SLP - Earnings call 4 2023 | Simulations Plus, Inc.

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Operator

Greetings, and welcome to the Simulations Plus Fourth Quarter Fiscal 2020 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.It is now my pleasure to introduce Tamara Gonzalez from Financial Profiles. Thank you, Ms. Gonzalez, you may now begin.

Tamara Gonzalez

Good afternoon, everyone. Financial Plus me and Chief today and Frederick, Simulations Results XXXX Executive the Plus. Will Call.With Simulations Conference are Chief to Fourth Fiscal Quarter Financial Officer, Welcome of Officer Shawn O'Connor, Please note earnings will remarks. as serve prepared our supplement today's presentation, to which a we that updated quarterly

include we involve on the call these the for this will and actually a reminder, the no You Relations be like and at open can presentation believe, access place. assurances that www.simulations-plus.com. There call. our anticipates will website discussed forward-looking today uncertainties. Words refer may information that can Investor of risks best our After statements management's commentary, expect as estimates questions.As take to

Further in company's factors I'll over with that So O'Connor. our actual turn company's future the the results Commission.With call could reports on statements. Securities is risk information and contained differ said, the and these Shawn? quarterly annual significantly Exchange filed Shawn and the to from

Shawn O'Connor

Thank strong revenue you, strong today like our and execution delivered and results.We I'd for Tamara. XXXX, for fiscal XXXX and building fourth team's you everyone, discuss fiscal acknowledge our to on especially Good earnings quarter customer results afternoon, and relationships. to joining us impressive thank

spoken in dedication model.Conditions team's over our growth environment the helped market and while similar Our to to and throughout business navigating remains effort what drive our past of demonstrated year the a have we customer-centric challenging several the quarters. to strength

earnings us are macroeconomic fundamentals to large these fiscal this and small in from upsell diluted said, achieve price pharmaceuticals to challenges revenue to affected share impacted fiscal funding our has by offset our helping slowdown Purchasing continue XXXX, increases turn market driven remains That for were resilient. throughout of We delayed conservativeness. been to in rates by scarcity a and biotech by year.The also on targets adjusted guidance underlying the per customers have both the from uncertainties course of for our who see pass renewal that ability and segment.

pace and bring development in eventually faster, for past revenue earnings modeling we such, revenues the revenues XX% we tremendous historically. that services efficacious were to Against million this line early ways to in and $XX.X a were in of to with challenges drug pharmaceutical market. guidance anecdotal Fourth customer in feedback by essential that anticipated slight few believe with drugs have XXXX time the we not met growth We optimism at to to have uptick slow XXXX.Based companies a we've levels fiscal to we as for are have some over As XX% we and need companies, we cautiously our year up up over been more fiscal year, we our XXXX for this but on of the these funding driven and needs our delivering quarters revenues last and will as budget biotech reverse grow we XX% seen revenues the X%. expectations. pharmaceutical seen last guidance, seen investing given simulation fiscal provided when XX%, find backdrop, software increase receiving, in still cycle quarter large XX% optimistic enter

$X.XX quarter of quarter favorable in X%.Turning and For solid. EBITDA for of to XX% share. growth million, the income and per net quarter year, or adjusted gross our were of year and a were the XX% was sales remained million $X.XX Gross the by $XX.X to the pass software quarter and along XX% XX% income the reflecting fourth mix revenue revenues per software increases. and total or year.Net price for for revenue driven for Adjusted XX%, $XXX,XXX XX%, ability Adjusted EBITDA Fourth share. the was of margins up higher-margin was fourth $X.X were margins profitability. of services

the fiscal the is year, year high fiscal team of our at $X.XX $XX income million $XX.X per I'm end $X.XX on for our of $X.XX million the XXXX $X.XX diluted and delivered guidance. was income net software was share. segment's the results For the or share, performance. or year.Moving the net to proud for very fiscal both per our quarter to and adjusted diluted This

XX% revenue and increased XX% for Software year-over-year. the quarter

Simulations as impact our align impacted anticipate revenues in and and embedded on rate negatively pharma, Plus benefits contract contract quarter in not and flow during we for nonrenewals renewal business both initiative the with of biotech fourth candidates base as in and activity harmonization will have fiscal accounts the purchasing complete, renewal and now the software see normal harmonization client a and harmonization occurrences process, M&A customers course as forward. always we revenue was expect in Our going XXXX. will, upsell by we however, out result our the We lower licenses.Our greater have additional quarterly of our same our essentially become is expected that renewals revenue now to There do simplify played markets. future and be several year into to in that any visibility CRO

