Q1 2024 Simulations Plus Inc Earnings Call
Greetings and welcome to the Simulation Class First Quarter Fiscal 2024 Financial Results Conference.
Greetings and welcome to the.
Plus first quarter fiscal 'twenty 'twenty four financial result conference call.
At this time all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation.
If anyone's fire.
During the conference. Please press star one on your telephone.
As a reminder, this France is being recorded.
It is now my pleasure to introduce the marathon solid financial files. Thank you Ms. Gonzales you may begin.
I'll come to the simulations plus first quarter fiscal 'twenty 'twenty four financial results conference call.
Welcome to the Simulation Plus First Quarter 2024 Financial Resource Conference.
With me today are Todd O'Connor, Chief Executive Officer, and Will Frederick, Chief Financial Officer and Chief Operating Officer of Immunization Plus.
With me today are Scott.
Chief Executive Officer, and wealth, Frederick Chief Financial Officer, and Chief operating Officer accumulation.
Please know that we updated our quarterly earning presentation, which will serve as a supplement to today's remarks. You can access the presentation on our website. At www dot simulations dash dot com.
Please note that we updated in our quarterly earnings presentation, which will serve as a supplement to today's prepared remarks.
You can access the presentation on our Investor Relations website.
W. W.
Dash plus dot com.
After we will open the call for questions as a reminder, the information that may include statements that are involved in terms of words, like, believe, exact, and refer to our best assessment as a call. There can be no insurance that will actually take place. So our actual future results could differ significantly from these.
After management's commentary.
Call for questions as a reminder.
Hey man.
Unlucky pet and garden.
Whereas my beliefs.
And then before.
I had two of our best estimates.
There can be no assurances that these will actually take place.
So our future results could differ significantly from these statements.
Further information on the company's risk factors is contained in the company's quarterly and annual reports, and in files with the Securities and Exchange Commission. With that said, I'll turn the call over to Sean O'Connor.
Further information on the company's risk factors is contained in the company's quarterly and annual.
And filed with Securities and exchange.
With that I'll turn the call over to Shawn O'connor Shawn.
Speaker Change: Thank you tomorrow. Good afternoon, everyone. And thank you for joining our 1st quarter fiscal 2024 conference.
Thank you Tamara.
Good afternoon, everyone and thank you for joining our first quarter fiscal 2024 conference call.
Speaker Change: The results of the first quarter of fiscal 2024 are laid out in the Census Bureau.
Our results for the first quarter of fiscal 2024. It played out as anticipated we delivered solid revenue growth of 21% and diluted earnings per share in line with our guidance for the full year.
Speaker Change: We delivered all the revenue growth of 21% and diluted earnings per share of 10% and 10% in line with our guidance for the full year.
Speaker Change: Our team performed very well in what is still a softer environment for our biotech and pharmaceutical clients. A few notes on the back.
Our team performed very well in what is still a softer environment for biotech and pharmaceutical clients.
A few notes on the background behind our results.
Speaker Change: As our clients closed out their fiscal years, we saw the usual send before you lose in the 2023 act.
As our clients closed out their fiscal years, we saw the usual 10 before you lose in 2023 activity.
Speaker Change: A rush to use allocated budget before the year end. Even though the spend fell short of the previous year end size, we were encouraged that it was greater than what we saw last year.
They use allocated budget before the year end.
Even though the center all sorts of the previous year and we were encouraged that it was greater than what we saw last year.
Speaker Change: We also gained insight into our client's budget for fiscal 1-1-1-4. Some have more aggressive budgets, while others have more cautious, as the industry's portfolio of drugs that are going off patent lose on their price, causing them to be more conservative on spending.
We also gained insight into our clients' budgets for fiscal 2024.
<unk> had more aggressive budget, while others have more cautious as the industry's portfolio right, they're going off patent looms on their horizon, causing them to be more conservative on spending.
Speaker Change: Funding for Biotech continues to show signs of life, but again, it was still low funding levels two to three years ago.
Funding for biotech continued to show signs of life, but again, we're still well below the funding levels with two to three years ago.
