Simulations Plus (NASDAQ: SLP) boosts Q2 profit but cuts EPS outlook
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Simulations Plus reported a strong second quarter of fiscal 2026, but cut its full‑year EPS outlook. Revenue for the quarter ended February 28, 2026 rose 8% to $24.3 million, with software up 9% to $14.6 million and services up 8% to $9.7 million.
Gross profit increased to $16.1 million and gross margin expanded to 66% from 59%. Net income grew to $4.5 million, or $0.22 diluted EPS, versus $3.1 million and $0.15 a year earlier. Adjusted EBITDA was $8.7 million, a 36% margin, compared with $6.6 million and a 29% margin.
For the first six months, revenue rose 3% to $42.7 million, as a 3% decline in software revenue to $23.5 million was offset by 12% growth in services to $19.2 million. The company now guides fiscal 2026 adjusted diluted EPS to $0.75–$0.85, down from $1.03–$1.10, reflecting a higher expected effective tax rate of 23–25% instead of 12–14%, while maintaining prior revenue, mix, and margin targets of $79–$82 million revenue, 0–4% growth, 57–62% software mix, and 26–30% adjusted EBITDA margin. Cash and short‑term investments were $41.8 million as of February 28, 2026.
Positive
- Q2 profitability and margins improved significantly. Revenue grew 8% to $24.3M, gross margin expanded from 59% to 66%, net income rose to $4.5M, diluted EPS increased to $0.22, and adjusted EBITDA climbed to $8.7M with margin rising from 29% to 36%.
Negative
- Full-year adjusted EPS guidance was cut materially. Adjusted diluted EPS guidance was reduced from $1.03–$1.10 to $0.75–$0.85, reflecting a higher expected effective tax rate of 23–25% versus 12–14%, which lowers anticipated fiscal 2026 earnings.
Insights
Operating trends improved in Q2, but EPS guidance was cut on higher taxes.
Simulations Plus delivered solid Q2 results with revenue up 8% to $24.3 million and notable margin expansion. Gross margin rose to 66% from 59%, and adjusted EBITDA reached $8.7 million, a 36% margin versus 29% a year earlier.
Profitability improved meaningfully: net income increased to $4.5 million and diluted EPS to $0.22, while adjusted diluted EPS rose to $0.35. Services revenue grew faster than software on a year‑to‑date basis, and management highlighted approximately 18% growth in backlog, indicating healthy contracted work.
The main negative is guidance. Full‑year adjusted diluted EPS guidance was reduced from $1.03–$1.10 to $0.75–$0.85, driven by an expected effective tax rate increase to 23–25% from 12–14%. Revenue guidance of $79–$82 million and a 26–30% adjusted EBITDA margin were reiterated, suggesting the downgrade is tax‑driven rather than operational, but still materially lowers expected earnings.
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 total revenue: $24.3M
Q2 2026 net income: $4.5M
Q2 2026 diluted EPS: $0.22
+5 more
8 metrics
Q2 2026 total revenue
$24.3M
Quarter ended February 28, 2026; up 8% year over year
Q2 2026 net income
$4.5M
Quarter ended February 28, 2026, versus $3.1M prior year
Q2 2026 diluted EPS
$0.22
Quarter ended February 28, 2026; up from $0.15 a year earlier
Q2 2026 gross margin
66%
Quarter ended February 28, 2026; previously 59%
Q2 2026 adjusted EBITDA
$8.7M
Quarter ended February 28, 2026; 36% of revenue vs 29% prior year
FY 2026 revenue guidance
$79M–$82M
Fiscal 2026 outlook; implies 0–4% revenue growth
FY 2026 adjusted diluted EPS guidance
$0.75–$0.85
Reduced from prior $1.03–$1.10 due to higher tax rate
Cash and short-term investments
$41.8M
As of February 28, 2026, combined cash and short-term investments
Key Terms
Adjusted EBITDA, Adjusted diluted EPS, non-GAAP financial measures, backlog, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA of $8.7 million, representing 36% of total revenue, compared to $6.6 million, representing 29% of total revenue"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Adjusted diluted EPS financial
"Adjusted diluted EPS of $0.35 compared to adjusted diluted EPS of $0.31"
Adjusted diluted EPS is a company’s profit per share after adding back or removing one-time items (like restructuring costs or gains) and dividing by the number of shares including potential shares from options and convertible securities. Investors use it as a cleaner view of ongoing earnings—like looking at a car’s regular fuel efficiency rather than a trip boosted by downhill coasting—to judge underlying performance and compare companies without temporary distortions.
