Simulations Plus Q2 results beat expectations but lowers annual profit forecast on tax rate jump

Reuters04-10
<a href="https://laohu8.com/S/SLP">Simulations Plus</a> <a href="https://laohu8.com/S/QTWO">Q2</a> results beat expectations but lowers annual profit forecast on tax rate jump

Overview

  • U.S. drug development software provider's fiscal Q2 revenue grew 8%, beating analyst expectations

  • Adjusted EPS for fiscal Q2 beat consensus, driven by software and services growth

  • Company lowered fiscal 2026 adjusted EPS guidance due to higher expected tax rate

Outlook

  • Simulations Plus cuts fiscal 2026 adj diluted EPS outlook to $0.75-$0.85 from $1.03-$1.10

  • Company maintains fiscal 2026 revenue guidance at $79 mln-$82 mln, growth of 0-4%

  • Simulations Plus sees market conditions as favorable, citing improved funding and client activity

Result Drivers

  • SOFTWARE GROWTH - Q2 software revenue rose 9%, driven by discovery and development solutions, partly offset by a decline in clinical operations software, per CEO Shawn O’Connor

  • SERVICES DEMAND - Services revenue increased 8%, primarily due to development solutions and strong bookings, resulting in an 18% increase in backlog, per CEO Shawn O’Connor

  • FAVORABLE MARKET CONDITIONS - Ongoing most-favored-nation pricing agreements, reduced tariff threats, and improved funding environment benefited clients and supported increased activity, per CEO Shawn O’Connor

Company press release: ID:nBw9s5bc2a

Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

Beat

$24.3 mln

$21.67 mln (7 Analysts)

Q2 Adjusted EPS

Beat

$0.35

$0.20 (4 Analysts)

Q2 Net Income

$4.5 mln

Q2 Adjusted EBITDA

$8.7 mln

Q2 Gross Margin

66%

Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the advanced medical equipment & technology peer group is "buy"

  • Wall Street's median 12-month price target for Simulations Plus Inc is $24.50, about 88.5% above its April 8 closing price of $13.00

  • The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 27 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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