Simulations Plus Q2 2025: Contradictions Surrounding Revenue Growth, Services Performance, and Acquisition Impact

These are the key contradictions discussed in Simulations Plus's latest 2025Q2 earnings call, specifically including: Software Organic Revenue Growth, Services Revenue Performance, and Pro-ficiency Acquisition Impact:



Revenue Growth and Software Performance:
- Simulations Plus, Inc. reported total revenue of $22.4 million for Q2 2025, up 23% year-over-year, with software revenue increasing 16%.
- The growth was driven by strong performance in their software segment, particularly in the Quantitative Systems Pharmacology (QSP) business unit, which saw an 89% increase.

Services Revenue and Backlog:
- Services revenue grew by 34%, although it was flat on an organic basis, with a backlog of $20.4 million, up 18% quarter-over-quarter.
- The increase in services revenue was led by strong performance in the Clinical Pharmacology & Pharmacometrics (CPP) and Medical Communications (MC) business units.

Cross-Selling and New Business Units:
- The company is focusing on expanding cross-selling opportunities, especially with the addition of the ALI and Medical Communications business units.
- This strategy is part of their approach to leverage their existing client base and enhance average revenue per customer.

Adjusted EBITDA and Profitability:
- Adjusted EBITDA was $6.6 million, representing 29% of revenue, reflecting a 2% decline from the prior year.
- The decrease was due to increased costs related to the acquisition of Pro-ficiency and higher amortization expenses.