XX% had program increase booked license in shift contract to the growth The team solution The Revenues renewals QSP AI-powered for cheminformatics XX% referenced business the XX a the to our business XX quarter largely was not saw renewals. GastroPlus in upsells quarter a and due Additionally, added the The fourth due X quarter. new fourth the our model the peer-reviewed commercial XX% for customers. of shift in upsells. PBPK renewed cancellations. strong were during quarter in journal to client was XX customers. increased in for the to strong quarter.GastroPlus revenues articles contract also and due X booked quarter added new and Predictor, ADMET the year. in couple team

XX% thanks to X%.Revenues MonolixSuite, grew upsells and tools pharmacometrics customer new the for revenues addition the one in customers in of Predictor modeling quarter, user-friendly most ADMET year, the of X quarter. the the X For increased in

analysis and software quarter, held healthy at both user-friendly scientists leads million, XX% successful program this year completed this awareness XX increase for total grew fourth our and evaluations. year. supported time in to For of due the efforts community in we've noncompartmental revenue the tool to quarter and primarily summer the segment, the and The and of of higher the of down addition of services the and XX% This from made of XX% XXX is was the backlog XXX highly for Services team.PKPD the for MonolixSuite with validated year, X% marketing, features services attention increased served This the is team year. backlog community.Looking and MonolixSuite exemplary for over investments bioequivalent representing compartmental last grew benefits the countries $XX than school. a in educated and the event fourth and for revenues revenues NCA and entering has revenues sales fourth scientific projects. a XX%.During growing the this X% quarter new year, Immunetrics PKanalix increase our fiscal

excellent bookings During growth. that to overall the PKPD contributed quarter, saw

on majority the some quarter, fixed materials, projects revenue effect versus billable growth. garnered price fourth the and hours of and time During had

nature for as for the backlog PBPK would This the into appear but is time growth X% contributed and we of have the to the fiscal higher benefiting was that revenue this projects materials reach X% in our of the and typically the fixed to acquisition these XX% to With quarter year.The projects bring enter contribution. projects and fourth of Immunetrics down margins trend XXXX. time revenue of and in mid-XXs quarter, the price margins grew and to the likely revenue upon based of services revenue as year. the benefit the for percentage materials of continue exception for XX% of as year, higher is the quarter a up services terms from above.QSP/QST compared

staffing events, excellent related Although to for the related quarter team fourth hours lower the by impacted temporary availability year. to life the saw growth was billable

to recruited new are for year strong our start pool. as year. had retention talent, expected for to year. XX staffing return and top fiscal PBPK Our remains scientists amongst new services Services outlook the good talent a we strong growth saw We hours hired normal and the

notable added Immunetrics the also also in quarter. acquisition.We XX the in some highlights had We

on address, the accepted in of submission significant in global XXx or value our to value-creating expert segments. granted. minimal document innovation clients. Our proper the same just in our model wasting GastroPlus biowaiver and culture successful examples bioequivalence the agency that from blockbuster produced incorporated review leading acceptance of build a biowaiver an and QSP colon to delivers solutions with and of project, to of part multiple PBPK PBPK questions QSP dissolution a to liver dosing was some services summer. will dissolution The trial client with results. into local customers to first-in-human experts, of model.Our projects were utilized team cited very their an due dissolution software its recommendations the both critical of was with GastroPlus target approval. criteria, study a public accepted predict were cited we to new with fibrosis in a our the After III therapy. which in to build and of request regulatory a the partners With using in specifications.We for provides, when I with used team hand, GastroPlus a the following The investment data of Phase approval work investigational example critical team established this GI dosing subsequent justify our and models that allowed the specifications, our for pair a we FDA the a the and proceed drug.Our bioequivalence the as included to requests consultants the which to and developed the license its and out-of-scope provide played this therapeutical or quickly blood. strengths estimated dissolution projects likely support role The for the of model is scientific a study humans completed batches and rejected. method. being The than submit to space a public agency expertise which which XX% running acceptance resubmission, client testament [indiscernible] a important then IND modeling results a recommendation specifications In was was for in The model safety justification pharma our that formulation a new by by a the supported PBM value concentrations applied and key a is optimize the greater tool supported and GastroPlus disease IND systemic These The nothing few of support dose XX systematic range multiple the wider pulmonary commercial documents from client a customer-centric drug, was exposure development harsh, emphasize and was of return model biopredictive review the simulate utilized to in range request and the driving was PK A for than myeloma the and software identification needed approach, for responded doing the of results. benefit from gastrointestinal already to translated led dose safe Phase new alternatives, expert validated data trial. guidance in We and filing consultants. the resulting to medical provided large large resulted are our levels follow-on of clinical company's the FDA EMA accepted regulatory to the are business was flexibility also regulatory in compelling work results results, a animal our trust.As in a and the clients achieve guidance with our across EMA. a These and this

