Simulations Plus reports Q3 EPS 15c, consensus 15c

Reports Q3 revenue $18.5M, consensus $17.9M. “Our third quarter results reflected continued solid performance in both our software and services segments,” said Shawn O’Connor, CEO. “Total revenue increased 14%, led by higher software sales in our Cheminformatics and Clinical Pharmacology & Pharmacometrics business units, with strong growth in our ADMET Predictor(R) and MonolixSuite(TM) platforms, respectively. Our Physiologically Based Pharmacokinetics business unit also performed well, reflecting higher revenues from GastroPlus(R). During the quarter, we were excited to launch GastroPlus X, the next generation of physiologically based pharmacokinetics/biopharmaceutics modeling and simulation software and believe it will become a meaningful addition to our suite of leading-edge solutions. The 18% increase in services revenue was driven by strong growth in our Quantitative Systems Pharmacology and CPP business units. Biotech funding is starting to show signs of recovery, most notably for companies that have drug candidates in the clinic. We continue to be cautiously optimistic about the funding environment for our biotech clients. We see a range of spending patterns among large pharmaceutical companies. Some are increasing expenditures, while others remain conservative, with most falling in between depending on various internal and external market factors. Overall, the market is in a better position today compared to a year ago. Our acquisition of Pro-ficiency on June 11th brings together our collective expertise in simulations, AI technologies and focus on science, creating a one-of-a-kind platform that spans across the drug development continuum. The Pro-ficiency integration and collaboration is progressing in-line with our internal plan and schedule with positive responses from our clients. Our performance in the first nine months of the year remains aligned with our original fiscal 2024 revenue guidance. The newly formed Clinical Simulations and Medical Communications business unit is expected to contribute approximately $3 million to our fiscal 2024 revenue. We are entering our final fiscal quarter of 2024 with a healthy pipeline and remain confident that Simulations Plus is well positioned to achieve its goals for the fiscal year. Going forward, we remain committed to a disciplined growth strategy that will deliver long-term returns for our shareholders.”