Simulations Plus 2025 Q4 Earnings Sharp Net Loss Amid Revenue Decline

Simulations Plus (SLP) reported fiscal 2025 Q4 earnings on Dec 1, 2025, with revenue falling short of expectations despite beating revenue forecasts. The company swung to a net loss, reversing a prior-year profit, while reaffirming fiscal 2026 guidance.

Revenue

Total revenue for Simulations Plus declined by 6.5% to $17.46 million in 2025 Q4, reflecting a year-over-year drop from $18.66 million. Software revenue, a core segment, decreased by 9% to $9.0 million, while services revenue fell 3% to $8.4 million. The performance underscores sector-specific challenges, including market volatility and client consolidation.

Earnings/Net Income

The company swung to a loss of $0.03 per share in 2025 Q4 from a profit of $0.04 per share in 2024 Q4, representing an 180.5% negative change. Net income deteriorated to a $681,000 loss compared to $843,000 in the prior year, marking a 180.8% decline. The earnings shift highlights operational pressures despite long-term profitability over 19 years.

Price Action

Shares of Simulations Plus edged up 1.18% on the latest trading day, 0.65% for the week, but declined 3.82% month-to-date. The strategy of buying shares post-revenue drop and holding for 30 days underperformed sharply, delivering -65.37% returns over three years versus a 70.26% benchmark.

CEO Commentary

CEO Shawn O’Connor emphasized resilience amid market dynamics, noting 13% fiscal 2025 revenue growth and 8% gains in adjusted EBITDA and EPS. He highlighted strategic advancements in cloud deployment, AI workflows, and compliance frameworks, positioning the company for long-term value creation.

Guidance

Simulations Plus reaffirmed fiscal 2026 guidance: $79–$82 million in revenue (0–4% growth), 57–62% software revenue mix, 26–30% adjusted EBITDA margin, and $1.03–$1.10 adjusted diluted EPS. The company remains focused on cloud-scale performance, AI integration, and regulatory alignment.

Post-Earnings Price Action Review

Investors reacted cautiously to the revenue miss, yet shares gained 5.85% after hours on upbeat guidance. The 6% year-over-year revenue decline contrasted with strong full-year 2025 growth, reflecting mixed short-term and long-term signals. Strategic product launches, including AI-enhanced Gastro Plus, aim to drive future demand.

Additional News

1. Strategic Product Launches: Simulations Plus announced Gastro Plus 10.2 and AI-driven workflow tools, targeting enhanced client efficiency and market competitiveness.

2. Stock Price Volatility: Shares surged 5.2% post-earnings on guidance reaffirmation, despite a Q4 revenue miss, signaling investor optimism in strategic initiatives.

3. Insider Transactions: Director Lisa LaVange filed to sell 866 shares, indicating potential liquidity needs or confidence in the company’s long-term trajectory.

Financial Health

Simulations Plus maintains a strong balance sheet with $32.4 million in cash and no debt, supporting innovation. However, a $77.2 million non-cash impairment charge in FY2025 resulted in a net loss, underscoring asset management risks. The company anticipates Q1 2026 revenue to decline 3–5%, reflecting near-term headwinds.

Outlook

With a focus on AI and cloud integration, Simulations Plus aims to capitalize on evolving client demands in biosimulation. Upcoming investor events, including a January 2026 Virtual Investor Day, will showcase new product visions and growth strategies.