SLP - Earnings call transcript Q2 2021

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Operator

Greetings and welcome to Simulations Plus, Second Quarter Fiscal 2021 Financial Results Conference Call and Webinar. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jeff Stanlis from Hayden IR. Mr. you Thank now may Stanlis, begin. you

Jeff Stanlis

are On behalf will CFO, our Webinar. Will welcome Shawn follow today to Frederick. An ask presentation. Plus, Quarter Simulations Hosting and Fiscal questions company's call and today's I Second Call XXXX you Conference CEO, to of Financial the Plus' Simulations opportunity the O'Connor Results

statements number that are could include, personnel discussed to to levels company's Before Further ability attract and to fashion, timely cause on of call differ produce the in growth, skilled the of and O'Connor. historical the significantly exception risks to, company's from said, those factors Commission. beginning, not with company's would in that are presentation annual turn factors, Securities and contained a with market continue contribute The Shawn the risk current of to in the Exchange information that statements. this the With actual or continued differences future I and company's a Factors would ability improve the I everyone such like that competitive to products and like are company's company's ability productivity. reports for over uncertainties. and company's company finance the to can filed products, the forward-looking quarterly new retain the Shawn? the sustain ability to limited the demand of to matters or but the involve remind results information, to

Shawn O'Connor

bolstered the business higher leverage to profitability. our margin solid of XX% led We improved Jeff. the software and Simulations another solid mix the Thank year-over-year particularly model first-half inherent Plus, growth, side the delivered This greater The of quarter for revenue our year. by software business. was of to and you, revenue growth, strong fiscal a

on in five delivering first event, the for process More and early covering quarter in in content simulation a tracks customized than successful focused specifically highlights was organizations. sponsored demonstrated conference in modeling discovery, of commercial launch pharmaceutical the our proposed March, development This MIDD+ two-day Simulations human, our drug One scientific and pre-clinical, event including the of leadership academic scientists our Plus Phase-I participated of event, first of generics. and the with the dedicated including sessions all professionals industry. stages hundred their approval

In presence strong and FDA the for center addition, drug and research U.S. participation research the national and and included including as sciences, this for a pharmacology, drug as regulatory and clinical research Canada. representatives evaluation Health from of from center active translational agencies, new products, the conference offices ANVISA standards, well toxicological

and the which website. release IR our size report, shareholders. transparency, of you to This movement inaugural this find good on our commitment governance, highlight of Another as diversity, report for proud the can I'm find form. our its still something ESG our rare our of continues demonstrates to was report companies ESG

that and and and lives. as important quarter especially of will software innovative to and the adopted the we of position. that this the strong leadership our and we consulting options growth our through a puts The this initiatives ahead to the move optimize science-based of our and solidify full normalize was and bit with growth, strong expect second excellent long-term half In have solutions revenue software leadership software our growth both results industry profitability, the quality for plan mission We year. achieving productive summary, mix through a patients' treatment goals of year save improve

million consolidated the Organic last mentioned growth same XX% for revenue continued with year. of outperform we for the the delivered Turning the quarter. for quarter. quarter to quarter, Lixoft $X.X versus second expectations I to our was mix growth XX% as revenue the contribution

revenue XX% total to year. XX% last was revenues Software of compared

Our compared to XX% growth last year. second was fiscal XX% software quarter revenue

growth to software of Lixoft, sourced was XX% from compared revenue XX% addition last the Excluding revenue year.

software We are Lixoft's seeing accelerated organic overall in growth excellent contribution performance. addition in growth to resulting

Our last XX% year. increased X% compared revenue Service to

our projects in that year rate the a accelerated the at business sustainable. we not time performance driving experienced As second DILIsym some last that likely reminder, was indicated and growth quarter XX%

development Our the fiscal DILIsym Cognigen. our addition Year-to-date, Service project but growth from consolidated year-over-year conclusion quarter funded this improved revenue QX of in was 'XX reflects XX%. difficult revenue a growth to comparison sequentially in the year-over-year year client still software at

six-month Year-to-date, being was If the total you compared XX% growth exclude software the compared the driving year. for revenue to was year-over-year the period our again acquisition comparison of to revenue factor. last XX% our division DILIsym Lixoft last challenging year, with its XX%

revenue Our year-to-date XX% compared was XX% to last growth software year.

