Simulations Plus Inc (NASDAQ:SLP) stock fell 14.71% (As on July 3, 11:21:38 AM UTC-4, Source: Google Finance) after the company discontinues dividend but it beats the topline expectations for the third quarter of FY 24. Software revenue increased by 12% to $11.9 million, representing 64% of total revenue, while services revenue grew by 18% to $6.6 million, representing 36% of total revenue. Despite these gains, the company faced challenges with a net income of $3.1 million, down from $4.0 million in the prior year. The company maintained a gross profit of $13.3 million with a gross margin of 71%. Adjusted EBITDA stood at $5.7 million, representing 31% of total revenue.
SLP in the third quarter of FY 24 has reported the adjusted earnings per share of 15 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 15 cents. The company had reported the adjusted revenue growth of 14 percent to $18.5 million in the third quarter of FY 24, beating the analysts’ estimates for revenue of $17.96 million. This was led by higher software sales in our Cheminformatics and Clinical Pharmacology & Pharmacometrics (CPP) business units, with strong growth in the ADMET Predictor and MonolixSuite platforms, respectively. The Physiologically Based Pharmacokinetics (PBPK) business unit also performed well, reflecting higher revenues from GastroPlus. During the quarter, the company is excited to launch GastroPlus X, the next generation of physiologically based pharmacokinetics/biopharmaceutics (PBPK/PBBM) modeling and simulation software and believe it will become a meaningful addition to our suite of leading-edge solutions.
Simulations Plus expects full-year earnings to be in the range of 54 cents to 56 cents per share, with revenue expected to be in the range of $69 million to $72 million.
Meanwhile, the company has determined to discontinue the Company’s quarterly cash dividend and reallocate these funds to the capital allocation strategy for investing in growth initiatives that are intended to generate long-term shareholder value. The final dividend of $0.06 per share of the Company’s common stock will be paid on August 5, 2024, to shareholders of record as of July 29, 2024.
In addition, the company has recently announced the acquisition of Pro-ficiency Holdings, Inc. and its subsidiaries, a leader in providing simulation-enabled performance and intelligence solutions for clinical and commercial drug development. Simulations Plus acquired Pro-ficiency from QHP Capital, L.P. (management company for NovaQuest Private Equity) (“QHP Capital”) and Pro-ficiency’s minority shareholders for approximately $100 million in cash.