retention our inorganic quo strategy that our growth, we that technologies. corporate upon for investments and create to growth signs line in a Looking will surface development in in seen enterprise remain perspective, shareholders. This setting employee R&D, status positive committed ahead, combines investments product value internal outlook. have From we and our M&A we includes and operating leverage to are guidance we recruitment to market, organic strategic our and with evaluate criteria.While some based a continue long-term are

share we to contribute to $XX For of software to $XX expect services million. million mix revenue diluted Will. to that, from to range the fiscal of to range earnings revenues XX% revenues increase to in XX% or increased From call XXXX, we a to to we to of and XX%.And an are $X.XX guiding XX% increase the turn reflecting perspective, per the of $X.XX annual XX% Immunetrics. to Further, expect XX% XX% or services XX%, with contribute the I'll in

William Frederick

another and We with increasing X%. services Thank had to you, XX% $XX.X revenue strong total quarter Shawn. million, up software revenue up XX% revenue with

XX% the represented revenue for of total revenue Software quarter.

increased fiscal the For comprised XX% in in XX% software of total year, and services X% $XX.X increase revenue to revenue a million, revenue. increase

total in for from for the segment. margin software the slightly the revenue quarter Software gross improved strength benefiting revenue represented year.Total to XX% of XX%,

margin Total flat services XX%, Software margin XX%, to year, services gross primarily the at XX% decreased XX% fiscal last year was gross gross margin Immunetrics. due to at increased with and XX% the software margin XX%. at while margin to of for addition from

of XXXX software Immunetrics, gross the GastroPlus XX% may margin fiscal XXXX.Now Predictor fiscal XX%, was XX% ADMET other MonolixSuite and compared XX%. our for addition represented software quarter. be was the revenue. was for software turning to overall impacted With to of

XX% and other fiscal was ADMET of software was X%. MonolixSuite GastroPlus represented For was year, revenue. XX%, the XX% software Predictor

XX% For customer to from for based on our renewal the average per the $XX,XXX. increased $XX,XXX based to customer revenue to quarter, fees Also declined rate accounts. on quarter, XX% and

up rate year fiscal fees based on $XXX,XXX, accounts.Average per the our $XXX,XXX declined XX% and customer the last for to For fiscal fiscal to from customer to year. revenue year, XX% based increased renewal on

PBPK we from average from was renewal rates fiscal PBPK them services, reminder, lower in services, requirements. driven biotech was are a consists and services breakdown XX% X% services for year experiencing services resulting the regulatory primarily an provide the QST by other revenue services regulatory revenue from increase business, services. QSP/QST global to help customers from other to services from The the QSP our customer. XX% benefit and from smaller from the customers, nonrenewals PK/PD other primarily from and breakdown PK/PD XX% for are quarter per X% one is from While compliance XX% XX% services, revenue services, XX% Shifting the of services quality services.As we meet services

help We backlog remains increased to to training projects increased our million services from XX%. to also the on backlog simulation year succeed. a focused Total services modeling options provide last $XX customers on comprehensive learning worked compared to XX with compared and XXX of around year-end during $XX months quarter million variety XX% to revenue and XXX to last year.Anticipated within