division, XX%. our Lixoft software revenue our growth Excluding year-to-date was

Our year-to-date increased driver to primary is the growth XX% of last DILIsym revenue comparison again, Services X% compared year, the rate. this

organically both the the acquisition. regard these very on Over of At and we across couple remain accelerated we time, are and revenue profitability in have that last same metrics. we growth focused well through for performing years,

of last this at Diluted the quarter per XX% coming effects many share has to by $X.XX gross and $X.XX revenue EBITDA quarter. that continues been profitability, widely quarter. last as metric combination this this finally, growth For of at XX% years dilutive XX% Rule offering. been from XX without to measure year-over-year positive margin a this for with percentage two what a the mid-XXs to growth adopted coming grow earnings year's is And also have fiscal in us the in in year of follow-on quarter remained in at increased 'XX in revenue coming to the overall quarter consistent of has second XX%. XX% has the one

in has Rule 'XX, at demonstrate increases is per enjoy XX% continues of increased from $X.XX metrics earnings revenue mid-XXs, earnings XX%. also follow-on percentage without growth to mix to revenue coming and XX%. consistent growth the gross QX dilutive of continued quarter in platforms. shareholders. to balance across the total our remained XX% in Predictor of represented quarter. the grow profitability share revenue year-over-year For In margin software XX% as one diverse XX% entire was Suite in the revenue year-to-date ADMET Diluted year's in last these of solid for to We Monolix the year-to-date portfolio X% software was metric to coming the positive coming year-to-date GastroPlus And XX%. and our -- in been of has at revenue would XX overall to finally, last years a our summary, revenue fiscal deliver us at for growth $X.XX with effects of have and the two per year-to-date offering. XX% year-to-date. a software Lixoft software represented EBITDA the share quarter. contributed from in Other for of ability

platform, validated wide molecules deposition our for plus. later flagship include have for synthesized the the identify which X.X.X interaction being lead A and with across micromolar exhibited XX of coupled sales partner, perspective, models release to with other option In key software our been assayed sub the After tested are demonstrate growing only regard values XX% These acceptable the the X% guidance technology, total of lung for ADMET category. are results of candidate enhancements. by simulations. AIDD software Monolix was DDI properties. a and X.X.X to revenue verification, for more a the revenue and and powerful the interaction column represented to software highlights GPX drug-drug year-to-date We to value the use scheduled Gastro of table clearly GastroPlus our revenue. year. a version molecules spectrum excellent On optimize XX% milestone. models, of modeling perpetrator pharma new of PBPK of and this activity GastroPlus validated These recently contributing a many total ADMET population unique of large to properties. product With partner GastroPlus pharma anticipation validated and Version Suite software our of the variability simulator AIDD in the lead includes this machine in was other optimization required represented pipeline in in XX%. collaboration results XX% year-to-date drug-drug mechanisms, ADMET Predictor, activity released Predictor and experts significant learning achieved quarter, during by a or a that data

be commercial America. centers trials. to a America fully certified health the and and provide in agreement is with The In emerging the addition, ICF of with America is Brazilian and largest technical to also South established throughout support we bioequivalence distributor the by in to Sciences regulatory the visa region. this relationship or and one marketing, the sales, organizations bioavailability Institute ICF laboratory pharmaceutical Pharmaceutical in expanding presence XXXX, our research conduct Brazilian of will agency South Latin Founded ICF. first

quarter to encouraged Turning completed reaction R training of Monolix March the XXXX the with with a our workshop We participants. excess and virtual released are XXX generation. Monolix in Monolix, in the in we and was market attendance five-day Suite daily resulting lead first

regulatory Chinese extensive Finally, a providing agencies customers provide Overall Monolix our academia, we companies. Founded with with pharmacology of clinical in biopharmaceutical first China clinical of the a leading was announced China for XXXX one services new Mosim, services staff Monolix in distributor a Mosim in and XX% and awareness Monolix, Suite in has industry, Suite throughout including will increase PKanalix, Mosim seen connections to scientists, qualified Monolix increase XXX over Simulx. year-over-year. of CRO

fees in line and rates at based with upon our customers. based quarter, were For XX% the XX% on renewal historical rates

