Simulations Plus reports Q2 EPS 20c, consensus 19c

Reports Q2 revenue $18.3M, consensus $17.3M. CEO Shawn O’Connor says: “Our second quarter results reflected strong performance in both our software and services segments. Total revenue increased 16%, driven by higher software revenues in our Clinical Pharmacology & Pharmacometrics business unit and the Cheminformatics business unit, whose ADMET Predictor(R) platform continued to gain adoption and added another new Artificial Intelligence biotech customer in the second quarter. Services revenue growth was primarily driven by higher revenues in our Quantitative Systems Pharmacology and Physiologically Based Pharmacokinetics business units. Since the beginning of calendar 2024, we have seen encouraging signs in biotech funding with notable strength from biotech companies that have candidates undergoing clinical trials. Regarding large pharmaceutical companies, funding continues to vary depending on their near-term direction and business outlook, but the overall market is healthier compared to a year ago. For the balance of 2024, we remain cautiously optimistic that demand for our comprehensive suite of modeling and simulation software products and services will continue to gain momentum as the funding environment improves. During the quarter, we also launched our corporate development initiative to intensify our focus on strategic investments and partnerships in early-state technology companies. While strategic acquisitions to complement organic growth remain a priority, we believe there are hidden gems among early-stage companies developing high-potential technologies. We believe that our ability to identify and evaluate commercial applications for emerging technologies will complement our own R&D efforts and position Simulations Plus at the forefront of innovation. Our strong performance in the first half of the year, combined with market improvement, puts us on track to achieve our guidance for fiscal 2024. We entered the third quarter with a healthy pipeline and a solid balance sheet, and we are confident that Simulations Plus is firmly positioned to advance its critical role in drug development workflow. Our unwavering focus remains on delivering disciplined growth and achieving long-term returns for our shareholders.”