resulted was development personnel the previously Turning or statement our of increased M&A Income the million increased $X.X in R&D and the for in R&D to million XX% a for million mentioned. XX% trade discontinuing have or loss expense our in $X.X $X.X of capitalized revenue million primarily costs costs, income XX% and the due $X.X by R&D a costs $X.X to the related compared to the general quarter. and headcount $X quarter, $XX.X compensation compared charge in million $X.X $X.X and quarter consolidated to Immunetrics of expense increase an million.SG&A increased total saw $X.X compensation the of year. Total in $X.X of quarter million from expenses to increased million increase for last million $X.X an of and we XX% for a acquisition, includes these for This costs expense expenses, its with were to costs. $X.X to million costs.Excluding impairment quarter increase last of year. products, cost for the quarter investment or compared due from to Immunetrics software impairment to million personnel million the expense M&A million for to revenue increased the million Immunetrics costs, name $X.X to R&D SG&A increase compensation higher revenue would charge in operations the been related compared

decreased Immunetrics EBITDA consideration of quarter, million decreased EBITDA or diluted from interest, expense amortization, income last EBITDA contingent have accounting was and and reconciliation for the transaction-related $X.X to compared tax website.Turning to and per per to million, also or diluted currency on these million $X.X XX% increased to $X.X benefits our quarter. for expenses, compared $X.X tax and and per of million share release expenses, earnings income the and income income adjusted for $X.X calculate diluted year.We benefit share charge would this was stock-based $X.X any a interest was for these in earnings adjusted to of net to statement related on XX% acquisition the Other and value charges to million taxes, We adding adjusted compared Adjusted to a income due million been XX% versus metrics year asset fair the quarter per any in last Other provisions gain $X.XX by the our to our financial provide quarter Adjusted impairment $X.X GAAP $X.X year. earnings of million or these fiscal last relevant on or operations earnings Net year. year. earnout.For change loss the margin adjusted to any from was items. earnings our million exchange, revenue last portfolio. non-GAAP higher back investment $X.XX depreciation to compensation, consolidated for metrics returns of $X.X income EBITDA rates margin share quarter XX% diluted for income Excluding the or $X.XX. included million share

million version which personnel XX, design ADMET year, increased year. includes significant expenses. $X.X next in of XX% to to and product expenses in $XX.X our This million year. was to the revenue year. of the $X.X for Capitalized on compared costs our fiscal enhancements to of XX% the of due $X.X the the the version February million or year. development primarily or costs AIDD last compared of Our SG&A the by reflects $X.X total was product last artificial next version were compared MonolixSuite $XX revenue $X.X to XXXX, our of development to and XX, XXXXRX, or R&D XX% which R&D R&D were GPx of million million expense $X.X Predictor, compared module.For newest XX% revenue last version million last investment released million or Version drug increased of million labor-related to increase GastroPlus or million was This $X.X increase XX% a revenue employee intelligence of

Additionally, for is have due to and mentioned. would costs acquisition Absent write-off and the in and been merger $X.X XX% overall million, the the from previously name increase costs, year XX% increase SG&A SG&A revenue.Income margin trade $XX.X an decreased while expenses expense XX% in or expense previously M&A these impairment operating the million to operations to mentioned. Immunetrics was compensation charge costs, due of

have Excluding income these million to $X expenses, income other or and driven million revenue. due rates XX% interest year interest million, Interest last from of operations was by income $X.X versus $XX.X rise $X.X been million year. of in would this the

reflecting rate $X.X other XX% mentioned, the previously expense tax related was included year of compared million year, year. effective an to Immunetrics expense million acquisition.Income last $X.X million tax $X.X XX% this income versus last As to

income rates decreased year. tax favorable due tax to fiscal effective foreign the Our for mainly rate

rate without benefit we in decreased to $X.XX.The effective XXXX, our effective XXXX our the earnings tax income rate. saw XXXX fiscal $X.XX $X.XX revenue fiscal same share earnings XX% we XXXX. million be $XX to estimated tax EPS fiscal $X.XX diluted reflects effective rate share $X.XX. would We in tax to of of higher were year to expect diluted per as guidance XX% $X.XX.Net Of of the note, If in the the XX% be range decreased or million foreign for $X.X Adjusted in for fiscal and to from the of realize short-term fiscal and Immunetrics to balance was the tax guidance impact million accelerated year per for was margin year XX% to our range flow, cash share compared repurchase of to XX% fiscal change less exchange $XX.X free currency The year was million fiscal million EBITDA million was for million payments, $X.X with in our and the net the the adjusted for year.Now $XXX.X $XX.X last sheet. the year cash We acquisition. turning to addition million EBITDA and million. for driven Fiscal ended margin in our $X.X adjusted investments. adjusted the dividend $XX cash $XX.X primarily by paid EBITDA was

continue free now for turn have be to partnerships.I the and strong opportunities will well-capitalized and seek We acquisitions, investments cash strategic call to Shawn. back to flow

