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Simulations Plus (SLP) Q1 Earnings & Revenues Miss Estimates
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Simulations Plus (SLP - Free Report) reported first-quarter fiscal 2023 earnings of 6 cents per share, down 60% on a year-over-year basis. The figure missed the Zacks Consensus Estimate by 50%.
Revenues of $12 million decreased 4% year over year, affected by lower revenues in Software business segment. The top line missed the Zacks Consensus Estimate by 3.8%.
Following the earnings announcement, shares of Simulations Plus are down 5.4% in premarket trading on Jan 5.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Revenues from software (51% of the total quarterly revenues) declined 17% year over year to $6.1 million due to changes in renewal pattern and shift in revenue seasonality. Breaking up the revenues of the segment, GastroPlus contributed 50%, MonolixSuite contributed 26%, ADMET Predictor contributed 18% and other software generated 6%.
Sales of GastroPlus, MonolixSuite and ADMET Predictor offerings declined 24%, 1% and 25% year over year, respectively.
The renewal rate for commercial customers came in at 90% based upon fees compared with 96% in the prior quarter. The renewal rate for commercial customers came in at 82% based on accounts compared with 93% in the prior quarter.
Services’ revenues (49% of total quarterly revenues) improved 17% to $5.9 million. Breaking up the services’ revenues, PK/PD represented 49%, QSP/QST was 18%, PB/PK was 25% and other services was 8%.
Services’ backlog was $16 million at the end of the reported quarter, up 6.7% year over year.
Operating Details
The gross margin in the quarter under review was 78%, unchanged on a year-over-year basis. Software segment’s gross margin came in at 85.4%, down 460 bps from the prior-year quarter’s levels. Services’ gross margin was 69.7%, down 970 bps from the prior-year quarter’s figure.
Total operating expenses, as a percentage of revenues, came in at 70% compared with 47% in the prior year quarter.
The operating income margin was 7% compared with 31% reported in the year-ago period. Adjusted EBITDA margin came in at 25% compared with 42% in the year-ago period.
Balance Sheet
As of Nov 30, 2022, cash and short-term investments were 131.5 million compared with $128.2 million as of Aug 31, 2022.
The company declared a cash dividend of 6 cents per share payable on Feb 6, to stockholders as of Jan 30.
Fiscal 2023 Outlook
For fiscal 2023, Simulations Plus expects revenue growth of 10-15% year over year and in the range of $59.3-$62 million. For the fiscal year, the company expects software to consist 60-65% of revenues and services to consist 35-40%. The company expects earnings per share to increase in the band of 5-10%.
Zacks Rank & Stocks to Consider
Currently, Simulations Plus carries a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.37 per share, up 0.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 14.1% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.31 per share, rising 1.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.9%. Shares of JBL have declined 5.9% in the past year.
The Zacks Consensus Estimate for Asure Software’s 2022 earnings is pegged at 7 cents per share, rising 75% in the past 60 days. The long-term earnings growth rate is anticipated to be 23%.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 83.3%. Shares of ASUR have soared 36.9% in the past year.
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Simulations Plus (SLP) Q1 Earnings & Revenues Miss Estimates
Simulations Plus (SLP - Free Report) reported first-quarter fiscal 2023 earnings of 6 cents per share, down 60% on a year-over-year basis. The figure missed the Zacks Consensus Estimate by 50%.
Revenues of $12 million decreased 4% year over year, affected by lower revenues in Software business segment. The top line missed the Zacks Consensus Estimate by 3.8%.
Following the earnings announcement, shares of Simulations Plus are down 5.4% in premarket trading on Jan 5.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote
Quarter in Details
Revenues from software (51% of the total quarterly revenues) declined 17% year over year to $6.1 million due to changes in renewal pattern and shift in revenue seasonality. Breaking up the revenues of the segment, GastroPlus contributed 50%, MonolixSuite contributed 26%, ADMET Predictor contributed 18% and other software generated 6%.
Sales of GastroPlus, MonolixSuite and ADMET Predictor offerings declined 24%, 1% and 25% year over year, respectively.
The renewal rate for commercial customers came in at 90% based upon fees compared with 96% in the prior quarter. The renewal rate for commercial customers came in at 82% based on accounts compared with 93% in the prior quarter.
Services’ revenues (49% of total quarterly revenues) improved 17% to $5.9 million. Breaking up the services’ revenues, PK/PD represented 49%, QSP/QST was 18%, PB/PK was 25% and other services was 8%.
Services’ backlog was $16 million at the end of the reported quarter, up 6.7% year over year.
Operating Details
The gross margin in the quarter under review was 78%, unchanged on a year-over-year basis. Software segment’s gross margin came in at 85.4%, down 460 bps from the prior-year quarter’s levels. Services’ gross margin was 69.7%, down 970 bps from the prior-year quarter’s figure.
Total operating expenses, as a percentage of revenues, came in at 70% compared with 47% in the prior year quarter.
The operating income margin was 7% compared with 31% reported in the year-ago period. Adjusted EBITDA margin came in at 25% compared with 42% in the year-ago period.
Balance Sheet
As of Nov 30, 2022, cash and short-term investments were 131.5 million compared with $128.2 million as of Aug 31, 2022.
The company declared a cash dividend of 6 cents per share payable on Feb 6, to stockholders as of Jan 30.
Fiscal 2023 Outlook
For fiscal 2023, Simulations Plus expects revenue growth of 10-15% year over year and in the range of $59.3-$62 million. For the fiscal year, the company expects software to consist 60-65% of revenues and services to consist 35-40%. The company expects earnings per share to increase in the band of 5-10%.
Zacks Rank & Stocks to Consider
Currently, Simulations Plus carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Asure Software (ASUR - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.37 per share, up 0.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have declined 14.1% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.31 per share, rising 1.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.9%. Shares of JBL have declined 5.9% in the past year.
The Zacks Consensus Estimate for Asure Software’s 2022 earnings is pegged at 7 cents per share, rising 75% in the past 60 days. The long-term earnings growth rate is anticipated to be 23%.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 83.3%. Shares of ASUR have soared 36.9% in the past year.