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SLP reported Q2 EPS of 35 cents, beating estimates by 29% and rising from 31 cents last year.
Simulations Plus saw 8% revenue growth, driven by strong demand in drug discovery and development tools.
SLP cut FY2026 EPS outlook to 75-85 cents despite margin expansion and an 18% backlog increase.
Simulations Plus, Inc. (SLP - Free Report) reported second-quarter fiscal 2026 adjusted earnings of 35 cents per share, surpassing the Zacks Consensus Estimate by 29%. The bottom line also compared favorably with the prior-year quarter’s 31 cents.
Simulations Plus reported quarterly revenue of $24.3 million, marking an 8% year-over-year increase. This growth reflects continued demand for its core offerings, especially in drug discovery and development. The software segment remains the backbone of the company’s business model. Growth was driven by strong adoption of discovery and development solutions — areas where AI and modeling tools are becoming increasingly indispensable in biopharma workflows. However, SLP noted a decline in clinical operations software, which appears to be a structural shift rather than a temporary dip.
The company continues to see strong momentum in new client acquisition (logo additions) alongside ongoing upselling efforts, contributing to an 18% increase in backlog and strong visibility into future revenues. On the macro front, management highlighted an improving funding environment for biopharma clients, easing tariff pressures and the growing adoption of new approach methodologies. These factors are driving higher client activity, as reflected in robust renewals and bookings.
The company’s ability to grow both software and services while expanding margins suggests a healthy, scalable business model. In response to the results, SLP’s shares climbed 18% in pre-market today.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Fiscal second-quarter revenues from Software (60% of total quarterly revenues) rose 9% year over year to $14.6 million. Software revenue was led by Development products, mainly GastroPlus and MonolixSuite, which contributed 78%, while Discovery products, primarily ADMET Predictor, accounted for 19%, and Clinical Ops products, led by Proficiency, made up the remaining 3%. SLP ended the quarter with 297 commercial clients, generating average revenue of $124,000 per client and an 91% renewal rate.
SLP’s top 25 customers account for roughly 46% of its total software revenue, with this group remaining highly stable, reflected in 100% logo retention and gross revenue retention exceeding 90%.
Services’ revenues (40%) improved 8% to $9.7 million. For the quarter, development services (biosimulation) made up 77% of services revenues, while commercialization services (Med Comm) accounted for 23%. The company worked on 199 services projects during the quarter, with the ending backlog rising 18% to $24 million, reflecting a healthy and active services pipeline.
SLP’s Margin Expansion
The gross margin in the quarter under review was 66% compared with 59% in the prior-year quarter.
The Software segment’s gross margin was 89% compared with 81% in the prior-year quarter. Software gross margin improved due to higher revenue, especially from Development and Discovery Solutions and lower costs, mainly from reduced amortization following the third-quarter fiscal 2025 impairment. Services’ gross margin was 33%, up from 25%.
Total operating expenses, as a percentage of revenues, were 43% compared with 46% a year ago.
Adjusted EBITDA grew to $8.7 million from $6.6 million in the prior-year quarter. Adjusted EBITDA margin was 36% compared with 29% in the previous-year quarter.
SLP’s Balance Sheet
As of Feb. 28, 2026, cash and short-term investments were $41.8 million compared with $35.7 million as of Nov. 30, 2025.
SLP has no debt as of the end of the fiscal second quarter.
Simulations Plus continues to expect revenues to be between $79 million and $82 million. This indicates an increase of 0-4% from fiscal 2025 revenues.
The company expects the Software segment mix to be 57-62% of total revenues and adjusted EBITDA margin between 26% and 30% same as the prior view.
Despite strong operational performance, Simulations Plus lowered its adjusted EPS guidance. The previous view was $1.03–$1.10, while the new range is 75–85 cents.
Recent Performance of Other Companies in Tech Space
BlackBerry Limited (BB - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 6 cents. The figure beat the company’s estimate of 3-5 cents. In the year-ago quarter, it reported a non-GAAP EPS of 3 cents. The Zacks Consensus Estimate was pegged at 5 cents per share. BlackBerry reported quarterly revenue of $156 million, surpassing the top end of its guidance ($138-$148 million), driven by stronger-than-expected sales across both its QNX and Secure Communications divisions. Revenue also increased 10% year over year.
Guidewire Software, Inc. (GWRE - Free Report) reported non-GAAP earnings per share of $1.17 for the second-quarter fiscal 2026 (ended Jan. 31, 2026) compared with 51 cents in the same period last year. Earnings surpassed the Zacks Consensus Estimate of 77 cents. The company reported revenues of $359.1 million, up 24% year over year. Revenues beat the Zacks Consensus Estimate by 4.8%. The figure also surpassed the company’s guided range of $339-$345 million. This uptick was driven by solid momentum across all business segments.
Autodesk (ADSK - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.85 per share, which beat the Zacks Consensus Estimate by 8.37% and increased 25% year over year. The company reported revenues of $1.95 billion, which beat the consensus mark by 2.48% and grew 19% year over year, both on a reported and constant currency (cc) basis.