Shawn O'Connor

team's you, greater which challenging implemented results we program, Thank Will. year digits while from backdrop. pleased fiscal year. XXXX XX% leading We our business I'm good double harmonization a revenues. proud services of with team our navigating and visibility with a in software successfully grew the is increase the I'm into We finishing saw this our delivered accomplishments contract that to performance with in capital our and our very backlog. pipeline customer from We and as part Immunetrics planned is accelerated accounts overall a Immunetrics repurchase has including of base. Simulations the of in the healthy sourced Plus acquisition the going. and immunology with new completed pleased how has strong oncology of activity, are completed reputation integration plan.We our a markets our as allocation program share

in elected we meet their Simulations recruiting.I'd scientific retention We our and But her richly unit colleagues at named at to VP Plus was for our was achieved people. the possible we leadership and This scientific client service talent we Plus. especially recently development made XX Directors. in PBPK. year development. an guidance the building achievement for Pharmacometrics Amparo of de made throughout last Services, provided at Importantly, We stronger Chief thank Society like Simulations rewarded or good demand, Board the to critical the drug her at Officer while to relationships added of International Pharmacometrics, Viera and business by investments in honor to X our for time, strong maintaining Science la model-informed advancement the fellow, of effort dedication thank AAPS team. of of the all Lukacova, being Pena, like ISoP, leadership I'd for by resources years maintained to her and year. customer same who and our PBPK And

our clients and day develop and of Simulations team esteemed Our solutions. is market your to I'll And spirit We're more fundamentals help here growth delivering resilient and talented with effective turn to create are safer drug revenues, the goals and every meet our conclude, today. generating Plus questions. our operator our to more at call cash. well-positioned profitable for to of that, value growing for the for fiscal time the strong.To do for over innovation The XXXX.Thanks energy underlying with

Operator

Francois Our Instructions] question is with from [Operator first Brisebois Oppenheimer.

FranÃ§ois Brisebois

just quo guidance in it XX% what's Immunetrics Maybe the was just kind funding next the status for year? talk can that's that revenue just of to the idea it's you with hoping you range next that maybe the you're get difficult. or the terms targeted I -- when continuing biotech going the revenues year, guidance So you challenging wondering, Why is the of there? of us on. the side obviously be and to of for in XX%, would mentioned on XX% keeps to your remind XX% to milestones that be about environment, wondering, status there

Shawn O'Connor

and in market a together, good budgetary the get in and year gotten those for terms that marketplace was when conversations end those last the next twofold, of active, for of budget litmus budgets calendar look budgets very running year. we say to we has you when in last place. say year, spend Yes, towards of test taking more put as processes in but year look of always this cycle and it's than clients regards, Certainly, In terms before one changed. year the get terms the market that Frank. positive more sure, to year, of that inclusion are we've in back it the I Yes, flow of year at calls time good input, always both kind of it frequency of the data have a you next our good well quoting end the compare itself, not as forward the enough positive some

terms QSP on the into their our business certainly status that's the of base of in our to with their and onboard, time. of of to point a in So this where been based the terms sort quo of funding short disproportionately XXXX.Immunetrics cautiousness out number our pipeline, kind status guidance of picture. board, guidance embrace has the comments been our that And them that being presenting to environment a them. in And pharma models, build still budgets large similar been the able in in pipeline in terms impact we and window out quo, is last look quarters, in at great biggest take Most oncology brought positive customer context backlog biotech and it of been is, of 'XX upon time in of of has the being certainly addition. new it into bringing they've has capabilities the expertise, those base the market therapeutic areas in customer immunology some

opportunity good look here going acquisition XX% contribution 'XX XX% in the outlook year. timing earn-out fourth next growth that million year. momentum the the and that XX%. year high would they the of time our in was year Minimal revenue XXXX to frame at year into guidance us for acquisition $X part So Immunetrics, provides earn-out of next targets Setting get of to end rate increase be time calendar and given the certainly contributed gives to the million an the revenue and contribution agreement million, [indiscernible] next to quarter. for that the would the by We as by be $X in achieved frame. And of $X next

