Slide 1: Earnings Call – Q4 - FY23
1 Earnings Call – Q4 - FY23 October 25, 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: Fourth Quarter Highlights
▪ Strong revenue and earnings results for fiscal 2023 ▪ Conditions in our market remain similar to what we have seen past several quarters ◦ Small biotech slowdown ◦ Large Pharma spending cautiousness ▪ Integration of Immunetrics going well ▪ Achieved revenue and adjusted diluted earnings per share
Slide 4: Fourth Quarter Software Highlights
▪ Overall software revenue growth of 59% ▪ Continued market spending cautiousness ▪ Renewal harmonization essentially complete - results as expected ▪ Renewal rate negatively impacted by several non-renewals due to M&A activity in client base ▪ Good yield on price increase Fourth Quarter Software Hi
Slide 5: Fourth Quarter Services Highlights
▪ Overall services revenue growth 8% ▪ Total backlog $20M – projects to be performed within 12 months decreased from 80% to 79% ▪ Successful recruiting quarter (2 new hires, 12 YTD) ▪ 201 total projects worked on during the quarter Fourth Quarter Services Highlights +60% -1% ▪ Q4 saw higher % of fix
Slide 6: Capital Allocation Strategy Update
Capital Allocation Strategy Update ▪ Product R&D ▪ Employee Recruiting and Retention - 27 new hires for FY23, including 13 from Immunetrics ▪ Enterprise Technologies ▪ Acquisitions ▪ Strategic investments and partnerships ▪ Immunetrics acquisition consummated in Q4 ▪ Maintain current level ▪ $0.06 p
Slide 7: Fiscal 2024 Guidance
Fiscal 2024 Guidance 7 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 8: Financial Results
Financial Results
Slide 9: Revenue - Q4
50% 50% Software Services Revenue - Q4 (in millions) Software RevenueTotal Revenue Services Revenue +33% +59% +8% 4Q23 Mix 4Q22 Mix 9 $5.3 $5.9 $9.3 $4.5 $5.8 $6.3 $9.8 $11.7 $15.6 Software Services 4Q21 4Q22 4Q23 60% 40% Software Services
Slide 10: Revenue - Fiscal 2023
61% 39% Software Services 61% 39% Software Services Revenue - Fiscal 2023 (in millions) Software RevenueTotal Revenue Services Revenue +11% +12% +8% FY23 Mix FY22 Mix 10 $27.7 $32.6 $36.5 $18.8 $21.3 $23.1$46.5 $53.9 $59.6Software Services FY21 FY22 FY23
Slide 11: Gross Margin Trends - Q4
Gross Margin Trends - Q4 11 85% 86% 89% 56% 68% 62% 72% 77% 78% Software Services Total 4Q21 4Q22 4Q23
Slide 12: Gross Margin Trends - Fiscal 2023
Gross Margin Trends - Fiscal 2023 12 88% 91% 90% 61% 63% 65% 77% 80% 80% Software Services Total FY21 FY22 FY23
Slide 13: Software Revenue by Product
Software Revenue by Product 13 Software Product as % of Software Revenue Q4 FY23 FY23 54% 15% 21% 10% 54% 19% 19% 8% GastroPlus® MonolixSuite® ADMET Predictor® Other GastroPlus® MonolixSuite® ADMET Predictor® Other
Slide 14: Software Performance Metrics - Q4
Avg. Revenue per Customer (in thousands) Software Performance Metrics - Q4 Commercial Customers Renewal Rates 14 $65 $65 $88 4Q21 4Q22 4Q23 83% 85% 80% 97% 92% 85% Accounts Fees 4Q21 4Q22 4Q23
Slide 15: Software Performance Metrics - Fiscal 2023
Avg. Revenue per Customer (in thousands) Software Performance Metrics - Fiscal 2023 Commercial Customers Renewal Rates 15 $121 $110 $126 FY21 FY22 FY23 87% 88% 82% 96% 95% 92% Accounts Fees 4Q21 4Q22 4Q23
Slide 16: Services Revenue by Type
Services Revenue by Type 16 Services Type as % of Services Revenue Q4 FY23 FY23 Other 39% 37% 20% 4% PKPD QSP/QST PBPK Other 45% 25% 23% 7% PKPD QSP/QST PBPK
Slide 17: Services Performance Metrics
132 129 132 24 37 54 81 114 14562 42 85 299 322 416 PKPD QSP/QST PBPK Other FY21 FY22 FY23 Services Performance Metrics Total Projects Backlog 17 $13 $16 $20 FY21 FY22 FY23
Slide 18: Income Statement Summary - Q4
Income Statement Summary - Q4 18 (in millions, except Diluted EPS and Adjusted Diluted EPS) 4Q23 % of Rev 4Q22 % of Rev Revenue $15.6 100% $11.7 100% Revenue growth 33% 19% Gross profit 12.3 78% 9.1 77% R&D 1.1 7% 0.8 7% SG&A 11.5 73% 7.6 65% Total operating exp 12.5 80% 8.4 71% Income from operatio
Slide 19: Income Statement Summary - Fiscal 2023
Income Statement Summary - Fiscal 2023 19 FY23 % of Rev FY22 % of Rev Revenue $59.6 100% $53.9 100% Revenue growth 11% 16% Gross profit 47.9 80% 43.1 80% R&D 4.5 8% 3.2 6% SG&A 34.7 58% 25.0 46% Total operating exp 39.2 66% 28.2 52% Income from operations 8.7 15% 14.9 28% Income before income taxes
Slide 20: Balance Sheet Summary
Balance Sheet Summary 20 August 31, 2023 August 31, 2022 Cash and short-term investments $115.5 $128.2 Total current assets 130.4 146.8 Total assets $186.1 $188.4 Current liabilities 12.0 7.7 Long-term liabilities 4.1 2.4 Total liabilities 16.1 10.1 Shareholders’ equity 170.0 178.2 Total liabilities
Slide 21: Conclusion: Strong FY Achievements in Line with Guidance
STRONG FY 23 ACHIEVEMENTS IN LINE WITH GUIDANCE Delivering on our commitment to scientific leadership Challenges being addressed 21 • Internal R&D investment • Expanding industry and regulatory partnerships • MIDD+ – 3rd annual SLP sponsored conference Enhancing our client facing capabilities Focus
Slide 22: Adjusted EPS Non-GAAP Reconciliation
Adjusted EPS Non-GAAP Reconciliation* 22 FY 2022 FY 2023 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY Net Income (GAAP) $3.0 $4.4 $4.1 $1.0 $1.2 $4.2 $4.0 $0.5 $12.5 $10.0 Excluding: Mergers & Acquisitions expense — — — 0.3 0.3 0.1 0.4 0.9 0.3 1.7 Immunetrics transaction costs — — — — — — — 2.3 — 2.3 Cog
Slide 23: — QB SimulationsPlus
— QB SimulationsPlus