Simulations Plus (SLP +2.36%) was a popular niche stock on the exchange on Tuesday. The healthcare tech specialist's equity was rising by over 16% in late-session trading, thanks to a fresh earnings report that many investors found quite encouraging.
A mixed final frame
For its fiscal fourth quarter of 2025, Simulations Plus brought in $17.5 million in revenue, representing a 6% year-over-year decrease. The decline was mostly due to a 9% slide in software revenue to $9 million. Services, which fell by 3%, comprised the remainder of the top line.
Image source: Getty Images.
As for profitability, net income not in accordance with generally accepted accounting practices (GAAP) decreased to $2 million ($0.10 per share) from fourth quarter 2024's $3.6 million.
On average, analysts tracking Simulations Plus stock were modeling revenue of just under $17.9 million and non-GAAP (adjusted) net profit of $0.10 per share.
The company's full-year performance looked a little better. For that time period, revenue increased by 13% over 2024 to $79 million. Adjusted net income also defied gravity, rising to $20.7 million ($1.03 per share) from $19.4 million.
In its earnings release, Simulations Plus quoted CEO Shawn O'Connor as saying that "The demand environment remains cautious, but we believe adoption of cloud deployment, interoperability, and artificial intelligence-driven workflows is accelerating across our customer base."
NASDAQ: SLP
Key Data Points
So, so-so
Simulations Plus reiterated its existing guidance for the entirety of the new fiscal year. The company believes revenue will hit $79 million to $82 million, with per-share, adjusted net profit landing at $1.03 to $1.10.
I feel Simulations Plus and other healthcare tech companies that advance pharmaceutical science have enormous potential. Drilling down into this earnings report, though, I'm not seeing much -- either in trailing performance or guidance -- that blows me away with this company. It feels to me that better investments exist in this space.