being time, terms point certainly we're year. into market, So they going to contribution in cautious but next boost of significantly. forward, terms our in could outlook of their this At in contribute that they provide a

in overall that the based year, that I and with benefit yes, carrying into year a from to the [ the do momentum sort momentum a go in terms of the of us give within That us ] wanted any better make XX% range. that overall, the be market, was some Immunetrics for So contribution perspective tracking at give XX% seem we business to will guidance will upon uptick into gives next next we XX% us some the not to of performance year this -- likely year. with

FranÃ§ois Brisebois

and to Okay. and we're coming just going then and the revenues remind you the contracts it to Great. clarity remind end maybe the of And of on everyone why helps can that forward? renewals, how process us that was just that get harmonization what

Shawn O'Connor

so and accounts, date them within been and obviously, our pushing typically and frame. together of that that quarter one time impact the single the harmonization renewal year, those the our bring second have benefits those within clients an and around we a revenues. accumulated process cases an across clients them high had Predictor to saw process revenues seasonality, have a working from some licenses. multiple multiple platforms years or fourth in And activity No, Sure. an all over a the low multiple be those that that year differing platform perspective Monolix dates ADMET taking multiple focal would GastroPlus, had to entire with quarter that primary X consolidate was software impact first renewal larger licenses mutually Sure. last of products, our identify licenses and across of dates and third Mostly license our renewal from and which

dollar an look fourth evenly past lower year, you quarter. through over itself basis, dispersed on into first this that back then an quarter, As but absolute even more second resorted

our future And reach most renewals, And There'll more next that those we've of achieved time take seasonality disrupted so threshold events year's other number accounts. account that in the 'XX harmonize, across can where it in harmonization 'XX. place large still year. of be the the we in cycle be accounts that won't of through X of that may but

'XX new into pattern and will think I that we beyond. seasonality So ourselves in reset a hold

Operator

question with Our Matt Craig-Hallum. next is Hewitt from

Matthew Hewitt

then little a fiscal on some down bit up, just and we of step 'XX. bit of holidays a touched more here should a the are the in lower, cadence year remainder Or little revenues the for the services harmonization. anticipate back Should bouncing we of be How kind the thinking flattish the line guidance little maybe first and the your in Maybe be cadence? maybe up a about year? about bit a with with you of Maybe thinking whatnot. in but in how revenue QX should of

Shawn O'Connor

fair, Yes. Matt. that's I I mean, think

is quarter last by that. That's -- before a last dramatic always process historically harmonization and lower made more a year First was year. the quarter

and of lowest the fourth yes, the comparison first quarter third 'XX So be quarter. in in quarters, second, to revenues likely

seasonality Second, on I 'XX be 'XX. third, to level dollars should a blank a of and we're fourth comparable terms in year-over-year a relatively in in seasonality quarter absolute comparing mean, comparison basis,

we through percentage So little revenue a growth cadence as bit next more on basis, that consistent work be a our should way year.

on So and XX% of revenue is we focus software, that the flow.

And the and in activities. quarters summer staff the the in slow more delivery. is or and calling the but are interactive support. side, usually off, mostly On quarter, projects an project by projects, he season, of why fourth holiday [indiscernible] quarter, of the Time of time is staff which time client's on client last taking fourth context vacation and materials the of off, projects. -- both our That's but own the time the percentage not impacted holiday, if were has our slowest material the taking tendency some not service our is tremendously the fixed-price

the a There's Orlando. is There's that, a industry significant weeks in week take our quarter but on of first first another of the First conferences, in too. place. right place taking couple one season, quarter conference little it's a consulting holidays most is driven usually of the driven, ones piece now also by November. side slower That's is

a is obviously you being there. of bit then revenue service if it. That's pop terms typically quarter So a the was little more first Got and maybe looking fourth super-helpful. backlog, bit at And nice curve, there a bell-shaped lower. little in will,

there sounds -- effort rest from any break out was the just Some like that your sales backlog? that into way versus Is your to of of from contribution team. the a from solid and marketing was contribution Immunetrics Immunetrics