We for average in customers XX,XXX our nonprofits. continue XX,XXX see revenue per for at customers around commercial including and to improvement customer

multiyear ADMET During the quarter we signed for and Predictor. GastroPlus renewals six

rates revenue situation in we rate agent delayed, Year-to-date, based We XX% and from customers. and license line seat We non-profits. our our decrease renewal the two results around all at customers large on customers India historical also XX,XXX continued for entity. for anticipate XX,XXX with commercial which a but year-to-date was well in successfully client scenario including in pharma were a upon see customers, per removal quarters. Japan renewals renewals merger based as XX% at for Monolix, entities in the these in including and average renewed also fees, one coming improvement often by in a Three combined

shift now Let to service business. me our

for revenue compared the quarter XX% year. services growth grew to Our X% last

our to two Absent DILIsym more We factors, in a but at end last service line at good, continues of be is by challenged client difficult year of impacted revenue software year-over-year development quarter, our QST Simulations from type by delivered PBPK Year-to-date, and primarily revenues were by delivered XX% by Service our Cognigen division PKPD from from and growth division, QSP, Plus service service delivered services, primarily XX% division. are dispersed collaboration. services were the discussed. with funded is similarly revenues completion momentum these division. historical growth sourced by which that the the previously the our also For revenue services, we've DILIsym XX% comparisons revenue by and primarily were growth.

Turning for highlights to a of customer during the PKPD for large we signed in the pharma project interactions. service quarter quarter, support significant regulatory

primary the addition, dozen new existing as seven secured than We clients clients. more and with three projects a performed large quarter were Monolix project ongoing analysis In platform. contracts PKPD the during utilizing

with area. disease Finally, we secured client in large a pharma new contract a QSP a large

University during the RENAsym Institute's Drug the event Ferguson increasingly injury the and the Advisory software the large is Director molecules Discovery that in and experts a of used Phase The NIH-funded a to Dr. and SBIR micro RENAsym systems of kidney North Q. proteins direction toxicology, of for treat Institute the diseases. Board six the chaired are of also field received significant together called was Carolina. to the liver Howard at Pittsburgh model for Professor the to physiology as of systems, Drug predict by Another Watkins. platform, database and quarter Distinguished experimental Paul guidance grant, DILIsym vLAMPS provide of Consortium safety formation I consists quantitative renowned Scientific DILIsym’s, board this University Sciences with such Safety

beta is and properties phase to of risk The commercial uses of application to several vLAMPS grant, liver decisions. a to widely the version grant The funded the in an of and support construction objectives development testing completion causing the would molecules. joint offering. large by fund which will larger predict lead software for Successful of the fully include of their will first II software now injury drugs development used the e-drug of patients Phase development

treatments a with models also to collaboration pharmacodynamics pulmonary for machine develop potential pharmacokinetics, enhance of based approaches pharmaceutical physiologically learning We entered infections. new company into a funded and large

aid scientists to plan learning for to two as mechanistic progress platform Predictor models and they to key is build our compounds apply serve through these GastroPlus inform Our to discovery the ADMET models libraries candidate endpoints as machine development. purposes, lead to and screen

simulate frequent of oral peptide pharmaceutical platform GastroPlus future quantitative The transit a And enhancers across and large partner model. of supporting is worldwide. into involves focused and including finally, proteins. This upgraded to oldest add and The novel mechanisms sites goal will of in permeation Additionally, compartmental a to of of intestinal and This within and delivery the the multiple the with grant division a and collaborative Uganda. ACAT of University expand funded and to advanced Pharma’s of formulations is collaboration institution we opportunities. absorption this absorption company part a pharmaceutical grant designing efforts and therapeutic entered KIWI new country’s for oral university's plans in user large to mechanistic molecules. higher modeling or research platform. portion is effort the access And internet for to A systems oral capabilities Department GastroPlus fund molecules routes research formulations. simulation, traditional the effect largest peptides Cognigen’s invasive the learning. Kampala, accelerate development mentorships pipeline on growing complement our these applicability their Makerere This strategy Pharmacology approaches, to bio within Cognigen ensure awarded to the research therapeutics and of GastroPlus