non-GAAP financial measures financial
"This press release contains “non-GAAP financial measures,” which are measures that either exclude or include amounts"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
backlog financial
"bookings were strong during the quarter, resulting in an approximately 18% increase in backlog"
A backlog is the amount of work or orders that a company has received but hasn't completed yet. It’s like a restaurant with many dishes to serve; the backlog shows how many orders are still waiting to be finished. It matters because a large backlog can indicate strong demand or potential delays in delivering products or services.
model-informed and AI-accelerated drug development technical
"a global leader in model-informed and AI-accelerated drug development that advances biopharma innovation"
Earnings Snapshot
Revenue: $24.3M · Guidance included
Q2 2026
Revenue
$24.3M
+8% YoY
Net income
$4.5M
Diluted EPS
$0.22
Adjusted EBITDA
$8.7M
Adjusted diluted EPS
$0.35
Guidance
For fiscal 2026, the company guides revenue to $79M–$82M (0–4% growth), software mix of 57–62%, adjusted EBITDA margin of 26–30%, and adjusted diluted EPS of $0.75–$0.85, reduced from a prior $1.03–$1.10 range due to a higher expected effective tax rate.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Date of the earliest event reported)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition
On April 9, 2026, Simulations Plus, Inc., a California corporation (the “Company”), issued a press release announcing financial results for its second quarter ended February 28, 2026. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).
Item 7.01 Regulation FD Disclosure
On April 9, 2026, the Company held an investor conference call reporting its financial results for its second quarter ended February 28, 2026. The PowerPoint presentation, which was used for this investor conference call, is attached as Exhibit 99.2 to this Report.
In accordance with General Instructions B.2 of Form 8-K, the information in this Report, including Exhibits 99.1 and 99.2 (together, the “Exhibits”), is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Report.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This Report, including the disclosures set forth herein and in the Exhibits attached hereto, contains certain forward-looking statements that involve substantial risks and uncertainties. When used herein, the terms “anticipates,” “expects,” “estimates,” “believes” and similar expressions, as they relate to us or our management, are intended to identify such forward-looking statements.
Forward-looking statements in this Report or reports hereafter furnished, including in other publicly available documents filed with the Securities and Exchange Commission (the “Commission”), to the Company’s stockholders and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management’s best estimates based upon current conditions and the most recent results of operations. These risks include, but are not limited to, the risks set forth herein and in such other documents filed with the Commission, each of which could adversely affect our business and the accuracy of the forward-looking statements contained herein. Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press release issued on April 9, 2026. | ||||
| 99.2 | PowerPoint presentation used at the Investor Conference Call on April 9, 2026. | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SIMULATIONS PLUS, INC. | |||||
Dated: April 9, 2026 | By: /s/ Will Frederick | ||||
| Will Frederick | |||||
| Executive Vice President and Chief Financial Officer | |||||
2
Exhibit 99.1
Simulations Plus Reports Second Quarter Fiscal 2026 Financial Results
Revenue grew 8% with increases in both software and services
RESEARCH TRIANGLE PARK, NC, April 9, 2026 – Simulations Plus, Inc. (Nasdaq: SLP) (“Simulations Plus” or the “Company”), a global leader in model-informed and AI-accelerated drug development that advances biopharma innovation, today reported financial results for its second quarter fiscal 2026, ended February 28, 2026.
