Fri, Apr 4, 11:57 AM (23 days ago)
**Simulations Plus, Inc. (SLP) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Q1 2025 revenue increased by 23% to $22.4 million, driven by a 16% increase in software-related revenue and a 34% increase in service-related revenue. For the six months, revenue increased by 26% to $41.4 million. - **Profit Margins:** Gross profit remained consistent at $13.1 million for Q1 2025, with an overall gross margin of 59%. For the six months, gross profit increased by 1% to $23.3 million, with a gross margin of 56%. - **Net Income:** Net income decreased by 24% to $3.1 million for Q1 2025. For the six months, net income decreased by 45% to $3.3 million. - **Cash Flow:** Operating cash flow was $4.4 million for the six months, a decrease of $1.6 million compared to the previous year. **Key Metrics and Trends:** - **Earnings per Share (EPS):** Basic EPS was $0.15 for Q1 2025, down from $0.20 in Q1 2024. For the six months, basic EPS was $0.16, down from $0.30. - **Operating Expenses:** Total operating expenses increased by 19% to $10.4 million for Q1 2025. Research and development expenses increased by 38%, while sales and marketing expenses increased by 91%. - **Acquisitions:** The company completed the acquisition of Pro-ficiency, which contributed to the increase in revenue and expenses. The final payment of $1.6 million related to the Immunetrics acquisition was also made. **Future Operations and Uncertainties:** - **Liquidity:** The company expects existing cash, cash equivalents, and short-term investments to be sufficient to fund operations and capital expenditures for the next 12 months. - **Strategic Opportunities:** The company continues to seek strategic acquisitions and investments, which may require a substantial portion of cash reserves. - **Regulatory and Market Risks:** The company faces risks related to regulatory changes, market competition, and the integration of acquired businesses. **Segment Performance:** - **Software:** Represented 60% of total revenue for Q1 2025, with a gross margin of 81%. For the six months, software revenue increased by 26%, with a gross margin of 78%. - **Services:** Represented 40% of total revenue for Q1 2025, with a gross margin of 25%. For the six months, service revenue increased by 26%, with a gross margin of 25%. **Geographical Revenue:** - **Americas:** Accounted for 72% of total revenue for Q1 2025, with 74% for the six months. - **EMEA:** Accounted for 21% of total revenue for Q1 2025, with 18% for the six months. - **Asia Pacific:** Accounted for 7% of total revenue for Q1 2025, with 8% for the six months. **Conclusion:** Simulations Plus, Inc. demonstrated growth in revenue for Q1 2025, driven by strategic acquisitions and increased service-related revenue. However, the company faced challenges in maintaining profit margins and net income due to higher operating expenses. The company remains focused on strategic opportunities and managing liquidity to support future growth.