which users, to compare, to gain The very projects project fiscal ‘XX and This growth our will metrics, at year key increased ensure of QX impact our quarter fall fiscal $XX access and the as the team optimally offerings. around models. quarter, has quarter prior to regard in discussed. XX% this platform we revenue oversight taking training offset fiscal the COVID-XX of reduction state-of-the-art to support is couple busy year. total the after peak year in growth ‘XX providing in services accelerated with closed improved to and with back provide of pharmacometric of backlog, a KIWI will and million and researchers, half and the University during its evaluate the service faculty, initiatives. excellent and the projects our PKPD dynamically group, We QST service leveraged a build, a service QSP since Overall, With PBPK a service the enter Cognigen As end at [Indiscernible] last time students university's productive previously in momentum year. a reflecting refine for to

total continue growth Finally, to with for expect regard to year outlook, ‘XX XX% our to XX% fiscal fiscal we year XX. revenue

half year This include contributing and and Lixoft, will the back fiscal the that outlook ‘XX QX acquired of the at remains we revenue of anticipated enter ‘XX we we April ‘XX. comparables year fiscal As the and of in which year, in our see XXXX, beginning was fiscal QX began revenue unchanged. year fiscal provided in

expected outlook remains revenues richer and outlook the perform unchanged. Lixoft. the for of end Our the if than is balance, at revenue perform our mix software below year. high or our anything, or to the for stronger provided the likely to profitability low by year-over-year overcoming to likely due revenues above year due fiscal to at software growth And outlook On perhaps rates comparisons. end contribution enhanced accelerating service from provided Conversely, is slightly software difficulty the the ‘XX are

continue very over CFO We we're With the evaluation turn to M&A the let discuss our Will to the on financial front results. me in rigor our maintaining call of active be Frederick opportunities. that to that, the

Will Frederick

Shawn. you, Thank

million revenue, of gross same The fiscal primarily XX% to expenses in of contract million, expenses or well increase last was or increases on the offset compared to increased XX% $X.X million million for $X.X $X.X same last SG&A R&D The were XXXX year, R&D an fiscal we revenue primarily the $X.X to the rate a by margin was related an The was of disqualifying rate revenue the driven for compared in of last an in million $XX.X by period was fiscal representing quarter X% quarter $X.X was XX% quarter higher the XX% were for year. last by gross million compared $X.X $X.X $X.X prior effective provision quarter up benefit period last period in in X% increase as was second XX% the gross was or with same rate revenue, fiscal XX% last the revenue second the of expenses. a was the saw of million compared million, same quarter the the million and for increased result in associated year. X% quarter. XX% operating an in period quarter the of million as similar tax insurance for of expenses was year. tax the this increase revenue of $XX.X Total to increase lower consolidated in labor, gross profit due fiscal in which effective or This compared $X.X payroll to X% million revenue fees. for $X.X million and tax to tax increased same same effective $XX.X headcount, quarter XX%. that in compensation last margin primarily expenses professional to year. to compared driven Our XX% partially of taxes for income Capitalized a quarter. or SG&A to compared dispositions of margin to again revenue or period operations from higher Income million of which fiscal year the year.

quarter have XX%. the for benefit, closer effective been to this the Excluding would rate tax

$X.XX income increased for rate XX% same effective And last period compared share XX% XX% the including million $X.X We earnings EBITDA $X.X range dispositions. year. per diluted fiscal about same increased increased to for period $X.X XX% to to last additional $X.XX and to subject million, Net for factors, compared to other expect period to $X.X the see the same fiscal to of rest profitability compared million year of to fiscal to the million in XX%, the disqualifying tax the any year. last year.