Second Quarter 2026 Financial Highlights (as compared to second quarter 2025)
•Total revenue increased 8% to $24.3 million
•Software revenue increased 9% to $14.6 million, representing 60% of total revenue
•Services revenue increased 8% to $9.7 million, representing 40% of total revenue
•Gross profit was $16.1 million and gross margin was 66%, compared to $13.1 million and 59%
•Net income of $4.5 million and diluted earnings per share of $0.22, compared to net income of $3.1 million and diluted EPS of $0.15
•Adjusted EBITDA of $8.7 million, representing 36% of total revenue, compared to $6.6 million, representing 29% of total revenue
•Adjusted net income of $7.0 million and adjusted diluted EPS of $0.35 compared to adjusted net income of $6.2 million and adjusted diluted EPS of $0.31
Six Months 2026 Financial Highlights (as compared to six months 2025)
•Total revenue increased 3% to $42.7 million
•Software revenue decreased 3% to $23.5 million, representing 55% of total revenue
•Services revenue increased 12% to $19.2 million, representing 45% of total revenue
•Gross profit was $27.0 million and gross margin was 63%, compared to $23.3 million and 56%
•Net income of $5.2 million and diluted earnings per share of $0.26, compared to net income of $3.3 million and diluted EPS of $0.16
•Adjusted EBITDA of $12.3 million, representing 29% of total revenue, compared to $11.1 million, representing 27% of total revenue
•Adjusted net income of $9.6 million and adjusted diluted EPS of $0.48, approximately equivalent to the same period last year
Management Commentary
“We delivered solid second quarter results, with revenue increasing by 8%,” said Shawn O’Connor, CEO of Simulations Plus. “Software growth was driven by strong performance in discovery and development solutions, partially offset by an anticipated decline in clinical operations software. We also saw continued success with new logo additions and client upsells. Services revenue growth was primarily driven by development solutions and bookings were strong during the quarter, resulting in an approximately 18% increase in backlog.”
“Market conditions remain favorable. Globally, ongoing most-favored-nation pricing agreements, reduced tariff threats, and an improving funding environment are benefiting our clients. In addition, we believe recent supplemental guidance on new approach methodologies is supporting increased client activity. We are seeing this reflected in strong software renewals, logo activity, and services bookings. Overall, we are pleased with our
first‑half fiscal 2026 performance and encouraged by the momentum we see across the business,” concluded O’Connor.
Fiscal 2026 Guidance
The Company is adjusting its guidance range for adjusted diluted EPS from a range of $1.03 - $1.10 to $0.75 - $0.85 to reflect an increase in the expected effective tax rate for fiscal 2026 from 12-14% to 23-25%. All other previously issued guidance metrics remain unchanged.
| Fiscal 2026 Guidance | ||||||||
| Revenue | $79M - $82M | |||||||
| Revenue growth | 0 - 4% | |||||||
| Software mix | 57 - 62% | |||||||
| Adjusted EBITDA margin | 26 - 30% | |||||||
| Adjusted diluted EPS | $0.75 - $0.85 | |||||||
Webcast and Conference Call Details
Shawn O’Connor, Chief Executive Officer, and Will Frederick, Executive Vice President and Chief Financial Officer, will host a conference call and webcast today, April 9 at 5:00 p.m. Eastern Time to discuss the results and certain forward-looking information. The call may be accessed by registering here or by calling 1-877-451-6152 (domestic) or 1-201-389-0879 (international). The webcast can be accessed on the investor relations page of the Simulations Plus website https://www.simulations-plus.com/investorscorporate-profile/corporate-profile/ where it will also be available for replay approximately one hour following the call.
Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures,” which are measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
A further explanation and reconciliation of these non-GAAP financial measures is included below and in the financial tables in this release.
The Company believes that the non-GAAP financial measures presented facilitate an understanding of operating performance and provide a meaningful comparison of its results between periods. The Company’s management uses non-GAAP financial measures to, among other things, evaluate its ongoing operations in relation to historical results, for internal planning and forecasting purposes, and in the calculation of performance-based compensation. Adjusted EBITDA and Adjusted Diluted EPS represent measures that we believe are customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that these measures are useful in evaluating our core operating results. However, Adjusted EBITDA and Adjusted Diluted EPS are not measures of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income, operating income, or diluted EPS as indicators of our operating performance or to net cash provided by operating activities as a measure of our liquidity. We believe the Company’s Adjusted EBITDA and Adjusted Diluted EPS measures provide information that is directly comparable to that provided by other peer companies in our industry, but other companies may calculate non-GAAP financial results differently, particularly related to nonrecurring, unusual items.
Please note that the Company has not reconciled the adjusted EBITDA or adjusted diluted earnings per share forward-looking guidance included in this press release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to costs related to acquisitions, financings, and employee stock compensation programs, which are potential
adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
Adjusted EBITDA
Adjusted EBITDA represents net income excluding the effect of interest expense (income), provision (benefit) for income taxes, depreciation and amortization, equity-based compensation expense, loss (gain) on currency exchange, impairment charges, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense, and other items not indicative of our ongoing operating performance.
Adjusted Net Income and Adjusted Diluted EPS
Adjusted net income and adjusted diluted earnings per share exclude the effect of amortization, equity-based compensation expense, loss (gain) on currency exchange, impairment charges, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense, and other items not indicative of our ongoing operating performance as well as the income tax provision adjustment for such charges.