Speaker Change: Importantly, our leadership in AI, and particularly analytics, continue to accelerate the discovery effort and improve clinical outcomes for our clients.
Importantly, our leadership in AI and predictive analytics continues to accelerate every effort to improve clinical outcomes for our clients.
Speaker Change: For context, we have been utilizing AI techniques and approaches in our solutions since our beginnings. As AI technologies have evolved, we have enhanced our AI solutions and experienced the benefits that can be harnessed with better data access, algorithm training, and predictive accuracy.
For context, we have been utilizing AI techniques and approaches in our solutions since our beginning.
As AI technologies have evolved we have enhanced our AI solutions and experienced the benefits that can be harnessed with better data access algorithm training and predictive accuracy.
Speaker Change: Our tenure in serving the drug development industry has provided significant access to private and public data necessary to protect and refine predictive algorithms. Our partnerships and collaborations with industry leaders and regulatory agencies is unmatched and provides us with ongoing means to continue this in the future.
Our tenure in serving the drug development industry has provided significant access to private and public data necessary to perfect and refined predictive algorithm.
Partnerships and collaborations with industry leaders and regulatory agencies is unmet and provides us with ongoing means continuous piece here.
Speaker Change: Moving to our software development performance, software revenues increased by 25% over the quarter, reflecting a good renewal activity in converting an active and strong IT pipeline.
Moving to our software segments performance.
Our revenues increased 25% for the quarter, reflecting good renewal activity and converting in actives and strong pipeline.
Speaker Change: Our physiologically-based pharmacokinetics, or PBPK business unit, had a strong quarter. Revenue increased 27% over the quarter, reflecting things from the fiscal fourth quarter 2023, and an diminishing impact from small biotech-acclimated rules that previously weighed on results. GAS requests was referenced in the 21 peer-reviewed journal articles, and the PBPK business unit added technical assessment.
Our physiologically based pharmacokinetics or P. B P. J business unit had a strong quarter revenues increased 27% for the quarter, reflecting some spillover from the fiscal fourth quarter 2023, and a diminishing impact from small biotech client renewals.
Previously weighed on results gas.
Castro plus was referenced in 'twenty, one peer reviewed journal articles and the P. P. P K business unit that's.
New customers. The team also booked nine commercial client that's up.
Speaker Change: In our clinical pharmacology and pharmacometrics, or CPPB business unit, revenues decline.
And our clinical pharmacology, and pharmacokinetics or C. P. P business unit revenues declined 1%.
Speaker Change: Biotech turned silly citizens in CPPB, where we lost 8 customers, whose total revenue was only $120,000. In total, CPPB added 90 new customers and had had 10 customer upsells in the quarter, with one renewal shifted to the second fiscal quarter.
<unk> churn still existent C. P P, where we lost eight customers, whose total revenue was only $820000.
In total C. P. P added eight new customers and had 10 customer upsells in the quarter with one renewal shifted to the second fiscal quarter.
Speaker Change: There were two non-renewals, one from a small biotech, and one renewal was delayed. Renewal later in calendar year 2024.
I Kinda informatics business unit saw revenues increased 3% in the first quarter. There were two non renewals one from a small town.
And one renewal was delayed.
Renewal later in calendar 2024.
Speaker Change: The team booked five NFLs during the quarter and added two new customers.
But by themselves during the quarter and added two new customers.
Speaker Change: In our quantitative system pharmacology, revenue increased 219%, reflecting a new license to an existing customer for the QSP on a modeling platform.
And our quantitative systems pharmacology or <unk> business unit revenues increased 219%, reflecting a new license to an existing customer for the U S T oncology modeling platform.
Speaker Change: No new customers were added during the order, and the team booked one up.
No new customers were added during the quarter and the team booked one.
Speaker Change: We were pleased with the court's resolve to give him a large per license dollar amount and smaller client volumes associated with the decision. The court of the outcome can be launched.
We were pleased with this quarter's result, but given the large per license dollar amount and smaller client volume associated with this business quarterly outcomes can be lumpy.
Speaker Change: Looking at our services segment, revenues reduced 17% during the first quarter.
Looking at our services segment revenues grew 17% during the first quarter.
