Mon, Jul 8, 12:58 PM (61 days ago)
Simulations Plus, Inc. reported a 14% increase in quarterly revenue to $18.5 million, driven by growth in both software (12%) and services (18%) segments. However, the cost of revenues surged by 79%, primarily due to increased compensation and structural reorganization, leading to a stable gross profit of $13.3 million but a decreased gross margin of 71% from 82%. Operating expenses rose by 24%, with notable increases in research and development (38%), sales and marketing (43%), and general and administrative expenses (17%). Consequently, income from operations fell by 54% to $1.9 million. The company also reported a significant increase in other income, largely due to higher interest income and a favorable adjustment in contingent consideration. Net income dropped by 22% to $3.1 million. Cash and cash equivalents more than doubled to $109.1 million, bolstered by strong operating cash flow and strategic investment activities. The recent acquisition of Pro-ficiency for $100 million is expected to influence future financials.