The Company excludes the above items because they are outside of the Company’s normal operations and/or, in certain cases, are difficult to forecast accurately.
About Simulations Plus, Inc.
Simulations Plus is a global leader in model-informed and AI-accelerated drug development. We create value for our clients by accelerating the discovery, development, and commercialization of pharmaceuticals and other products through innovative science-based software and consulting solutions. For more information, visit www.simulations-plus.com.
Forward-Looking Statements
Except for historical information, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties. Words like “believe,” “will”, “can”, “believe”, “expect,” “anticipate,” and similar expressions (or the negative of such terms, as well as other words or expressions referencing future events, conditions, or circumstances) mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Forward-looking statements include but are not limited to statements regarding our fiscal year 2026 guidance, revenue growth, anticipated margins and profitability, demand to software and services, the impact of pricing actions, client spending levels, market conditions, the development, capabilities, regulatory acceptance and commercialization of AI-enabled and could-based solutions, the timing and content of product initiatives discussed at Investor Day, and our ability to execute our long-term strategic vision. These forward-looking statements are based on current assumptions and expectations that involve risks and uncertainties that could cause the actual results to differ materially from those expressed or implied. Factors that could cause or contribute to such differences include, but are not limited to: effectiveness of our internal operational structure, our ability to maintain our competitive advantages and commercialize AI and cloud-enabled solutions, evolving regulatory and data privacy standards governing AI technologies, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, market conditions, macroeconomic factors, and a sustainable market. Further information on our risk factors is contained in our quarterly, annual, and current reports and filed with the U.S. Securities and Exchange Commission.
Investor Relations Contact:
Lisa Fortuna
Financial Profiles
310-622-8251
slp@finprofiles.com
1
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (in thousands, except per common share and common share data) | February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | ||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Software | $ | 14,635 | $ | 13,484 | $ | 23,518 | $ | 24,199 | ||||||||||||||||||
| Services | 9,656 | 8,948 | 19,194 | 17,157 | ||||||||||||||||||||||
| Total revenues | 24,291 | 22,432 | 42,712 | 41,356 | ||||||||||||||||||||||
| Cost of revenues | ||||||||||||||||||||||||||
| Software | 1,648 | 2,587 | 3,060 | 5,225 | ||||||||||||||||||||||
| Services | 6,500 | 6,718 | 12,618 | 12,786 | ||||||||||||||||||||||
| Total cost of revenues | 8,148 | 9,305 | 15,678 | 18,011 | ||||||||||||||||||||||
| Gross profit | 16,143 | 13,127 | 27,034 | 23,345 | ||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Research and development | 3,470 | 2,143 | 6,450 | 3,991 | ||||||||||||||||||||||
| Sales and marketing | 2,930 | 3,717 | 6,109 | 6,568 | ||||||||||||||||||||||
| General and administrative | 4,113 | 4,555 | 8,132 | 9,948 | ||||||||||||||||||||||
| Total operating expenses | 10,513 | 10,415 | 20,691 | 20,507 | ||||||||||||||||||||||
| Income from operations | 5,630 | 2,712 | 6,343 | 2,838 | ||||||||||||||||||||||
| Other income, net | 256 | 796 | 513 | 940 | ||||||||||||||||||||||
| Income before income taxes | 5,886 | 3,508 | 6,856 | 3,778 | ||||||||||||||||||||||
| Income tax expense | (1,351) | (434) | (1,645) | (498) | ||||||||||||||||||||||
| Net income | $ | 4,535 | $ | 3,074 | $ | 5,211 | $ | 3,280 | ||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||
| Basic | $ | 0.22 | $ | 0.15 | $ | 0.26 | $ | 0.16 | ||||||||||||||||||
| Diluted | $ | 0.22 | $ | 0.15 | $ | 0.26 | $ | 0.16 | ||||||||||||||||||
| Weighted-average common shares outstanding | ||||||||||||||||||||||||||
