Simulations Plus (SLP) Q2 2026 Financial Results Summary

Simulations Plus, Inc. (Nasdaq: SLP) released its financial results for the second quarter of fiscal 2026 on April 9, 2026, detailing the company's performance ending February 28, 2026.

Second Quarter 2026 Financial Highlights (compared to Q2 2025)

• Total Revenue: Increased by 8% to $24.3 million from $22.4 million.
• Software Revenue: Grew by 9% to $14.6 million, representing 60% of total revenue.
• Services Revenue: Increased by 8% to $9.7 million, comprising 40% of total revenue.
• Gross Profit and Margin: Gross profit reached $16.1 million, with a gross margin of 66%, compared to $13.1 million and a margin of 59% last year.
• Net Income: Rose by 45% to $4.5 million, compared to $3.1 million.
• Diluted Earnings Per Share (EPS): Increased to $0.22, up from $0.15.
• Adjusted EBITDA: Recorded at $8.7 million, representing 36% of total revenue, compared to $6.6 million and 29% of total revenue the prior year.
• Adjusted Net Income: Increased to $7.0 million, and adjusted diluted EPS rose to $0.35, up from $6.2 million and $0.31 respectively.

Six Months 2026 Financial Highlights (compared to six months 2025)

• Total Revenue: Increased by 3% to $42.7 million, up from $41.4 million.
• Software Revenue: Decreased by 3% to $23.5 million, representing 55% of total revenue.
• Services Revenue: Grew by 12% to $19.2 million, accounting for 45% of total revenue.
• Gross Profit and Margin: Gross profit totaled $27.0 million with a gross margin of 63%, compared to $23.3 million and 56%.
• Net Income: Increased to $5.2 million, up from $3.3 million, marking a growth of 58%.
• Diluted EPS: Increased to $0.26 compared to $0.16.
• Adjusted EBITDA: Recorded at $12.3 million, which is 29% of total revenue, compared to $11.1 million and 27% the year prior.
• Adjusted Net Income: Maintained at $9.6 million, with adjusted diluted EPS remaining steady at $0.48.

Management Commentary

• CEO Shawn O’Connor noted:
• The revenue growth of 8% was due to performance in discovery and development solutions.
• There was a rise in new client acquisitions and existing client upsells.
• Services revenue growth was attributed to strong demand for development solutions, leading to an 18% increase in backlog.
• Positive market conditions were attributed to pricing agreements and a favorable funding environment.

Fiscal 2026 Guidance

Adjusted diluted EPS guidance was revised down to a range of $0.75 - $0.85 from $1.03 - $1.10 due to an anticipated increase in the effective tax rate from 12-14% to 23-25%.

Guidance Metrics

• Revenue: $79M - $82M
• Revenue Growth: 0% - 4%
• Software Mix: 57% - 62%
• Adjusted EBITDA Margin: 26% - 30%

Dividend and Share Repurchase

The company did not declare a quarterly dividend or announce any share repurchase program in the report.

Conference Call

A conference call and webcast to discuss these results will be hosted by Shawn O’Connor and Will Frederick on April 9 at 5:00 p.m. ET.

The provided data illustrates consistent growth in revenue and profit metrics for Simulations Plus in its second quarter of fiscal 2026, highlighting its position within the biopharma innovation and drug development sector.

Note: The amounts in the following tables are in thousands.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME	Three Months Ended		Six Months Ended
	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	-$6	—	-$6	$4
securities
Comprehensive income	$4,540	$3,048	$5,210	$3,216

Note: The amounts in the following tables are in thousands.

CONDENSED CONSOLIDATED BALANCE SHEETS	February 28, 2026	August 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$25,727	$30,853
Accounts receivable, net of allowance	$18,170	$9,717
for credit losses of $73 and $187
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	$11,158	$11,117
of accumulated amortization of $23,543 and $21,863
Property and equipment, net	$752	$880
Operating lease right-of-use assets	$373	$407
Intellectual property, net of accumulated amortization	$5,663	$6,197
of $9,555 and $9,021
Other intangible assets, net of accumulated amortization	$11,327	$11,896
of $4,904 and $4,399
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 Disclaimer The content on MarketsFN.com is provided for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or trading guidance. All investments carry risk and past performance does not guarantee future results. You are solely responsible for your investment decisions and should conduct independent research and consult a qualified financial advisor before acting. MarketsFN.com and its authors are not liable for any losses or damages arising from the use of this information.