Shawn O'Connor

yes, of by broken PKPD aside. the QSP was, I disciplines terms of accounts PBPK. of a We've broken that with of and can projects. it and handful Immunetrics of handful that, Yes. and now out backlog this, unit a we're business say dealing the We've there now in Immunetrics out historically contributed, but

So while not contributor it's a there was significant bookings the record the I'd significant. most most in the addition, it's PK/PD say of in terms quarter on the side.

in of early early up certainly projects discipline quarter of 'XX. half go although in all back to it of in number first largest think records but in terms way early Very that good the beginning was there. here, that we are the teed quarter part, fiscal the didn't history, the I our

to largest that was the contributor business. PK/PD of So increase backlog the out

Matthew Hewitt

and in then Got then the back it. last I'll maybe And hop one, queue.

you introducing opportunities, as Immunetrics is been it and sounds very sales? it this customers. the positive But with offering? And kind a about installed both are cross-selling the actual relationships the reception. there's to having on some cross of like goes product of early like them your well ways. the Or building those full success both as It sounds Regarding base more

Shawn O'Connor

Yes. is Matt, space. activity say, the biggest within QSP the I'd

In therapeutic the now I models overlap visibility capabilities that the to say Immunetrics side, to customers and of and terms we providing areas, Immunetrics the theirs, platform that on are for And to other total into opportunities adding small our Immunetrics less that cetera. pharma don't are clients. products, pipeline sell client digit with names other of of comes of in et discipline those clients, have the base. the one In large us software terms of with that number direction, customers to -- a should many our

Immunetrics much not bringing big is to their into models a that's base base into direction models opportunities our benefit and sell the cross-selling biggest to through contributor. those is a installed client larger creating in contributor of So community. The that

Operator

next Larsen Our from with BTIG. question is David

David Larsen

Can you I think XX which new talk very GastroPlus? had good. about customers you like a looked little bit

highest X your quarter, year, think about actually X is think, in rates just on I fees And bit in maybe the of the I compares the good. the revenue also past upsells, maybe both renewal sequentially what and despite like drove new I which declined was a previous quarter, talk think that the and number Can it that? based upsells. looked to and the it customers little years of and accounts? large But XX for GastroPlus you then

Shawn O'Connor

XX-month It's product it's software Yes. -- a yes, quarters, day things of on revenue given not there, revenue sequential of One, quarter-to-quarter total Dave. a a revenues recognition -- it's or entirely for keep because couple taken from software revenue in a X. the mind -- for license upfront, that a

So quarter it what's really you're driving doesn't number. build fourth third in upon itself. with quarter, And the quarter from that renewals to population dealing that

a I us the third while contributed think left dollar process quarter, and the I so revenue and level there's in a quarter, higher -- little be that going to second, harmonization And in equivalent think absolute as fourth than there well. little fourth

the well renewal nonrenewals fourth as rate saw a you opportunities that the impacted couple However we in saw lost activity. of M&A that numbers quarter, were through

were acquisitions couple were the There And few of dollar so nonrenewals. could were it couple But quarter X brought they QSP the discontinued. for being There those biotech programs were relatively small have mix. contributed down of the amounts. used which fourth to and where a and nonrenewals CRO not a licenses, from that been

nonrenewals renewal fourth coming rates down. a had the contributed So few those in to we that quarter

events typical us. reinvigorate discussions come out and to could Those when those lead Our here, experience often ultimately the X to fully. themselves M&A companies sort back

if But and line. of reaction So it you the us organizations the are the once look we'll down road they that back the in now then some and settles. what's oftentimes, right together to down the will, now, come in can dust combined an at immediate renewed environment come not when our pipeline,

have numbers those nonrenewals higher. the impacts in So from few been fourth quarter could or

David Larsen

helpful. very That's

quarter, much Could impacted any the million, been If M&A how to of that? Just sort revenue $X.X sense the there -- it or in ballpark have guess you any is million? $X gas for had figure? of

Shawn O'Connor

know level I to that a get estimations into. want didn't that's of I sort of

geez, of of to look that that the was fee rates to back magnitude. you forward an said You could out, is there x, quarter our I and might some say, come would Y Impactful and playing revenue fourth in estimate 'XX go and us. to like probably it see and and we renewal back you come of could historical