| Basic | 20,160 | 20,097 | 20,150 | 20,082 | ||||||||||||||||||||||
| Diluted | 20,243 | 20,277 | 20,232 | 20,262 | ||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | 11 | (26) | 5 | (68) | ||||||||||||||||||||||
| Unrealized gains (losses) on available-for-sale securities | (6) | — | (6) | 4 | ||||||||||||||||||||||
| Comprehensive income | $ | 4,540 | $ | 3,048 | $ | 5,210 | $ | 3,216 | ||||||||||||||||||
2
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in thousands, except per common share and common share data) | February 28, 2026 | August 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 25,727 | $ | 30,853 | ||||||||||
Accounts receivable, net of allowance for credit losses of $73 and $187 | 18,170 | 9,717 | ||||||||||||
| Prepaid income taxes | 669 | 1,777 | ||||||||||||
| Prepaid expenses and other current assets | 6,885 | 7,702 | ||||||||||||
| Short-term investments | 16,109 | 1,500 | ||||||||||||
| Total current assets | 67,560 | 51,549 | ||||||||||||
| Long-term assets | ||||||||||||||
| Capitalized computer software development costs, net of accumulated amortization of $23,543 and $21,863 | 11,158 | 11,117 | ||||||||||||
| Property and equipment, net | 752 | 880 | ||||||||||||
| Operating lease right-of-use assets | 373 | 407 | ||||||||||||
Intellectual property, net of accumulated amortization of $9,555 and $9,021 | 5,663 | 6,197 | ||||||||||||
Other intangible assets, net of accumulated amortization of $4,904 and $4,399 | 11,327 | 11,896 | ||||||||||||
| Goodwill | 43,717 | 43,717 | ||||||||||||
| Deferred tax assets, net | 4,589 | 4,774 | ||||||||||||
| Other assets | 1,345 | 1,399 | ||||||||||||
| Total assets | $ | 146,484 | $ | 131,936 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | 803 | $ | 470 | ||||||||||
| Accrued compensation | 4,398 | 2,010 | ||||||||||||
| Accrued expenses | 1,474 | 1,343 | ||||||||||||
| Operating lease liability - current portion | 138 | 206 | ||||||||||||
| Deferred revenue | 5,530 | 2,696 | ||||||||||||
| Total current liabilities | 12,343 | 6,725 | ||||||||||||
| Long-term liabilities | ||||||||||||||
| Operating lease liability - net of current portion | 370 | 410 | ||||||||||||
| Total liabilities | 12,713 | 7,135 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Shareholders' equity | ||||||||||||||
| Preferred stock, $0.001 par value — 10,000,000 shares authorized; no shares issued and outstanding | $ | — | $ | — | ||||||||||
| Common stock, $0.001 par value; 50,000,000 shares authorized, 20,205,482 and 20,137,480 shares issued and outstanding as of February 28, 2026, and August 31, 2025 | 20 | 20 | ||||||||||||
| Additional paid-in capital | 163,176 | 159,416 | ||||||||||||
| Accumulated deficit | (29,153) | (34,364) | ||||||||||||
| Accumulated other comprehensive loss | (272) | (271) | ||||||||||||
| Total shareholders' equity | 133,771 | 124,801 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 146,484 | 131,936 | |||||||||||
3
SIMULATIONS PLUS, INC.
Reconciliation of Adjusted EBITDA to Net Income (1)
(Unaudited)
| Three months ended | Six months ended | ||||||||||||||||||||||
| (in thousands) | February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |||||||||||||||||||
| Net income | $ | 4,535 | $ | 3,074 | $ | 5,211 | $ | 3,280 | |||||||||||||||
| Excluding: | |||||||||||||||||||||||
| Interest income and expense, net | (288) | (154) | (555) | (313) | |||||||||||||||||||
| Provision for income taxes | 1,351 | 434 | 1,645 | 498 | |||||||||||||||||||
| Depreciation and amortization | 1,547 | 2,274 | 2,893 | 4,539 | |||||||||||||||||||
| Stock-based compensation | 1,503 | 1,557 | 2,968 | 3,146 | |||||||||||||||||||
| Loss on currency exchange | 32 | (2) | 42 | 13 | |||||||||||||||||||
| Change in value of contingent consideration | — | (640) | — | (640) | |||||||||||||||||||
| Reorganization expense | — | 157 | — | 415 | |||||||||||||||||||
| Mergers & Acquisitions expense | 55 | (122) | 65 | 133 | |||||||||||||||||||
| Adjusted EBITDA | $ | 8,735 | $ | 6,578 | $ | 12,269 | $ | 11,071 | |||||||||||||||
(1) Numbers may not foot due to rounding
4
SIMULATIONS PLUS, INC.