Speaker Change: Services and add agatism starters of the fiscal year as a momentum out of the fiscal 1, 1, 1, 3, 3, and 4. Overall, services onward top, e-ness in the usual project flow due to the another claim related delay that ended and added the project alert.
Services had a good start to the fiscal year as the momentum out of fiscal 'twenty 'twenty free continues.
Overall services.
The unusual and projects slow due to data and other client related delays that impacted project deliveries.
Speaker Change: Services revenues in our CPP business unit were up 12% in the first quarter. A good amount of CPP completed 67 projects in the quarter and continued its momentum from the end of the fourth quarter with excellent location.
Services revenues in our C. P. P business unit, we're at 12% in the first quarter a good outcome C.
C. P. P completed 67 projects in the quarter and continued its momentum from the end of the fourth quarter with excellent bookings.
Speaker Change: In our USP business unit, services revenue grew 100% after the first quarter, including the benefit from the in-and-out acquisition.
And our <unk> business unit services revenue grew 100% for the first quarter, including the benefit from the annual metrics acquisition.
Speaker Change: The team completed 27 projects during the quarter, with one cancellation from a large plant that negatively impacted its overall backlog.
The team completed 27 projects during the quarter with one cancellation from a large client that negatively impacted overall backlog.
Speaker Change: Services revenue in our EPPDA has been in a decline of 12% in the report, as revenues were negatively impacted by client-related aid delays and affected the project deliveries in miles.
Services revenue in our P. B PK business unit declined 12% in the quarter.
As revenues were negatively impact impacted by client related data delays and affected project deliveries and milestones.
Speaker Change: During the quarter, the team completed 63 projects, given the pipeline and outlook for PVDK was solid for the year.
During the quarter the team completed 63 projects given the pipeline and the outlook for P. D PK looks solid for the year.
Speaker Change: The Immunetrics Registration continues to go well, Immunetrics has an active pipeline, reflecting an inherited lead and a new lead source in the SLV client base post-acquisition.
Do you mean metrics integration continues to go well give me metrics has an active pipeline, reflecting inherited leads and new lead source in the U S. L. P client base.
Post acquisition.
Speaker Change: Overall, the QSED team has executed very well in collaborating on projects.
Overall, the U S. B team is executing very well and is collaborating on projects.
Speaker Change: Before turning you all over to Will, I'd like to call your attention to a separate release of the issues simultaneously today, announcing four leadership appointments each effective today.
Before turning the call over to will I'd like to call your attention to a separate release.
Issued simultaneously today announcing four key leadership appointments each effective today.
Speaker Change: First, will Frederick is assuming the additional role of Chief Operating Officer.
First.
Fredrik is assuming the additional role of Chief operating officer.
Speaker Change: Will it with simulations in 2020 and it has demonstrated excellent operational leadership over the time. And in a new role will now receive operations for all of our.
Well, it's been with simulations plus since 2020 and has demonstrated excellent operational leadership over this time.
In his new role will now overseas operations for all of our business units.
Speaker Change: Second, we're pleased to welcome Ian Dodd to the Simulation Plus team in the new role of Chief Revenue Officer.
Second we're pleased to welcome Dan thought through the simulations plus being in the new role as Chief revenue Officer.
Speaker Change: And so there were 20 years of enterprise sales experience across all phases of drug or development in large or within the nation. And that if you roll, Dan and those really fail more to the teams, again, and like collaborative, product selling opportunities in an enhanced drug or productivity.
Dan has over 20 years of enterprise sales experience across all phases of drug development large organization and.
This key role Dan oversees the sales and marketing teams identify collaborative cross selling opportunities and enhanced productivity.
Speaker Change: Third, Josh Bode is transitioning to Senior Vice President of Operations and will leverage his customer insights to provide client-focused leadership across all businesses.
Third Josh Foley is transitioning to senior Vice president of operations leveraging customer insights to provide claims focused leadership across all business units.
Speaker Change: And finally, Dr. Candace Flores-Sharp has been promoted as the President's Regulatory Strategy.
And finally, Dr. Sandra Suarez sharp has been promoted to president regulatory strategy.
