Simulations Plus Stock Earnings Reports

Simulations Plus reported Q2 FY2026 revenue of $24.3M (up 8% YoY) with adjusted EBITDA of $8.7M (36% margin) and adjusted diluted EPS of $0.35. Software comprised ~60% of revenue and grew 9%; Services were 40% and grew 8%. Discovery (ADMET Predictor) and Development (GastroPlus, MonolixSuite) drove growth while Clinical Ops (proficiency) declined. The company ended the quarter with 297 commercial clients, average revenue per client $124K for the quarter (trailing 12-month average $148K) and a 91% quarterly renewal rate (87% TTM). Services backlog increased 18% to $24M, and total gross margin improved to 66% (software 89%, services 33%). Cash & short-term investments were $41.8M, no debt. Management emphasized AI as a strategic tailwind — positioning Simulations Plus as an AI-enabled, auditable biosimulation ecosystem and announced collaboration programs with three large pharma partners to integrate AI across their major platforms. Monetization of AI collaborations is expected to be modest in FY2026, with potential contribution beginning in FY2027. Guidance for FY2026 was largely unchanged: revenue $79–82M (0–4% growth), software mix 57–62%, adjusted EBITDA margin 26–30%, and adjusted diluted EPS revised to $0.75–0.85 reflecting a higher effective tax rate. The company now expects an effective tax rate of 23–25% (previously 12–14%). Management continues to focus on cross-sell (moving customers from 1 to multiple products), reorganizing sales to a regional account-based model, and executing cloud/AI roadmap while remaining cautious on macro fragility and near-term trends.