Reconciliation of Adjusted Diluted EPS to Diluted EPS (1)
(Unaudited)
| Three months ended | Six months ended | ||||||||||||||||||||||
(in thousands, except Diluted EPS and Adjusted Diluted EPS) | February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |||||||||||||||||||
| Net income | $ | 4,535 | $ | 3,074 | $ | 5,211 | $ | 3,280 | |||||||||||||||
| Excluding: | |||||||||||||||||||||||
| Amortization | 1,460 | 2,130 | 2,719 | 4,260 | |||||||||||||||||||
| Stock-based compensation | 1,503 | 1,557 | 2,968 | 3,146 | |||||||||||||||||||
| (Gain) loss on currency exchange | 32 | (2) | 42 | 13 | |||||||||||||||||||
| Mergers & Acquisitions expense | 55 | (122) | 65 | 133 | |||||||||||||||||||
| Change in value of contingent consideration | — | (640) | — | (640) | |||||||||||||||||||
| Reorganization expense | — | 157 | — | 415 | |||||||||||||||||||
| Tax effect on above adjustments | (558) | 41 | (1,390) | (966) | |||||||||||||||||||
| Adjusted Net income | $ | 7,027 | $ | 6,195 | $ | 9,615 | $ | 9,641 | |||||||||||||||
| Weighted-avg. common shares outstanding: | |||||||||||||||||||||||
| Diluted weighted-avg. common shares outstanding | 20,243 | 20,277 | 20,232 | 20,262 | |||||||||||||||||||
| Diluted EPS | $ | 0.22 | $ | 0.15 | $ | 0.26 | $ | 0.16 | |||||||||||||||
| Adjusted Diluted EPS | $ | 0.35 | $ | 0.31 | $ | 0.48 | $ | 0.48 | |||||||||||||||
(1) Numbers may not foot due to rounding
5
Earnings Call: Q2 - FY26 April 9, 2026 Nasdaq: SLP
Safe Harbor Statement Except for historical information, the matters discussed in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Words like “believe,” “will”, “can”, “expect,” “anticipate” and similar expressions (or the negative of such terms, as well as other words or expressions referencing future events, conditions or circumstances) mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Statements include but are not limited to those relating to fiscal year 2026 guidance, expected revenue growth and mix, margins and profitability, demand for our services and software, pricing actions, client spending levels and long-term business strategies. Factors that could cause or contribute to such differences include, but are not limited to: effectiveness of our operational structure, our ability to maintain our competitive advantages and commercialize AI and cloud-enabled solutions, evolving regulatory and data privacy standards governing AI technologies, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, market conditions, macroeconomic factors, and a sustainable market. Further information on our risk factors is contained in our quarterly, annual and current reports and filed with the U.S. Securities and Exchange Commission. Non-GAAP Financial Measures This presentation includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) such as Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS and certain ratios and other metrics derived there from. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. We believe (i) these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends; and (ii) that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing financial measures with other similar companies, many of which present similar non- GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are set forth in the appendix to this presentation. 1
Second Quarter 2026 Highlights $0.22 Diluted EPS $24.3M Revenue 36% Adj. EBITDA Margin +8% Revenue Growth Current period Prior Year Comparison (2Q25) $0.35 Adj. Diluted EPS $22.4M Revenue $0.15 Diluted EPS 29% Adj. EBITDA Margin +23% $0.31 Revenue Growth Adj. Diluted EPS 2
Trailing Twelve Months (TTM) Highlights ($3.12) Diluted EPS (1) $80.5M Revenue 29% Adj. EBITDA Margin +3% Revenue Growth Current period Prior Year Comparison (2Q25) $1.02 Adj. Diluted EPS $78.6M Revenue $0.36 Diluted EPS 26% Adj. EBITDA Margin +21% Revenue Growth $0.93 (1) Diluted EPS includes a non-cash impairment charge of $77.2 million Adj. Diluted EPS 3
