Simulations Plus' Q4 Earnings & Sales Meet Estimates, Fall Y/Y

Simulations Plus, Inc. SLP reported fourth-quarter fiscal 2025 adjusted earnings of 10 cents per share, matching the Zacks Consensus Estimate. The bottom line, however, compared unfavorably with the prior-year quarter’s 18 cents.

Quarterly revenues declined 6% year over year to $17.5 million due to reduced software revenues. The top line matched the consensus mark. Shifting market dynamics, cautious biopharma spending and a strategic pivot toward cloud, AI and integrated workflows are likely to shape the company’s next stage of growth. Despite revenue pressure in the fourth quarter, Simulations Plus met its revised fiscal 2025 guidance and delivered full-year growth in key performance metrics, highlighting its operational resilience and evolving product strategy.

For fiscal 2025, Simulations Plus’ revenues grew 13% to $79.2 million.

Despite near-term softness, management noted accelerating demand for cloud deployment and scale, AI-assisted workflows, interoperability across modeling platforms and strong compliance and identity frameworks. These are becoming essential requirements for enterprise customers who want to streamline modeling-heavy workflows and adopt integrated simulation ecosystems.

Shares of the company have lost 39% in the past six months against the Zacks Computer - Software industry's growth of 1.5%.

SLP’s Quarter in Details

Fiscal fourth-quarter revenues from Software (52% of total quarterly revenues) plunged 9% year over year to $9 million, due to tough market conditions and ongoing customer consolidation. ADMET Predictor revenue fell 10% year over year for the quarter, while GastroPlus posted a 3% decline.

Software revenues were composed of 18% from Discovery tools (mainly ADMET Predictor), 77% from Development solutions (led by GastroPlus and MonolixSuite) and 5% from Clinical Operations products (primarily Pro-ficiency).

SLP closed the quarter with 311 commercial customers, generating an average of $94,000 per client and posting an 83% renewal rate.

Simulations Plus, Inc. Price, Consensus and EPS Surprise

Simulations Plus, Inc. price-consensus-eps-surprise-chart | Simulations Plus, Inc. Quote

Services’ revenues (48%) tumbled 3% to $8.4 million, affected by a 10% fall in PBPK and a 50% plunge in QSP. For the quarter, development services (biosimulation) made up 77% of services revenues, while commercialization services (Med Comm) accounted for 23%.

SLP completed 191 service projects this quarter, and the backlog grew 28% year over year to $18 million. The pipeline remains solid, with roughly 90% of the backlog expected to turn into revenue within a year.

SLP’s Operating Details

Gross profit during the quarter was $9.8 million, with a 56% gross margin compared with $6.8 million and a margin of 37% in the prior year.

Adjusted EBITDA declined to $3.5 million from $4.1 million in the prior-year quarter.

Adjusted EBITDA margin was 20% compared with 22% in the previous-year quarter.

Balance Sheet

As of Aug. 31, 2025, cash and short-term investments were $32.4 million compared with $20.3 million a year ago.

Fiscal 2026 Outlook: Modest Growth With Upside Potential

For fiscal 2026, management expects low single-digit revenue growth at the mid-point of guidance, continued cautious spending across the customer base and potential upside if the macro environment improves.

It expects revenues to be between $79 million and $82 million, up 0-4% year over year. The company expects the Software segment mix to be 57-62% of total revenues.

SLP estimates adjusted earnings per share to be in the band of $1.03 to $1.10 and adjusted EBITDA margin between 26% and 30%.

SLP also expects first-quarter fiscal 2026 revenues to be within 3-5%, declining year over year.

SLP’s Zacks Rank

Currently, Simulations Plus sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Performance of Peer Firms

Blackbaud, Inc. BLKB reported third-quarter 2025 non-GAAP earnings per share (EPS) of $1.10, which surpassed the Zacks Consensus Estimate by 2.8%. The bottom line increased around 11.1% year over year. Total revenues decreased 1.9% year over year to $281.1 million. This was due to the divestiture of EVERFI. The top line surpassed the Zacks Consensus Estimate by 0.5%.

Cadence Design Systems CDNS reported third-quarter 2025 non-GAAP earnings per share of $1.93, which beat the Zacks Consensus Estimate by 7.8%. The bottom line increased 17.7% year over year, exceeding management’s guided range of $1.75-$1.81. Revenues of $1.339 billion beat the Zacks Consensus Estimate by 0.9% and increased 10.2% year over year. The figure also beat the management’s guided range of $1.305-$1.335 billion.

SAP SE SAP reported third-quarter 2025 non-IFRS earnings of €1.59 ($1.86) per share, climbing 29% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.69. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues on a non-IFRS basis of €9.08 billion ($10.6 billion), representing a 7% year-over-year increase (up 11% at constant currency or cc). The Zacks Consensus Estimate was pegged at $10.56 billion.

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