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Simulations Plus (SLP) Q1 Earnings Miss, Revenues Rise Y/Y
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Simulations Plus (SLP - Free Report) reported first-quarter fiscal 2024 earnings of 10 cents per share, up 66.7% on a year-over-year basis. However, the figure missed the Zacks Consensus Estimate by 9.1%.
The top line increased 21% year over year to $14.5 million driven by higher software revenues from Quantitative Systems Pharmacology (QSP) oncology modeling platform and Physiologically Based Pharmacokinetics (PB/PK) business. The top line beat the Zacks Consensus Estimate by 5.3%.
Quarter in Details
Revenues from Software (52% of total quarterly revenues) increased 25% year over year to $7.6 million.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Sales of MonolixSuite were down 1%. GastroPlus and ADMET Predictor offerings sales saw an increase of 27% and 3% year over year, respectively.
The renewal rate for commercial customers came in at 100% (based upon fees) and 84% (based on accounts) compared with 90% and 82% in the prior quarter, respectively.
Services’ revenues (48%) improved 17% to $6.9 million.
Services’ backlog was $18.9 million at the end of the reported quarter, up 19.6% year over year.
Operating Details
The gross margin in the quarter under review was 68% compared with 78% in the prior year. The software segment’s gross margin came in at 86.9%, up 150 bps from a year ago. Services’ gross margin was 47% compared with 69.7% reported in the year-earlier quarter.
Total operating expenses, as a percentage of revenues, were 61% compared with 70% a year ago.
The operating income margin was 7%, unchanged from the year-ago reported figure. Adjusted EBITDA margin came in at 23% compared with 25% in the prior year.
Balance Sheet
As of Nov 30, 2023, cash and short-term investments were $113.9 million compared with $115.5 million as of Aug 31, 2023.
The company declared a cash dividend of 6 cents per share payable on Feb 5, to stockholders as of Jan 29.
Fiscal 2024 Outlook
Simulations Plus expects revenues to be between $66 million and $69 million. This suggests an increase of 10-15% compared with fiscal 2023 revenues. The company projects Software and Services to consist 55-60% and 40-45% of revenues, respectively. SLP estimates earnings per share to increase in the band of 35-39% year over year and to be between 66 cents and 68 cents.
Currently, Simulations Plus carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Cadence’s 2023 EPS has remained unchanged in the past 60 days at $5.10. CDNS’ long-term earnings growth rate is 17.9%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of CDNS have gained 64.1% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR were down 23.3% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has improved by 1.3% in the past 60 days to $3.86.
BLKB’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have jumped 41.2% in the past year.
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Simulations Plus (SLP) Q1 Earnings Miss, Revenues Rise Y/Y
Simulations Plus (SLP - Free Report) reported first-quarter fiscal 2024 earnings of 10 cents per share, up 66.7% on a year-over-year basis. However, the figure missed the Zacks Consensus Estimate by 9.1%.
The top line increased 21% year over year to $14.5 million driven by higher software revenues from Quantitative Systems Pharmacology (QSP) oncology modeling platform and Physiologically Based Pharmacokinetics (PB/PK) business. The top line beat the Zacks Consensus Estimate by 5.3%.
Quarter in Details
Revenues from Software (52% of total quarterly revenues) increased 25% year over year to $7.6 million.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote
Sales of MonolixSuite were down 1%. GastroPlus and ADMET Predictor offerings sales saw an increase of 27% and 3% year over year, respectively.
The renewal rate for commercial customers came in at 100% (based upon fees) and 84% (based on accounts) compared with 90% and 82% in the prior quarter, respectively.
Services’ revenues (48%) improved 17% to $6.9 million.
Services’ backlog was $18.9 million at the end of the reported quarter, up 19.6% year over year.
Operating Details
The gross margin in the quarter under review was 68% compared with 78% in the prior year. The software segment’s gross margin came in at 86.9%, up 150 bps from a year ago. Services’ gross margin was 47% compared with 69.7% reported in the year-earlier quarter.
Total operating expenses, as a percentage of revenues, were 61% compared with 70% a year ago.
The operating income margin was 7%, unchanged from the year-ago reported figure. Adjusted EBITDA margin came in at 23% compared with 25% in the prior year.
Balance Sheet
As of Nov 30, 2023, cash and short-term investments were $113.9 million compared with $115.5 million as of Aug 31, 2023.
The company declared a cash dividend of 6 cents per share payable on Feb 5, to stockholders as of Jan 29.
Fiscal 2024 Outlook
Simulations Plus expects revenues to be between $66 million and $69 million. This suggests an increase of 10-15% compared with fiscal 2023 revenues. The company projects Software and Services to consist 55-60% and 40-45% of revenues, respectively. SLP estimates earnings per share to increase in the band of 35-39% year over year and to be between 66 cents and 68 cents.
Currently, Simulations Plus carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Cadence Design Systems (CDNS - Free Report) , NETGEAR (NTGR - Free Report) and Blackbaud (BLKB - Free Report) . While NETGEAR sports a Zacks Rank #1 (Strong Buy), Cadence and Blackbaud carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cadence’s 2023 EPS has remained unchanged in the past 60 days at $5.10. CDNS’ long-term earnings growth rate is 17.9%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of CDNS have gained 64.1% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR were down 23.3% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has improved by 1.3% in the past 60 days to $3.86.
BLKB’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have jumped 41.2% in the past year.