Speaker Change: SAMHSA is responsible for expanding our regulatory strategies as a unit, a critical bathroom component of our overall services offer.
Sandra is responsible for expanding our regulatory strategies business unit, a critical fast growing component of our overall services offering.
Speaker Change: These are the points right now, the experience proof is not used in the TV TV lately. Importantly shared on omitted in and always putting a plan first. If that happens, I'll tell the way that you're longer. It's a game that will grow.
These appointments recognize the experienced and proven contributions of each of these leaders importantly, we share a common vision of always putting our clients first is the best possible way to ensure long term sustainable growth.
Speaker Change: I'd also like to take a minute to thank those of you who attended our first Investor's Day in November . We had a great turnout, and the feedback has been positive. In addition to a deep dive into our business, we also outlined our new organizational structure.
I'd also like to take a minute to thank those of you who attended our first Investor day in November we.
We had a great turnout and the feedback has been positive.
In addition to a deep dive into our business. We also outlined our new organizational structure.
Speaker Change: With this new structure, we reorganize the companies we've acquired over the years into five business units that correspond to the scientific domains in the drug development process in which we have expertise.
With this new structure, we reorganize the companies we acquired over the years into five business units that correspond to the scientific domains in the drug development process in which we have expertise.
Speaker Change: This is our director of land with how our plan to do business with us and encourages fraudulent and collaboration.
This structure aligns with how our clients do business with us and encourages cross selling and collaboration.
Speaker Change: Our team continues to deliver tremendous value to our clients, providing customized services and easy-to-use software offerings, each of which is at the core of our business model. And with that, I'll turn the call over to you.
Our team continues to deliver tremendous value to our clients, providing customized services and easy to use software offerings each of which is at the core of our business model.
And with that I'll turn the call over to will.
Thank you Sean.
Speaker Change: Yet another strong order, with total revenue increasing 21% to $14.5 million, with software revenue of about 25% and services revenue of about 17%.
You had another strong quarter with.
Total revenue, increasing 21% to $14 $5 million with software revenue up 25% and services revenue up 17%.
Speaker Change: Software revenue represents 52% of total revenue for the quarter.
Software revenue represented 52% of total revenue for the quarter.
Speaker Change: On a trailing 12-month basis, software revenue increased 21% and service revenue increased 9%.
On a trailing 12 month basis software revenue increased 21% and services revenue increased 9%.
Speaker Change: As we mentioned in the past, our first quarter tends to be our lowest revenue quarter due to seasonality, and this year is no different. We are anticipating that we will see seasonally higher revenues in the remaining quarters of fiscal 2024, as we have had in the past, resulting in higher profitability in the remaining quarters of our fiscal year.
Yeah.
As we've mentioned in the past our first quarter tends to be our lowest revenue quarter due to seasonality and this year is no different.
We are anticipating that we will see seasonally higher revenues in the remaining quarters of fiscal 2024, as we have had in the past, resulting in higher profitability in the remaining quarters of our fiscal year.
Total gross margin for the quarter was 68%, reflecting higher cost of revenues in the services segment as a result of updated reporting changes.
Speaker Change: Total gross margin for the quarter was 68%, reflecting higher costs and revenues in the service segment as a result of updated reporting changes.
Speaker Change: Software gross margin increased 87% from 85% last year, while service margin decreased 47% from 70% last year, primarily due to a shift from immediately reporting multiple cost items in SG&A's finance before the reorganization, and now separately reflecting that in cost revenues for service.
Software gross margin increased to 87% from 85% last year, while services margin decreased to 47% from 70% last year, primarily due to a shift from previously reporting multiple cost items in SG&A expense before the reorganizations and now separately.
Cost of revenues for services.
Speaker Change: Gross margin for the trailing 12-month business quarter, where we're approximately in line with trailing 12-month and the first quarter of fiscal 2022.
Gross margin for the trailing 12 months through this quarter were approximately in line with the trailing 12 months ending first quarter of fiscal 2022.
Speaker Change: I'll go into more detail on how our reorganization impacts our expense reporting in just a few minutes.