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Simulations Plus Q2 Earnings & Revenues Beat, Jump Y/Y, Shares Soar
Key Takeaways
Simulations Plus, Inc. (SLP - Free Report) reported second-quarter fiscal 2026 adjusted earnings of 35 cents per share, surpassing the Zacks Consensus Estimate by 29%. The bottom line also compared favorably with the prior-year quarter’s 31 cents.
Simulations Plus reported quarterly revenue of $24.3 million, marking an 8% year-over-year increase. This growth reflects continued demand for its core offerings, especially in drug discovery and development. The software segment remains the backbone of the company’s business model. Growth was driven by strong adoption of discovery and development solutions — areas where AI and modeling tools are becoming increasingly indispensable in biopharma workflows. However, SLP noted a decline in clinical operations software, which appears to be a structural shift rather than a temporary dip.
The company continues to see strong momentum in new client acquisition (logo additions) alongside ongoing upselling efforts, contributing to an 18% increase in backlog and strong visibility into future revenues. On the macro front, management highlighted an improving funding environment for biopharma clients, easing tariff pressures and the growing adoption of new approach methodologies. These factors are driving higher client activity, as reflected in robust renewals and bookings.
The company’s ability to grow both software and services while expanding margins suggests a healthy, scalable business model. In response to the results, SLP’s shares climbed 18% in pre-market today.
Simulations Plus, Inc. Price, Consensus and EPS Surprise
Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote
SLP’s Strong Top-Line Growth Led by Core Segments
Fiscal second-quarter revenues from Software (60% of total quarterly revenues) rose 9% year over year to $14.6 million. Software revenue was led by Development products, mainly GastroPlus and MonolixSuite, which contributed 78%, while Discovery products, primarily ADMET Predictor, accounted for 19%, and Clinical Ops products, led by Proficiency, made up the remaining 3%. SLP ended the quarter with 297 commercial clients, generating average revenue of $124,000 per client and an 91% renewal rate.
SLP’s top 25 customers account for roughly 46% of its total software revenue, with this group remaining highly stable, reflected in 100% logo retention and gross revenue retention exceeding 90%.
Services’ revenues (40%) improved 8% to $9.7 million. For the quarter, development services (biosimulation) made up 77% of services revenues, while commercialization services (Med Comm) accounted for 23%. The company worked on 199 services projects during the quarter, with the ending backlog rising 18% to $24 million, reflecting a healthy and active services pipeline.
SLP’s Margin Expansion
The gross margin in the quarter under review was 66% compared with 59% in the prior-year quarter.
The Software segment’s gross margin was 89% compared with 81% in the prior-year quarter. Software gross margin improved due to higher revenue, especially from Development and Discovery Solutions and lower costs, mainly from reduced amortization following the third-quarter fiscal 2025 impairment. Services’ gross margin was 33%, up from 25%.
Total operating expenses, as a percentage of revenues, were 43% compared with 46% a year ago.
Adjusted EBITDA grew to $8.7 million from $6.6 million in the prior-year quarter. Adjusted EBITDA margin was 36% compared with 29% in the previous-year quarter.
SLP’s Balance Sheet
As of Feb. 28, 2026, cash and short-term investments were $41.8 million compared with $35.7 million as of Nov. 30, 2025.
SLP has no debt as of the end of the fiscal second quarter.
SLP Fiscal 2026 Revenue View Reaffirmed, EPS Guidance Cut
Simulations Plus continues to expect revenues to be between $79 million and $82 million. This indicates an increase of 0-4% from fiscal 2025 revenues.
The company expects the Software segment mix to be 57-62% of total revenues and adjusted EBITDA margin between 26% and 30% same as the prior view.
Despite strong operational performance, Simulations Plus lowered its adjusted EPS guidance. The previous view was $1.03–$1.10, while the new range is 75–85 cents.
SLP’s Zacks Rank
Currently, Simulations Plus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in Tech Space
BlackBerry Limited (BB - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 6 cents. The figure beat the company’s estimate of 3-5 cents. In the year-ago quarter, it reported a non-GAAP EPS of 3 cents. The Zacks Consensus Estimate was pegged at 5 cents per share. BlackBerry reported quarterly revenue of $156 million, surpassing the top end of its guidance ($138-$148 million), driven by stronger-than-expected sales across both its QNX and Secure Communications divisions. Revenue also increased 10% year over year.
Guidewire Software, Inc. (GWRE - Free Report) reported non-GAAP earnings per share of $1.17 for the second-quarter fiscal 2026 (ended Jan. 31, 2026) compared with 51 cents in the same period last year. Earnings surpassed the Zacks Consensus Estimate of 77 cents. The company reported revenues of $359.1 million, up 24% year over year. Revenues beat the Zacks Consensus Estimate by 4.8%. The figure also surpassed the company’s guided range of $339-$345 million. This uptick was driven by solid momentum across all business segments.
Autodesk (ADSK - Free Report) reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.85 per share, which beat the Zacks Consensus Estimate by 8.37% and increased 25% year over year. The company reported revenues of $1.95 billion, which beat the consensus mark by 2.48% and grew 19% year over year, both on a reported and constant currency (cc) basis.