Software Highlights $18.7M Revenue $0.04 Diluted EPS 22% Adj. EBITDA Margin +18% Q2 Revenue Growth 12% Q2 Revenue Growth -54% Q2 Revenue Decline +6% TTM Revenue Growth 3% TTM Revenue Growth -58% TTM Revenue Decline – Overall software revenue growth of 9% for 2Q26 and -2% for TTM – Renewal rates impacted by client consolidations and site closures Pro-ficiency® CLINICAL OPS 4
Services Highlights $18.7M Revenue $0.04 Diluted EPS 22% Adj. EBITDA Margin +19% Revenue Growth $0.18 Adj. Diluted EPS +12% Q2 Revenue Growth -1% Q2 Revenue Decline TTM Revenue Decline TTM Revenue Growth -3% +66% – Overall services revenue growth of 8% for 2Q26 and 9% for TTM – Total backlog $24.0M Med Comm Services COMMERCIALIZATION 5
Revenue - Q2 FY26 (in millions) Software Revenue Growth Total Revenue Growth Services Revenue Growth +8% +9% +8% 2Q26 Mix 2Q25 Mix 6
Revenue - YTD FY26 (in millions) Software Revenue Decline Total Revenue Growth Services Revenue Growth +3% -3% +12% FY26 Mix FY25 Mix 7
Revenue - Trailing Twelve Months (TTM) (in millions) Software Revenue Growth Total Revenue Growth Services Revenue Growth +3% -2% +9% 2Q26 Mix 2Q25 Mix 8
Software Solutions as % of Software Revenue 2Q26 TTM GastroPlus® • 16 new clients • 6 upsells to existing clients ADMET Predictor® • 13 new clients • 10 upsells to existing clients MonolixSuite • 11 new clients • 7 upsells to existing clients Second Quarter Highlights Discovery Development Discovery Development Clinical Ops Discovery Development Clinical Ops 9
Software Performance Metrics - Q2 FY26 Avg. Revenue per Client (in thousands) Commercial Clients Renewal Rate* (fee based) 10 *Excludes perpetual licenses for all periods
Software Performance Metrics - TTM Avg. Revenue per Client (in thousands) Renewal Rate* (fee based) Commercial Clients Clients (end of period) 11 *Excludes perpetual licenses for all periods
Services Solutions as % of Services Revenue Q2 FY26 TTM Development Commercialization Development Commercialization 12
Services Performance Metrics Q2 FY26 Total Projects Backlog (in millions) 13
Income Statement Summary - Q2 FY26 (1) (in millions, except Diluted EPS and Adjusted Diluted EPS) % of Rev2Q25% of Rev2Q26 100%$22.4100%$24.3Revenue 41%9.334%8.1Cost of revenue 59%13.166%16.1Gross profit 10%2.114%3.5R&D 17%3.712%2.9S&M 20%4.517%4.1G&A excluding nonrecurring 0%—0%0.1Nonrecurring 46%10.443%10.5Total operating expense 12%2.723%5.6Income from operations 16%3.524%5.9Income before income taxes -2%(0.4)-6%(1.4)Income tax expense 14%$3.119%$4.5Net Income $0.15$0.22Diluted EPS 29%$6.636%$8.7Adjusted EBITDA $0.31$0.35Adjusted Diluted EPS (1) Numbers may not add due to rounding 14
Income Statement Summary - YTD FY26 (1) (in millions, except Diluted EPS and Adjusted Diluted EPS) % of RevFY25% of RevFY26 100%$41.4100%$42.7Revenue 44%18.037%15.7Cost of revenue 56%23.363%27.0Gross profit 10%4.015%6.5R&D 16%6.614%6.1S&M 23%9.419%8.1G&A excluding nonrecurring 1%0.50%0.1Nonrecurring 50%20.548%20.7Total operating expense 7%2.815%6.3Income from operations 9%3.816%6.9Income before income taxes -1%(0.5)-4%(1.6)Income tax expense 8%$3.312%$5.2Net Income $0.16$0.26Diluted EPS 27%$11.129%$12.3Adjusted EBITDA $0.48$0.48Adjusted Diluted EPS (1) Numbers may not add due to rounding 15
Balance Sheet Summary (1) (in millions) (1) Numbers may not add due to rounding August 31, 2025February 28, 2026 $32.4$41.8Cash and short-term investments 19.225.7Other current assets 80.478.9Long term assets $131.9$146.5Total assets 6.712.3Current liabilities 0.40.4Long-term liabilities 7.112.7Total liabilities 124.8133.8Shareholders’ equity $131.9$146.5Total liabilities and shareholders’ equity 16
