Simulations Plus (SLP) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue grew 18% year-over-year to $70M, with diluted EPS at $0.49 and adjusted diluted EPS at $0.53, supported by strong organic growth and the Pro-ficiency acquisition, which doubled the addressable market to $8B.

• Fourth quarter revenue increased 19% to $18.7M, with net income of $0.8M and diluted EPS of $0.04.

• Services revenue outpaced software, with services growing 26% and comprising 41% of FY24 revenue, while software grew 12% and represented 59%.

• Backlog at year-end was $14.1M, with 90% expected to convert to revenue within 12 months.

• Continued leadership in biosimulation, with major software upgrades and strategic acquisitions expanding the portfolio.

Financial highlights

• FY24 gross margin was 62%, down from 80% in FY23, mainly due to lower margins in acquired businesses and service mix.

• Adjusted EBITDA for FY24 was $20.3M (29% of revenue), with Q4 adjusted EBITDA at $4.1M (22%).

• Net income for FY24 was $10M (14% of revenue), with Q4 net income at $0.8M.

• Adjusted diluted EPS for FY24 was $0.53, down from $0.67 in FY23, reflecting higher operating expenses and lower gross margin.

• Cash and short-term investments at year-end were $10.3M–$20.3M, reflecting acquisition spending.

Outlook and guidance

• Fiscal 2025 guidance: total revenue $90M–$93M (28%–33% growth), software mix 55%–60%, adjusted EBITDA margin 31%–33%, adjusted diluted EPS $1.07–$1.20.

• Organic growth expected at 10%–15%, with Pro-ficiency contributing $15M–$18M.

• Effective tax rate for 2025 expected at 23%–25%.

• Q1 is seasonally lowest for revenue and profitability.