Simulations Plus (SLP) Q3 2026 earnings summary

Executive summary

• Q3 FY26 revenue rose 7% year-over-year to $21.9M, driven by a 20% increase in services revenue, while software revenue was flat.

• Gross margin improved to 69% from 64% in the prior year quarter, reflecting lower software amortization and operational efficiencies.

• Net income was $3.6M for the quarter, reversing a net loss of $67.3M in Q3 FY25, with diluted EPS of $0.18 and adjusted diluted EPS of $0.30.

• A definitive merger agreement was signed to be acquired by Altaris for $18.50 per share in cash, with closing expected in Q4 2026.

• Trailing twelve months (TTM) revenue was $82.1M, a 2% increase year-over-year, with TTM adjusted diluted EPS at $0.88.

Financial highlights

• Q3 FY26 adjusted EBITDA margin was 36%, with adjusted EBITDA of $7.9M; nine-month adjusted EBITDA was $20.2M (31% of revenue).

• Q3 FY26 gross margin was 69%, up from 64% in Q3 FY25; gross profit for the quarter was $15.1M.

• YTD FY26 revenue grew 5% to $64.6M, with net income of $8.8M and adjusted EBITDA of $20.2M.

• Cash and short-term investments totaled $50.0M as of May 31, 2026.

• R&D expense increased 180% in Q3 and 89% for nine months, reflecting investment in cloud and AI-enabled platforms.

Outlook and guidance

• Fiscal 2026 guidance projects total revenue of $79M–$82M, 0%–4% growth, software revenue mix of 57%–62%, adjusted EBITDA margin of 26%–30%, and adjusted diluted EPS of $0.75–$0.85.

• Management expects sufficient liquidity for the next 12 months, with $35.3M in cash and $14.7M in short-term investments as of May 31, 2026.

• Pending merger restricts certain capital allocation activities until closing.

• Continued investment in R&D and cloud/AI capabilities is planned.

• Management remains focused on execution and client delivery during the transition to new ownership.