I'll go into more detail on how our reorganization impacts our expense reporting in just a few minutes.
Speaker Change: Turning to software revenue by finishing for the quarter, PVPK represented 52% of software revenue, CPP was 20%, Chem and Pharma was 15%, and QSP was 13%.
Turning to software revenue by business unit for the quarter P. B Teekay represented 52% of software revenue C. P. P was 20%.
Informatics was 15% in Q S. P was 13%.
Speaker Change: For the trailing 12 months, PPBK represented 57% of software revenue, CPP was 18%, Cheminformatics was 18%, and QSP was 7%.
For the trailing 12 months P. B P. K represented 57% of software revenue C. P. P was 18% Kim Informatics was 18% in Q S. P was 7%.
Speaker Change: For the quarter, our customer renewal rate increased to 100% based on fees and increased to 884% based on accounts.
For the quarter, our customer renewal rate increased to 100% based on fees and increased to 84% based on accounts.
Speaker Change: For the quarter, average revenue per customer increased to $79,000 from $68,000.
For the quarter average revenue per customer increased to $79000 from $68000.
Speaker Change: For the trailing 12 months, our customer renewal rate remained at 83% based on fees and decreased to 83% based on accounts.
For the trailing 12 months, our customer renewal rate remained at 93% based on fees and decreased to 83% based on accounts.
Speaker Change: For the trailing 12 months, average revenue per customer is increased to $93,000.
For the trailing 12 months average revenue per customer increased to $93000.
Speaker Change: The lower capital renewal rate is still primarily driven by non-individuals or smaller biotech customers, but we've been able to maintain our fee renewal rate consistently above 90%, even with the headwind.
The lower account renewal rates are still primarily driven by non renewals from smaller biotech customers, but we've been able to maintain our fee renewal rate consistently above 90% even with this headwind.
Speaker Change: Shifting to our service revenue by business unit for the quarter, CPP leveraged up to 46% of our service revenue, QAOFP with 30%, PPBPA with 19%, and REG with 5%.
Shifting to our services revenue by business unit for the quarter C. P. P represented 46% of services revenue Q S. P was 30% P.
P. B PK was 19% and rig was 5%.
Speaker Change: For the trailing 12 months, PPP represented 45% of service revenue, QSP was 28%, PVPK was 22%, and REG was 5%.
For the trailing 12 months C. P. P represented 45% of services revenue.
T was 28% P V PK was 22% and rig was 5%.
Total services projects worked on during the quarter was 179 same as last year and quarter end backlog increased to $18 $9 million compared to $15 $8 million at the end of the first quarter last year.
Speaker Change: Total service project worked on during the quarter was 179, same as last year, and then quarter end backlog increased to $18.9 million, compared to $15.8 million at the end of the first quarter last year.
Speaker Change: Anticipated revenue backlog within 12 months increased to slightly over 80%.
Anticipated revenue from backlog within 12 months increased to slightly over 80%.
Speaker Change: As was previously discussed, the addition of new metrics has led to a healthy pipeline of activity, including new accounts sourced from our client base, helping to increase our overall services backlog.
As we previously discussed. The addition of immune metrics has led to a healthy pipeline of activity, including new accounts sourced from our client base, helping to increase our overall services backlog.
Speaker Change: Turning to our consolidated income statement of the quarter, total R&D costs remain relatively inconsistent at $2.1 million, with R&D expenses last at $1.2 million, and capitalized R&D at $0.9 million.
Turning to our consolidated income statement for the quarter.
Total R&D costs remained relatively consistent at $2 $1 million with R&D expenses flat with $1 $2 million in capitalized R&D at $29 million.
Speaker Change: With our recently announced Transition Business Unit to improve our focus on customers, we also took the opportunity to evaluate our departmental structure with a focus on continuing to improve operational performance and profitability while providing our investors improved visibility for progress.
With our recently announced transition to business units to improve our focus on customers. We also took the opportunity to evaluate our departmental structure with a focus on continuing to improve operational performance and profitability, while providing our investors improved visibility to our progress.
Speaker Change: In performing this process, we looked at personnel in the following departments.
In performing this process, we looked at personnel in the following departments.
