Slide 1: Earnings Call – Q2 FY24
1 Earnings Call – Q2 - FY24 April 3, 2024
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: Second Quarter Highlights
Second Quarter Highlights $0.20 Diluted EPS $18.3M Revenue 39% Adj. EBITDA as % of Revenue $18.0M Backlog 3 CURRENT PERIOD Prior Year Comparison (2Q23) $15.8M Revenue $0.20 Diluted EPS 39% Adj. EBITDA as % of Revenue $15.4M Backlog
Slide 4: Second Quarter Software Highlights
▪ Overall software revenue growth of 11% ▪ Good renewal rate, upsell and new logo activity ▪ Active and strong pipeline Second Quarter Software Highlights +38% +2% ▪ 6 new customers ▪ 9 upsells to existing customers ▪ 8 new customers ▪ 18 upsells to existing customers +14% Q2 Revenue Growth Q2 Reven
Slide 5: Second Quarter Services Highlights
▪ Overall services revenue growth of 27% ▪ Total backlog $18.0M – strong as we enter second half of fiscal 2024 ▪ Good momentum into second half fiscal 2024 ▪ Continued volatility for project completion due to data delays and drug program start/stop decisions Second Quarter Services Highlights +78%
Slide 6: Financial Results
Financial Results
Slide 7: Revenue - Q2 FY24
63% 37% Software Services 67% 33% Software Services Revenue - Q2 FY24 (in millions) Software RevenueTotal Revenue Services Revenue +16% +11% +27% 2Q24 Mix 2Q23 Mix 7 $9.8 $10.5 $11.6 $5.0 $5.3 $6.7 $14.8 $15.8 $18.3 Software Services 2Q22 2Q23 2Q24
Slide 8: Revenue - YTD
59% 41% Software Services 60% 40% Software Services Revenue - YTD (in millions) Software RevenueTotal Revenue Services Revenue +18% +16% +22% FY24 Mix FY23 Mix 8 $17.1 $16.6 $19.2 $10.1 $11.2 $13.6 $27.2 $27.7 $32.8 Software Services FY22 FY23 FY24
Slide 9: Revenue - Trailing Twelve Months (TTM)
61% 39% Software Services 59% 41% Software Services Revenue - Trailing Twelve Months (TTM) (in millions) Software RevenueTotal Revenue Services Revenue +19% +22% +14% 2Q24 Mix 2Q23 Mix 9 $30.8 $32.1 $39.2 $19.1 $22.3 $25.5$49.8 $54.4 $64.7Software Services 2Q22 2Q23 2Q24
Slide 10: Gross Margin Trends - Q2 FY24
Gross Margin Trends - Q2 FY24 10 92% 92% 88% 59% 66% 44% 81% 83% 72% Software Services Total 2Q22 2Q23 2Q24 1 Decrease in gross margin was partially due to a shift in reporting effective 1Q’24, where certain cost items are reflected in cost of revenues for services that were previously in SG&A expen
Slide 11: Gross Margin Trends - YTD
Gross Margin Trends - YTD 11 91% 90% 88% 60% 68% 46% 79% 81% 70% Software Services Total FY22 FY23 FY24 1 Decrease in gross margin was partially due to a shift in reporting effective 1Q’24, where certain cost items are reflected in cost of revenues for services that were previously in SG&A expense.
Slide 12: Gross Margin Trends - TTM
Gross Margin Trends - TTM 12 90% 90% 89% 59% 68% 54% 78% 81% 75% Software Services Total 2Q22 2Q23 2Q24 1 Decrease in gross margin was partially due to a shift in reporting effective 1Q’24, where certain cost items are reflected in cost of revenues for services that were previously in SG&A expense.