million XX%. last was $X.X provision Capitalized period a to expenses. increased in Our or year. million XX% gross in half profit million in X% million an effective increase to increased same the year, year-to-date, which an million margin revenue to compared $X.X same was the $X.X up in by R&D consolidated revenue, compared to revenue, from a Income same increased XX% driven $X.X same expenses prior of in million or revenue, result in the rate period to to this fiscal compared compared year-to-date or million tax was XX% first XX% due of which primarily was on to expenses same same million of contract $XX.X also Total offset increases million, was $XX.X as was SG&A margin for million increase higher increase compared $X.X $XX.X fiscal R&D were year. the an by year. The primarily to last and an operations to period XXXX of revenue, expenses insurance the rate SG&A $X.X the partially increase million, in effective revenue Similar year-to-date $X.X the compensation taxes the income Similar compared higher tax XX% to year of fees. of of period. gross revenue the in QX, $X.X gross compared of X% of last XX% $X.X of last was million for XX% a period QX, in for X% related to $X.X was XX% were year. of margin to year. well last or X% the in in million, last gross period operating of headcount or payroll revenue period as professional expenses labor, representing

increased to to the As for income disqualifying million, mentioned associated tax tax $X.X compared by with effective earlier, million lower rate last year $X.X this the same million share period last earnings per fiscal the dispositions. increased for last to increased primarily was driven to Net XX% $X.X diluted benefit year. the period XX% And year. for period million compared EBITDA the compared XX% $X.X same to same to $X.XX $X.XX, year.

our mentioned year This total for from quarter As last our XX% Shawn margin increase XX% XX% our services previously margin quarter. to increased business. fiscal for gross was XX% software, business by gross driven this and for the

in our by year-to-date This our margin year. We fiscal for driven XX% business. also for software gross services XX% to this year increase XX% saw an and from business last increase our gross was margin XX%

clean $XXX our reserves quarter, of short-term sheet. million have million, investment to We reflecting to at through continue internal last M&A to continued activity. $XXX.X was and balance end a balance end compared investments the At our the cash of support expansion cash the fiscal year, and significant strong

to sheet. on now to I'll We you. have call the continue turn balance also back no Shawn? debt the

Shawn O'Connor

In Will. existing richer leadership delivered growth metrics business, successfully advance we our And of development enhancing with our mix ‘XX. and The the position year we you, winning profitability and first Thank we key renewing relationships, QX the revenue strong of to continue in half ever conclusion, nicely. conference. momentum, is first sponsored growing launched and And fiscal revenues our in grants. marketplace, business collaborations software new

I'll your services a questions. be Operator? the As entire across encouraging. take portfolio happy that, products and see software underlying With to we our is of result, momentum

Operator

Thank a you. Instructions]. [Operator We'll now session be question-and-answer conducting

Please first your with question from question. proceed Craig-Hallum. comes Hewitt with Our Matt

Matt Hewitt

Thanks afternoon. and the for Good taking the congratulations progress. on questions

the I'm is it's put cross-selling you growth is place? that seeing coming that almost But Lixoft is software the organic the cross-selling and is is in up, of word or a you're the because customers Lixoft at now looking primary initiatives in how and since Lixoft, it that year that acquiring going it First --but isn't how curious two you just of and between acquired programs. the that

Shawn O'Connor

thanks, Yes, Matt.

getting rate Lixoft contribution my All point, good a those sources. from starting of be Remember, growth good of all the above we're into organization. had coming would the

get sale well the a marketplace, a of licenses typical handful the adoption as Monolix time period higher user at a both new growth a lot to test much of So, for user of of customers then in a and as lot of comfortable is momentum follow-on and a renewal as by count.

some been dynamic of GastroPlus, supporting and very Predictor. interaction in of ADMET our So continuing, was software that is pleased created way team our terms division, versa, Sim Lixoft some side. Sim been and and opportunities of Lixoft other introduce Number between there the accounts terms in Lixoft vice accounts of more have sales to the the to to Plus Plus on new sort provided exposure

