gross margin of 64% due to increased cost of revenues.
• (Loss) Income from Operations: $(74.2) million, a significant decline from $1.9 million in the prior year, primarily due to impairment charges.
• Net (Loss) Income: $(67.3) million, compared to a net income of $3.1 million in the previous year, impacted by impairment charges and increased costs.
• Diluted EPS: $(3.35), compared to $0.15 in the previous year, reflecting the net loss incurred during the period.

Business Highlights

• Revenue Segments: The company reported a 10% increase in total revenues for the three months ended May 31, 2025, driven by a 6% increase in software-related revenue and a 17% increase in service-related revenue. The software segment accounted for 62% of total revenue, while the services segment accounted for 38%.
• Geographical Performance: For the three months ended May 31, 2025, the Americas contributed 71% of total revenue, EMEA contributed 18%, and Asia Pacific contributed 11%. This reflects a slight shift from the previous year, where EMEA had a higher percentage of total revenue.
• Geographical Performance: For the nine months ended May 31, 2025, the Americas accounted for 73% of total revenue, EMEA for 18%, and Asia Pacific for 9%. This indicates a stronger performance in the Americas compared to the previous year.
• New Product Launches: The company released a new version of GastroPlus in May 2024, which contributed to higher amortization of capitalized software costs.
• Operational Restructuring: The company executed a restructuring plan to reduce its workforce by approximately 10% to enhance operational efficiency and reduce operating expenses. This is expected to reduce operating expenses by approximately $4.3 million on an annualized basis.
• Future Outlook: The company anticipates continued growth in its software and services segments, with a focus on leveraging the Pro-ficiency acquisition to enhance its offerings in adaptive learning and medical communications.
• Impairments: The company recorded significant impairment charges during the third quarter of 2025 due to underperformance in certain reporting units, including ALI/MC Software and Services, impacting goodwill and other intangible assets.
• Sales and Marketing: Sales and marketing expenses increased by 12% for the three months ended May 31, 2025, primarily due to expenses related to the acquisition of Pro-ficiency.
• Research and Development: R&D expenses increased by 36% for the nine months ended May 31, 2025, primarily due to the acquisition of Pro-ficiency, which contributed to higher development costs.

SEC Filing: Simulations Plus, Inc. [ SLP ] - 10-Q - Jul. 15, 2025