Speaker Change: Services, R&D, sales and marketing, and G&A.
Services, R&D sales and marketing and G&A.
Speaker Change: This was done during Q1 to support the recently announced leadership changes and consolidation of company-wide operations.
This was done during Q1 to support the recently announced leadership changes and consolidation of company wide operations.
Speaker Change: To better measure and report our operational performance may be following the changes. We moved all services personnel into the cost and revenues department. We moved all R&D personnel into research and development and expense departments. We moved all sales marketing personnel into selling and marketing and expense departments. And we moved all G&A personnel and all company-wide overhead and administrative costs into general and administrative expense departments.
It's a better measure and report our operational performance who made the following changes.
We moved all services personnel in pass through revenues Department.
He moved all R&D personnel into research and development expense Department.
We moved all sales and marketing personnel into selling and marketing expenses departments.
And we moved all G&A personnel in all company wide overhead and administrative cost.
Into general and administrative expenses Department.
Speaker Change: This still allows us to leverage the broad skillset of our employees to perform activities in other departments and accordingly move their expense to those departments. For example, a service employee who spends time working on sales marketing activities would have their expense related to this activity reflected in the marketing expense on our financial statement.
This still allows us to leverage the broad skill sets of our employees for am activities in other departments.
And accordingly moved their expense to those departments.
For example.
The services employee who spends time working on sales and marketing activities would have their expense related to this activity reflected in selling and marketing expense in our financial statements.
Speaker Change: If the same person also spends time working on R&D activities, their expenses related to this may be reflected in a research and development expense in an R&D interest statement.
It's the same person also spent some time working on R&D activities. They are expense related to this would be reflected in research and development expense in our financial statements.
Speaker Change: These movements lead to the final step for standardizing and reporting for the various acquired companies, including Internex last quarter, to a company-wide business unit structure reporting.
These movements completed the final step towards standardizing reporting for the various fires piece, including any metrics last quarter to a company wide business unit structure reporting.
Speaker Change: We believe investors will now have greater insight to our cost structure and compare future performance trends when they review our financial statements.
We believe investors will now have even greater insight to our cost structure and to compare future performance trends when they review our financial statements.
Speaker Change: We will continue our objective to reduce G&A expense as a percentage of revenue over time while maintaining our investment in R&D and sales marketing.
We will continue our objective to reduce G&A expense as a percentage of revenue over time, while maintaining our investments in R&D and sales and marketing.
Speaker Change: And as we've always done, we plan to continue driving increases in both our software and services over a large span of time.
And as we've always said we plan to continue driving increases in both our software and services gross margins.
Speaker Change: Selling and marketing expenses for the quarter was $2 million, up from $1.5 million last year. GMA expenses for the quarter decreased from $5.7 million to $5.8 million last year.
Selling and marketing expense for the quarter was $2 million up from $1 $5 million last year.
G&A expense for the quarter decreased to $5 $7 million from $5 $8 million last year.
Speaker Change: Combined, selling the marketing and G&A expenses accounted for 53% of total revenue compared to 60% of total revenue last year.
Combined selling and marketing and G&A expenses accounted for 53% of total revenue compared to 60% of total revenue last year.
Speaker Change: This comparison reflects the shift as a corridor for examiners that were previously bundled together in FCNA and are now effectively reflecting the cost of revenue to service personnel.
This comparison reflects the shift this quarter for expenses that were previously bundled together in SG&A and are now separately reflected in cost of revenues for services personnel.
Speaker Change: Expenses generally grow each quarter with additional headcount added throughout the fiscal year.
Expenses generally grow each quarter with additional head count added throughout the fiscal year.
Speaker Change: Income from operations may increase at 7% revenue, and income from tax increases at 17% revenue.
Income from operations remained consistent at 7% of revenue and income before income taxes increased to 17% of revenue.
Speaker Change: Other income was $1.4 million a quarter versus $0.7 million last year, primarily due to increased interest income of $0.5 million driven by rising interest rates.
Other income was $1 $4 million this quarter versus point $7 million last year, primarily due to increased interest income of $5 million driven by rising interest rates.