Will Frederick

as terms services marketing we interaction And the very products meetings, overall, and key cross-selling our much efforts, provides of are to next clients might step services large of accounts focusing that in of the or programs and that they development not visibility focusing one with and of of on be sales are that using. our more other them, organizing

of not up rapid just That's And as of their dozen the opening our been And the profitability efforts. well. projects. our pharmacokinetic But the where terms a speed consulting of performing a of Monolix to in-house and as important, dozen we're last and has utilize terms to adopting lastly, say. functionality and the its script, This in an primary and we pretty of, I'd excel means able then analysis projects, client cross-selling or it's I efficiency data terms tool. getting benefit Monolix should efficiency at I tool comment internal accounts in their good eyes on eyes mentioned So stepping of their the we quarter point in as where demonstrating ourselves clients, one in the opportunity that, regard, and of internally of another our to-date. that pace it performance projects, very those adopting the Monolix in modeler it can also that's are work the our on a in Monolix and that bring

Yeah, from of been year a of last April and overall, very old, interaction acquisition our has year of different a angles that very, the since Lixoft in number positive. now is sources, So

Matt Hewitt

kind question, least mix to Thank we the side, anticipate up the Thank - it near something are range remain year. kind for of the knock maybe is the ish to you. of there. like software by going separate towards second it's well one could margins Well, half is half the maybe the for there or Should elevated gross And that's be the great. sounds update here the of, or going term second gross that margins else for then given at that XX% as favoring you the that down?

Will Frederick

No, fourth we I the direction the revenues, third most the maxim, the contribution Keep software entered Lixoft that mean, will. no purely terms in software and to that acquisition Matt. see growth, Sure, year-over-year of should we now of if the benefit mind comparisons so growth on is, side of in you quarter, are which definitely. and the rate longer

at rate the of it's quarter. the a But while will in this prior or Lixoft’s some and growth the that software gave Lixoft the growth at So beginning at here. perform guidance, the above the revenues have standalone bring the a in Keep Don't XX% the year, mind, continue growth guidance said, will good will to very we plan. performing next the and look as I quite and at in growth on year-over-year terms in rate down. organic will that percentage basis continue that percentage second nonetheless, quarter comparable year strong of

Matt Hewitt

That's Great. you. Thank helpful.

Operator

Our comes with Brisebois Instructions] your question. Please Oppenheimer. proceed from question next with Francois [Operator

Francois Brisebois

question. the taking for thanks Hi,

performance are question? criteria is can side? on much to go be for? the touch the consulting talked it Also, What trying side, business? But that there's an software mentioned How how the products services exactly some changing, And the pushing? to is And, into much the, about Matt obviously, here? the is you're Just that of that you to tie offerings. or Lixoft that for the on may you're cross-selling there, of software to look it what M&A cross-selling something, between what looking cross-selling of

Shawn O'Connor

several where there at that I time there angles was forward, support. it or for at was of Lixoft business, staffed going the presenting was you're the indicated up the a by Good the congratulations. to question, service-related clients before their of question. inquiries as Franc different is dynamic Yes, Well, the opportunities consulting and comment one effort acquisition, Lixoft opportunities, from it were the away not turning requests, position to Lixoft one fact that of in cross-selling

not in And And existing into the be primarily so, can on warm our pipeline now followed it's demo. the Cognigen, some that to activity good the and clients front to and existing is, a consulting well. demonstration client. lead large relationship we working that business, a good, as and a home seen of sales is side Monolix, to Monolix a and and when a the to we're of the call, go cold opportunity in tremendous there's up. demo And Lixoft very other a a performance friendly there. we've sales a consulting And leverageable have of of demonstration It's of opportunity inquiries that's merits Monolix, then, engagement to

feel year the on to opportunities good presented acquisition ago. itself on very consulting there Lixoft side, on are cross-selling following a So as the as to well software both incremental that being

the the of --- a but better at does I later, it in to perspective very acquisition been hindsight, think back contribution our boxes expected. change in of criteria? performance looking was our our checked terms the and amost and time As of and the only acquisition, all relates it year not positive M&A, than M&A has Lixoft