Slide 13: Software Revenue by Business Unit
18% 54% 4% 24% Software Revenue by Business Unit 13 Software Business Unit as % of Software Revenue 2Q24 17% 53% 7% 23% CHEM PBPK QSP CPP YTD 19% 55% 6% 20% TTM
Slide 14: Software Performance Metrics - Q2 FY24
Avg. Revenue per Customer (in thousands) Software Performance Metrics - Q2 FY24 Commercial Customers Renewal Rates 14 $101 $110 $113 2Q22 2Q23 2Q24 87% 80% 85% 96% 94% 94% Accounts Fees 2Q22 2Q23 2Q24
Slide 15: Software Performance Metrics - TTM
Avg. Revenue per Customer (in thousands) Software Performance Metrics - TTM Commercial Customers Renewal Rates 15 $85 $85 $95 2Q22 2Q23 2Q24 86% 83% 84% 94% 92% 93% Accounts Fees 2Q22 2Q23 2Q24
Slide 16: Services Revenue by Business Unit
25% 27% 43% 5% Services Revenue by Business Unit 16 Services Business Unit as % of Services Revenue 2Q24 22% 29% 45% 4% PBPK QSP CPP REG YTD 22% 30% 43% 5% TTM
Slide 17: Services Performance Metrics
$17.0 $15.4 $18.0 2Q22 2Q23 2Q24 72 72 59 25 20 24 63 63 77 21 28 16 181 183 176 PBPK QSP CPP REG 2Q22 2Q23 2Q24 Services Performance Metrics Total Projects Backlog 17
Slide 18: Income Statement Summary - Q2 FY24
Income Statement Summary - Q2 FY24 18 (in millions, except Diluted EPS) 2Q24 % of Rev 2Q23 % of Rev Revenue $18.3 100% $15.8 100% Revenue growth 16% 6% Gross profit 13.2 72% 13.1 83% R&D 1.3 7% 1.3 8% S&M 1.9 11% 1.7 11% G&A 5.5 30% 6.0 38% Total operating exp 8.8 48% 9.1 58% Income from operations
Slide 19: Income Statement Summary - YTD
Income Statement Summary - YTD 19 2Q24 % of Rev 2Q23 % of Rev Revenue $32.8 100% $27.7 100% Revenue growth 18% 2% Gross profit 23.1 70% 22.4 81% R&D 2.5 8% 2.5 9% S&M 3.9 12% 3.2 12% G&A 11.2 34% 11.8 43% Total operating exp 17.7 54% 17.5 63% Income from operations 5.4 16% 4.9 18% Income before inco
Slide 20: Balance Sheet Summary
Balance Sheet Summary 20 February 29, 2024 August 31, 2023 Cash and short-term investments $108.5 $115.5 Total current assets 128.0 130.4 Long-term investments* $9.0 $— Total assets $194.0 $186.1 Current liabilities 14.5 12.0 Long-term liabilities 2.4 4.1 Total liabilities 16.9 16.1 Shareholders’ eq
Slide 21: Fiscal 2024 Guidance
Fiscal 2024 Guidance 21 Guidance Total Revenue $66M to $69M Total Revenue Growth 10% to 15% Software Revenue Mix 55% to 60% Services Revenue Mix 40% to 45% Diluted EPS $0.66 to $0.68
Slide 22: Conclusion
STRONG START TO FISCAL 2024 Delivering on our commitment to scientific leadership Challenges being addressed 22 • Internal R&D investment • Expanding industry and regulatory partnerships Enhancing our client facing capabilities Focus on Capital Allocation CONTINUED LEADERSHIP POSITION IN BIOSIMULATI
Slide 23: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA Non-GAAP Reconciliation* 23 FY 2022 FY 2023 FY 2024 FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Full Year Full Year YTD Net Income $3.0 $4.4 $4.1 $1.0 $1.2 $4.2 $4.0 $0.5 $1.9 $4.0 $12.5 $10.0 $6.0 Excluding: Interest income and expense, net (0.1) (0.1) (0.1) (0.4) (0.8) (1
Slide 24: Investor Relations Contacts
Investor Relations Contacts: Lisa Fortuna Financial Profiles 310-622-8234 slp@finprofiles.com Renee Bouche Simulations Plus Investor Relations 661-723-7723 renee.bouche@simulations-plus.com