David Larsen

price into to fiscal inflation? then be you terms related And And you color Okay. wage expect what would and prices cover a then own thoughts more able you of your year? would to do to helpful. Any order environment very that more increases, 'XX? -- sort in next fiscal Or it for in inflation is 'XX see Like there any were wage what to a scientists. of sort just any on heading be would in long of realize have tempered increase in to

Shawn O'Connor

Top first, no, No, of question. in good increases. line terms price

with with as in that in this is well the understandable have of increases it down to ]. increase, at in we were hey, in environment more accepting higher it that well I during environment. return those we not continuing didn't that client-facing functionality very in as back them of, to point, organization to industry than to team robust made with as -- our come together think put a terms to with fiscal 'XX delivery capabilities our or down the They're of increases And compensation starting our stated negotiation the partnership here, year we've of or fund was As past questions we we speaks and that organization [ our very before, its come the in quality back out certainly terms yielded an of growth we clients. R&D for least price and been and increased inflation aggressive specific had community market macroeconomic scientific pushback, but

price in versus doubled it typically been was the was increase yield much our in as So past. quite as 'XX. That 'XX has

in has down side, this settling offers expense the of down. of compensation there's cost job in settled clients there. we other on present though been an that side, market. As a the the of pretty and is is the that our Inflation little terms biggest And contributes are constrained. Still still hopping out budget turn to the marketplace bit 'XX, in which a to somewhat difference environment field scientists different inflated out the there

go back 'XX momentum 'XX into that forward increases as and expectations goes anticipated in certainly price our away and so between And somewhere in terms year. return of next we 'XX

contribution in go in more not the So the of from in price 'XX past. significant we but increase expect 'XX. price level into of yield as Still terms than good a increase, 'XX, to

stagnant said I've while expense there this the environment, but side, merit it's from has of kind prior. not the settled nothing in down. increase compared salary year to takes year-to-year, And the naturally a some community place story, that it's On compensation is

Operator

with David from is question Windley next Jefferies. Our

David Windley

a because couple biosimulation Just of differential opportunities the restack IRA restacking change or and the that potential that of help or for wondering that I might the incentives on changing molecule. quick and to I'm priorities to of presents kind large pipeline opportunity an think pipeline incentives ones, small and in if from Shawn, picture, bigger priorities that of our reevaluating

Shawn O'Connor

of sort of The work world second the the and both on large or on sort our actually of most molecule and was in in modeling in of of of small sides biologics side terms participates historically. applications modeling simulation development molecule line

programs activity in frankly, increased. molecules And so volume biologics, just it's as has rapidly, programs, and a the investments smaller that large is of quite growing quite base of

I as So going demands year, so. we continue of meet And technology the disproportionate scientific forward. we forward capability our into providing I supports on a growth see and that to and to doing side the the contributor and think as move biologics are

David Windley

at was I've your Got of think it. about, present talked remarks company And Toxicology. market Society And IND you your parts a PBPK of I I example it then prepared seen client that the in at stage. know or

that nonhuman So if that primates assessment has role that a for that the get try stage, to opportunities safety supply And if to I business molecule get in chain? know for your access in in play percolated particularly biotechs, wondering and to around simulation the to difficulties stage. have to bottleneck to you earlier I'm large

Shawn O'Connor

a and for reduced be are and looking ability our in and size in species terms turn human. perhaps population into where provide weakens an of [indiscernible] issue impact the situations is certainly that within of animal predict around GastroPlus preset terms studies it to models tremendous Yes, terms ability in populations example, to of the capability, a smaller

communications So and opportunity. that's clients yes, with terms it's something of having certainly a in positive pipeline our no, impact

Operator

no At Shawn further hand this to for closing any would the to back time I O'Connor floor are Mr. like over there questions. comments.

Shawn O'Connor

feel year. is very guess, for part, thanks, On Well, attention. I optimistic, the cautiously everyone, your our Good buzzword.

look enter year of to and for forward well past we some performed XXXX Thanks next care. As forward with momentum this into to this and continued great your a We team soon. on again look past attention. year out coming year. that talking very good board their Take to contributions you

Operator

today's concludes conference. This

Thank at your your you disconnect for time. may You participation. lines this

Simulations Plus (SLP) 25 Oct 232023 Q4 Earnings call transcript