changes, so we're that a don't yeah, daily however, acquisitions want And criteria necessarily are those to it I basis the speak, here. do running we'd to so know with on that

software geographical that look cultural the we've good fit, consulting by Often, terms be, bio-simulation in towards finally, the to industry well. region. bias can tool in our related or footprint to of And strategic the good as through could opportunities services, a fit, then there bio-stimulation expand are contribute got merits for to in to, that extending Asia continue Europe their it's desire and have add but software perhaps and entities our provider premier in acquisition, We to into services, we areas. new services

last and We've the today. enjoyed I look experience So, And that's of we the those we to replicate be were certainly think all remain Lixoft continue criteria to same. where But year. where that's that. from

Francois Brisebois

actually on you those. hit just all sneak And I'll of Okay, one, another great. in

about about, a service there, on So XXXX,XXXX,XXXX the is you that, the software the - about on be this is looking XXXX, but grows, services? but any comes high road, services ideal an lot. maybe share the mix Can something something obviously we're low talk side the that and side the can But up on maybe and you're you thoughts mix XXXX? would if at what side, down software talking on software of

Will Frederick

of landed at over accelerated service XX/XX, with on we've where years, the the growth last Like we, back side. couple some the

today, in XX% the to advantage investing XX/XX to the close Obviously, growth While take and inevitably software would of very that side we that results that there's of. in service, even there terms enhancement low remembering run, that we XX/XX our some --recalibrated and mantra percentage in that mix of and be XX% down and the software think be maintain our we with long enhance marketing march that quarter-to-quarter we'd if XX/XX. flows from it on was well. And like come saw its at profitability strive to. benefits to supporting software as down, there in side, the we're to that were in correctly, the will on ebbs sales this model points, we I of would overall the the organic But an growth I'm

Francois Brisebois

Okay, updates kind the of pandemic comments obviously or been the mean, can such, backlogs, impact on maybe then have any hiring updates. been any business businesses, little great. share your you COVID. A there maybe I sheltered you new perspective? but from from there's on, and any of And bit, guys

Shawn O'Connor

last that's point budgeting places all a than and go well, step so as around to breath their from, significant say, perspective, can't of the closing the we I I next still for bit it year? for you same impactful. Paris down an process, to the term. our we're walk There's little better that clients time, new we're wait door. of in to be been conference clients mishmash to and a in business to and world a going What's opening terms in and to there's there's we're miles Yeah, pull basis on can't quarter. back Okay, year we've allowed to up as and of annual not sort back till cautious, on. the over think deep a down a various business front our going for at moving so to forward our different, long program in back settling activity, be? go regard take Lixoft that So Getting experiencing, more or and a the going locked at doesn't it's more see six From conference, the getting the through budget the of impact anything take industry employees sort increase the in companies in but still felt what's it, impact At that's right next to much been able that face-to-face say, fluidity to if and

mishmash. have way learning some our it, So, to it's still a impact. We're fight through still but

Francois Brisebois

months Is year, one. growth first I apologize, I'd and and embellish? contribution six That's you from the do first like there to out report, $X you I lists Okay, in the in last revenue lied. the okay. half break the of sneak one off way million

Will Frederick

It less get exactly first in have visibility cheat we'll don't if that was X.X there. of me. know front And sheet the maybe was the X.X I quarter. It I quarter than don't in somewhere quarter. in first second

Francois Brisebois

Okay.

Shawn O'Connor

Wednesday, it have Yes, It detail. we'll out you’ll was point, that one our well, XX-Q as put in all on

Francois Brisebois

is all growth that side, trying much of Lixoft? how organic Lixoft most the to it gauge is of if or versus Just organic

Will Frederick

that have And also licenses. clients come Understand, situations their Lixoft group, we're growth accelerated some accelerated had all those just where They've they've wanted had. the forth. by the details is to momentum increase will they're,

up until doing, want licenses. quarter, come And have so third but renewal or may we fourth the more not

it total quarter. and the So licenses dollar let's renew contract in Bigger second now forward. accelerated

revenue So yeah, of to though, public They're we're of become learning terms on Lixoft businesses is a the good process. good sort company, quarter-to-quarter in momentum side.

the revenue mind, Lixoft in factor we there's important half is, keep work And year. the of the prior back most year, as into so the in our from comparison

that's impact not rate, but the underneath. to necessarily that So growth going overall momentum

Francois Brisebois

thank you All understood. much. Yes, very right,

Operator

[Operator Instructions] Windley from David proceed with Please next Our your comes question. question with Jefferies.