Speaker Change: Net income per quarter was $1.9 million, or 13% of revenue, up from $1.2 million, or 10% of revenue.
Net income for the quarter was $1 $9 million or 13% of revenue.
Up from $1 $2 million or 10% of revenue.
Speaker Change: Deliver earnings to share increases 10 cents for Pacifica's last year.
Diluted earnings per share increased 10 cents from six cents last year.
Speaker Change: Adjusted EBITDA, an increase of $3.4 million, or 23% of revenue, compared to $3 million, or 25% of adjusted EBITDA margin last year.
Adjusted EBITA increased to $3 $4 million or 23% of revenue compared to $3 million or 25% adjusted EBITDA margin last year.
Speaker Change: We calculated just-even data by adding back interest taxes, depreciation, amortization, stock-based compensation, gain or loss on currency exchange, any acquisition or financial transactions related to expenses, any asset impairment charges, and any tax positions or benefits related to size. We provided a reconciliation of the non-GAAP metric and its income, the relevant GAAP metric, in our earnings release and on our website.
We calculate adjusted EBITDA by adding back interest taxes, depreciation and amortization.
Stock based compensation gain or loss on currency exchange any acquisition or financial transaction related expenses any asset impairment charges and any tax provisions or benefits related to these items.
We provide a reconciliation of this non-GAAP metric to net income the relevant GAAP metrics in our earnings release and on our website.
Speaker Change: Income tax spent over the quarter was $25.5 million, slightly compared to last year, and our effective tax rate decreased 19% from 23% last year.
Income tax expense for the quarter was <unk> $5 million up slightly compared to last year and our effective tax rate decreased to 19% from 23% last year.
Now turning to our balance sheet.
Speaker Change: We ended the quarter with $113.9 million in cash-in-toward-turn investments and we continue to be well-capitalized, have strong free cash flow, and seek opportunities for strategic acquisitions, investments, and partnerships. I'll now turn the call.
We ended the quarter with $113 $9 million in cash and short term investments and we continue to be well capitalized have strong free cash flow and seek opportunities for strategic acquisitions investments and partnerships.
I'll now turn the call back to Sean.
Speaker Change: Thank you. Our first quarter results provided a successful start to the year. We saw good performance from both the software and services segments. That said, the underlying condominium regarding our outlook remained the same, as client funding and budget cycles remained opposite and storeable.
Thank you will.
Our first quarter results provided a successful start to the year we.
We saw good performance from both our software and services segments that said the underlying assumptions regarding our outlook remain the same as client funding and budget cycles remains softer than historical levels.
Speaker Change: Following our fiscal 2023 revenue growth of 11%, we set out the fiscal 2024 revenue guidance with a range of 10-15%.
[noise] following our fiscal 2023 revenue growth of 11%, we set fiscal 2020 for revenue guidance with the range of 10% to 15%.
Speaker Change: Given our first quarter results, we're cautiously optimistic that the market for model-informed drug development could improve and, in return, we're netting in growth, but it's too early to change our outlook. With that in mind, we are well-positioned to meet our stated fiscal 2020-2024 guidance targets, which include
Given our first quarter results were cautiously optimistic that the market for modeling model informed drug development could improve and returned towards mid teens growth.
But it's too early to change our outlook.
With that context, we are well positioned to meet our stated fiscal 2024 guidance targets, which include.
Speaker Change: Total revenue between $66 million and $69 million. Year-over-year revenue rose in the range of 10% to 15%.
Total revenue between 66 and $69 million.
Year over year revenue growth in the range of 10% to 15%.
Speaker Change: software mix between 55 and 62%.
Software mix between 55 and 60%.
Speaker Change: serve as the next 40 to 45 percent, and deliver learning for share of 666-MM to 666-AAB.
Services mix, 40% to 45%.
And diluted earnings per share of <unk> 66 to 68.
Speaker Change: The atmosphere of collaboration is strong here at Simulation Clouds, as it is a drive to innovate and serve our client to help develop safer and more effective solutions.
The atmosphere of collaboration is strong here at simulations plus as is the drive to innovate and serve our clients to help develop safer and more effective drug solution.
