Slide 1: Earnings Call – Q3 - FY23 July 6, 2023
1 Earnings Call – Q3 - FY23 July 6, 2023
Slide 2: Safe Harbor Statement
With the exception of historical information, the matters discussed in this presentation are forward-looking statements that involve a number of risks and uncertainties. Words like “believe,” “expect” and “anticipate” mean that these are our best estimates as of this writing, but that there can be n
Slide 3: Third Quarter Highlights
▪ Third quarter results in line with guidance ▪ Business Highlights ▪ Revenue seasonality impacted by shift in software renewal timing as expected ▪ Underlying market conditions continue as experienced for several quarters ◦ Small biotech pull back ◦ Large Pharma spending cautiousness ◦ CRO segment
Slide 4: Third Quarter Software Highlights
▪ Overall software revenue growth of 10% ▪ Renewal pattern and revenue seasonality shifting as anticipated ▪ Continued market spending cautiousness ▪ University+ program has 299 individual licenses across 56 countries ▪ Good yield on price increase Third Quarter Software Highlights +84% -2% ▪ 4 new
Slide 5: Third Quarter Services Highlights
▪ Overall services revenue growth 5% ▪ Total backlog $15.7M – projects to be performed within 12 months decreased from 80% to 77% ▪ Successful recruiting quarter (3 new hires, 10 YTD) ▪ 212 total projects worked on during the quarter Third Quarter Services Highlights +6% +2% ▪ Higher margin time and
Slide 6: Capital Allocation Strategy Update
Capital Allocation Strategy Update ▪ Product R&D ▪ Employee Recruiting and Retention ▪ Enterprise Technologies ▪ Acquisitions ▪ Strategic investments and partnerships ▪ Immunetrics acquisition consummated in Q4 ▪ Maintain current level ▪ $0.06 per share paid Feb. 6th ▪ $0.06 per share payable May 1s
Slide 7: Immunetrics Acquisition
Immunetrics Acquisition | June 2023 7 Increases breadth and depth of QSP expertise and range of therapeutic applications Rationale Terms ▪ Immunetrics is a modeling & simulation company focused on accelerating drug development in oncology, immunology, and autoimmune diseases ▪ Increases offering are
Slide 8: Maintaining FY23 Guidance
Maintaining FY23 Guidance Total Revenue $59.3M to $62.0M Total Revenue Growth 10% to 15% Software Revenue Mix 60% to 65% Services Revenue Mix 35% to 40% Diluted EPS $0.63 to $0.67 (excl. $0.09 M&A expense) 8 (Q423 Immunetrics impact: due to timing of close and seasonality, revenue will be positive b
Slide 9: Financial Results
Financial Results
Slide 10: Revenue - Q3
64% 36% Software Services Revenue - Q3 (in millions) Software RevenueTotal Revenue Services Revenue +9% +10% +5% 3Q23 Mix 3Q22 Mix 10 $8.3 $9.6 $10.6 $4.5 $5.3 $5.6$12.8 $15.0 $16.2 Software Services 3Q21 3Q22 3Q23 65% 35% Software Services
Slide 11: Revenue - YTD
62% 38% Software Services 63% 37% Software Services Revenue - YTD (in millions) Software RevenueTotal Revenue Services Revenue +4% +2% +9% FY23 Mix FY22 Mix 11 $22.3 $26.8 $27.2 $14.3 $15.4 $16.8 $36.6 $42.2 $43.9 Software Services FY21 FY22 FY23
Slide 12: Gross Margin Trends - Q3
Gross Margin Trends - Q3 12 90% 92% 91% 63% 66% 63% 81% 83% 82% Software Services Total 3Q21 3Q22 3Q23
Slide 13: Gross Margin Trends - YTD
Gross Margin Trends - YTD 13 89% 92% 90% 62% 62% 66% 79% 81% 81% Software Services Total FY21 FY22 FY23
Slide 14: Software Revenue by Product
Software Revenue by Product 14 Software Product as % of Software Revenue Q3 FY23 YTD FY23 57% 18% 19% 6% 55% 20% 18% 7% GastroPlus® MonolixSuite® ADMET Predictor® Other GastroPlus® MonolixSuite® ADMET Predictor® Other
Slide 15: Software Performance Metrics - Q3
Avg. Revenue per Customer (in thousands) Software Performance Metrics - Q3 Commercial Customers Renewal Rates 15 $98 $95 $97 3Q21 3Q22 3Q23 90% 87% 87% 99% 92% 96% Accounts Fees 3Q21 3Q22 3Q23
Slide 16: Software Performance Metrics - YTD
Avg. Revenue per Customer (in thousands) Software Performance Metrics - YTD Commercial Customers Renewal Rates 16 $112 $108 $118 FY21 FY22 FY23 88% 89% 83% 95% 96% 94% Accounts Fees 3Q21 3Q22 3Q23
Slide 17: Services Revenue by Type
Services Revenue by Type 17 Services Type as % of Services Revenue Q3 FY23 YTD FY23 Other 45% 23% 25% 7% PKPD QSP/QST PBPK Other 48% 20% 25% 7% PKPD QSP/QST PBPK
Slide 18: Services Performance Metrics
Services Performance Metrics Total Projects Backlog 18 45 76 76 18 21 23 33 83 67 35 16 46 131 196 212 PKPD QSP/QST PBPK Other 3Q21 3Q22 3Q23 $12 $17 $16 3Q21 3Q22 3Q23
Slide 19: Income Statement Summary - Q3
Income Statement Summary - Q3 19 (in millions, except Diluted EPS) 3Q23 % of Rev 3Q22 % of Rev Revenue $16.2 100% $15.0 100% Revenue growth 9% 17% Gross profit 13.3 82% 12.4 83% R&D 0.9 6% 0.7 4% SG&A 8.2 51% 6.8 45% Total operating exp 9.2 57% 7.5 50% Income from operations 4.1 25% 4.9 33% Income b
Slide 20: Income Statement Summary - YTD
Income Statement Summary - YTD 20 3Q23 % of Rev 3Q22 % of Rev Revenue $43.9 100% $42.2 100% Revenue growth 4% 15% Gross profit 35.7 81% 34.0 81% R&D 3.4 8% 2.4 6% SG&A 23.3 53% 17.4 41% Total operating exp 26.7 61% 19.8 47% Income from operations 9.0 20% 14.2 34% Income before income taxes 11.6 26%
Slide 21: Balance Sheet Summary
Balance Sheet Summary 21 May 31, 2023 August 31, 2022 Cash and short-term investments $122.4 $128.2 Total current assets 137.3 146.8 Total assets $179.1 $188.4 Current liabilities 9.0 7.7 Long-term liabilities 0.7 2.4 Total liabilities 9.7 10.1 Shareholders’ equity 169.4 178.2 Total liabilities and
Slide 22: Well Positioned to Achieve Our FY23 Goals
WELL POSITIONED TO ACHIEVE OUR FY23 GOALS Delivering on our commitment to scientific leadership Challenges being addressed 22 • Internal R&D investment • Expanding industry and regulatory partnerships • MIDD+ – 3rd annual SLP sponsored conference Enhancing our client facing capabilities Focus on Cap
Slide 23: Questions
Questions 23
Slide 24: — QB SimulationsPlus
— QB SimulationsPlus