The following is a summary of the Simulations Plus, Inc. (SLP) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 FY2024 total revenue increased 14% to $18.5 million.

• Software revenue increased 12%, while Services revenue increased 18%.

• Gross margin for Q3 was 71%, down from 82% last year, mainly due to a shift in Services personnel to cost of revenue.

• Net income for Q3 was $3.1 million, representing a decrease from the previous year.

• Diluted earnings per share were $0.15, and adjusted diluted earnings per share were $0.19.

Business Progress:

• Launched GPX, a new generation software for pharmacokinetics modeling, receiving positive initial client reactions.

• Announced the acquisition of Pro-ficiency, expanding offerings across the drug development continuum.

• Experiencing solid bookings and a healthy pipeline, with a backlog of $19.6 million.

• Anticipate revenue from backlog within the next 12 months to increase to approximately 91%.

Opportunities:

• Continued recovery in biotech funding presents opportunities for increased revenue, particularly with Pro-ficiency integration.

• Market improvements and a positive shift in biotech funding environments may boost future bookings and revenue.

Risks:

• Variable spending patterns among large pharmaceutical clients reflect continued market caution, potentially impacting revenue consistency.

• Delays in client source data affecting PBPK services could disrupt expected revenue flow.

More details: Simulations Plus IR

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