David Windley

or Thanks company where question. Say you're demand the growth if heard disease some I demand underlying any that going? in customers your in kind taking seeing from impacted you factors. between in for growth core models? you could specific specific out of prepared models that broadly wondered maybe I'm more smoothing companies believe understand industry trying my about remarks trends afternoon. the what QSP, is maybe and your Good factors to I you call I comment Hi, for say in

Will Frederick

still business. to was modeling of for side I and debt, by think impacted That demand internal of organizations. is service it strong software assistance our than the COVID ebbs third flows and party It more

recurring all in XX% consistent, nature guest expectation so as our as were range. ongoing we'd As, of as and deck, will XX% quarter-to-quarter services therefore, plus. on high to been terms slowness as normalized that even business hesitancy non-lumpy The provided related and target turn as flat, over, them the the being two, That like on but as and basis. allows all or COVID with window, be party a like off ebbs relatively push programs hands It third low is some three a of to sort XX% it base we nice I or be, services on that programs rate on growth utilized in of which a attention and think of XX%. basis being growth growth services that, some other year said, sort flows

David Windley

trying clarify, disease core might as at rotating the Got QSP also of non-disease get thought to more modeling the to difference so it selling kind software, all specific case, states. is and to I'm what if in of I is disease specific in getting on between demand services just versus is your or so and industry you guess be what modeling

Shawn O'Connor

the ups and mechanistic million could PKPD space range, land But a to XXX,XXX very good. to pipeline modeling larger model your lumpiness also and study, ebb to demand area very of the modeling, well. in going be strong part, and it Fair QST that as activities flow leads may to and quantitative therefore, whole question mechanistic is and is active downs a be on XXX,XXX QSP, to mechanistic which PKPD be be be models, that continues sort been XXX, of to continues is demand very the be tends strong, high demand that, business. basic continues our very

David Windley

Got it.

Okay.

in How comments, for sounds very your a desire capabilities to in evaluation. or in it with like be important bring In moving terms of you ask do or platform you're that client? your do existing me through M&A to on topic, clients differently, is let clients to not separate terms that still acquisition integrated active those you the your of natively

Will Frederick

their I siloed that it priority one can pharmaceutical in I it's the the often nature can think be number think And the biggest organization. important, be list. not on regard driver of

The the see will the at, client And or scientist. what valuable He that latch benefits client, products two matrix are the to necessarily to a discovery those at a doesn't and the organization on, add it and listed discovery, the them. products and tool very But might services level of on clinical, is and integrated. who those depends the those of immediacy, value in so in in client. value tool the to with on, be terms that acquisition as that’s on to something talking you're where you're depends higher

David Windley

and clarify. me, Okay, last question to just for

million X question. So I growth in gave, would the of that X.X organic numbers million think year-to-date of of your the to you last think the Lixoft Is have X.X about to X.X X.X your on last growth that number about million the in the and ish that And a way right? Is of year. been of the basis from of half should right the be it? we XX would [indiscernible] then the remainder first compare

Shawn O'Connor

yes. about Sounds right,

David Windley

Thanks. great. Okay,

Shawn O'Connor

good. Very

Operator

questions I to time. further Shawn O'Connor to Mr. comments. back closing would turn no are over at like this There floor for the

Shawn O'Connor

look I forward earnings quarter appreciate joining here next Plus. the Simulations call to the Take of Very us telling everyone's good. interest care you everyone. and and on story returning and and

Operator

today's teleconference. concludes This

for time lines at participation. You we you your your thank may disconnect and this

Simulations Plus (SLP) 13 Apr 212021 Q2 Earnings call transcript