Fiscal 2026 Guidance Guidance $79M - $82MTotal Revenue 0% - 4%Total Revenue Growth 57% - 62%Software Revenue Mix 26% - 30%Adjusted EBITDA Margin (1) $0.75 - $0.85Adjusted Diluted EPS (2) (1) Adjusted EBITDA represents net income excluding the effect of interest expense (income), provision (benefit) for income taxes, depreciation and amortization, equity-based compensation expense, loss (gain) on currency exchange, impairment charges, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense and other items not indicative of our ongoing operating performance. (2) Adjusted net income and adjusted diluted earnings per share exclude the effect of amortization, equity-based compensation expense, loss (gain) on currency exchange, impairment charges, change in fair value of contingent consideration, reorganization expense, acquisition and integration expense and other items not indicative of our ongoing operating performance as well as the income tax provision adjustment for such charges. 17
Adjusted EBITDA Non-GAAP Reconciliation (1) FY25 YTDFY26 YTD2Q252Q26 $3,280$5,211$3,074$4,535Net income Excluding: (313)(555)(154)(288)Interest income and expense, net 4981,6454341,351Provision for income taxes 4,5392,8932,2741,547Depreciation and amortization 3,1462,9681,5571,503Stock-based compensation 1342(2)32Loss on currency exchange (640)—(640)—Change in value of contingent consideration 415—157—Reorganization expense 13365(122)55Mergers & Acquisitions expense $11,071$12,269$6,578$8,735Adjusted EBITDA (in thousands) (1) Numbers may not add due to rounding 18
Adjusted Diluted EPS Non-GAAP Reconciliation (1) FY25 YTDFY26 YTD2Q252Q26 $3,280$5,211$3,074$4,535Net income Excluding: 4,2602,7192,1301,460Amortization 3,1462,9681,5571,503Stock-based compensation 1342(2)32Loss on currency exchange 13365(122)55Mergers & Acquisitions expense (640)—(640)—Change in value of contingent consideration 415—157—Reorganization expense (966)(1,390)41(558)Tax effect on above adjustments $9,641$9,615$6,195$7,027Adjusted Net income 20,26220,23220,27720,243Diluted weighted-avg. common shares outstanding $0.16$0.26$0.15$0.22Diluted EPS $0.48$0.48$0.31$0.35Adjusted Diluted EPS (in thousands, except Diluted EPS and Adjusted Diluted EPS) (1) Numbers may not add due to rounding 19
Lisa Fortuna Financial Profiles slp@finprofiles.com | +1-310-622-8251 Investor Relations Contact: Thank You
FAQ
How did Simulations Plus (SLP) perform in Q2 fiscal 2026?
Simulations Plus delivered stronger Q2 results, with revenue up 8% to $24.3 million. Software revenue rose 9% to $14.6 million and services revenue increased 8% to $9.7 million. Net income reached $4.5 million, or $0.22 diluted EPS, reflecting improved profitability.
What were Simulations Plus’ key profitability metrics for Q2 2026?
Profitability improved meaningfully. Gross profit was $16.1 million and gross margin expanded to 66%, up from 59%. Net income rose to $4.5 million with diluted EPS of $0.22. Adjusted EBITDA reached $8.7 million, representing a 36% margin versus 29% a year earlier.
How did Simulations Plus’ first-half fiscal 2026 results compare year over year?
For the first six months of fiscal 2026, total revenue increased 3% to $42.7 million. Software revenue decreased 3% to $23.5 million, while services revenue grew 12% to $19.2 million. Net income improved to $5.2 million, with diluted EPS rising to $0.26 from $0.16.
What fiscal 2026 guidance did Simulations Plus provide for revenue and margins?
Simulations Plus reaffirmed fiscal 2026 revenue guidance of $79–$82 million, implying 0–4% growth. Management also maintained targets for a 57–62% software revenue mix and an adjusted EBITDA margin between 26–30%, signaling stable underlying operating expectations.
Why did Simulations Plus lower its adjusted diluted EPS guidance for 2026?
The company cut its adjusted diluted EPS guidance from $1.03–$1.10 to $0.75–$0.85 due to a higher expected effective tax rate. Management now anticipates a tax rate of 23–25%, up from a prior assumption of 12–14%, reducing projected after-tax earnings.
What is Simulations Plus’ cash and balance sheet position as of February 28, 2026?
As of February 28, 2026, Simulations Plus held $25.7 million in cash and cash equivalents and $16.1 million in short-term investments. Total assets were $146.5 million, total liabilities $12.7 million, and shareholders’ equity $133.8 million, indicating a debt-light balance sheet.