Speaker Change: We have a long history of innovation in biosimulation and transforming drug development and R&D, and a rich future for drug adoption.
Long history of innovation and Biosimilar <unk> that is transforming drug development and R&D.
And a rich future for growth opportunities.
Speaker Change: to continue to grow revenues, deliver profitable growth, and generate cash.
We continue to grow revenues and deliver profitable growth and generate cash.
Speaker Change: Thank you for your time today. And with that, I'll now turn the call over to the operator for your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question.
Thank you for your time today and with that I'll now turn the call over to the operator for your questions.
Thank you.
We'll now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad E.
A confirmation tone will indicate your line is in the question.
You May press star two if he would like to remove your question from me.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Thank you. Our first question comes from the line of Matt Hewitt with Craig Hallum Capital Group.
Speaker Change: My question comes from the line of Matt Hewitt with Craig Powell of Caltech.
Please proceed with your question.
Speaker Change: Good afternoon and congratulations on a good start to the year. Maybe first I'm hoping we can get a little bit more color on what you're hearing from client customers. It sounds like the very small end of the spectrum continues to have some budgetary or balance sheet issues, but what are you hearing from the larger customers? Are they starting to feel a little bit more comfortable with the environment and maybe they're coming in and you know.
Good afternoon, and congratulations on the good start to the year, maybe first one I'm, hoping we could get a little bit more color on what you're hearing from clients and customers are it sounds like the the very small end of the spectrum continues to have some maybe budgetary or balance sheet issues, but.
What are you hearing from the larger customers are they starting to feel a little bit more comfortable with the environment and maybe they're coming in and.
Speaker Change: Buying more and setting up more services.
Buying more and it's setting up more services.
Speaker Change: Matt, I want to be more positive than I can be. We've seen some good discussions in terms of some of our larger clients. Very good roll rate this quarter. Very good update in terms of this year's pricing increase. Very positive signs in terms of some of those accounts and their budgets for 2024 calendar year.
Yes, Matt.
I wanted to be more positive than I can be.
We've seen some.
Good discussions in terms of some of our larger clients.
Engage very good burn oil rates this quarter.
Good uptake in terms of.
This year's price increase.
Very positive signs in terms of some of those accounts and their budget setting for 'twenty 'twenty four calendar year.
Speaker Change: At the same time, you've got the price of the world bouncing in a 2024 tax environment in terms of...
At the same time, you've got a.
The sizes of the world announcing our 2024 setbacks.
The environment in terms of.
Speaker Change: haven't fallen off in terms of some of their revenue producers. There are a good segment of those in large pharma that are being relatively cost-sustaining through their 2021-2024 fiscal year. So a little bit of a big impact, Matt. We've been seeing some very positive signs, but like I say, compared to a year ago today,
Patton.
Falloff in terms of some of their revenue producers. There are a good segment of those large pharma that are being.
Relatively cautious as they enter their 2024.
Fiscal year, so a little bit of a mixed bag of math.
We see some very positive signs.
But oh, I'd say compared to a year ago today.
Speaker Change: better and their years have not quite there yet.
Sure.
Compared to years past I'm not quite there yet.
Speaker Change: We're on the right path, at least. Maybe another question regarding the services gross margin and some of the reporting changes that have occurred. So, if I'm hearing you correctly, the services gross margins will stay kind of in the upper 40s. They're not going to bounce back into the 60s here in Q2, is that correct?
Well, we're on the right path at least.
Maybe another question regarding the services gross margin and some of the reporting changes that have occurred. So if I'm hearing you correctly that the services gross margins will stay kind of in the upper Forty's you, they're not going to bounce back into the sixties here in Q2 is that correct.
Speaker Change: Yeah, the reorganization and the rebuilding, accounting, re-classification of the...
Yeah.
Reorganization and the resulting accounting reclassification.
Speaker Change: and serve their people, and that will carry forward as we proceed into the next year. Our margins are good in software business.
There are certain people and expenses that will carry forward as we proceed into the next year our margins are good and the software business.
Speaker Change: We sort of rebacked that amendment with this re-classification of the expenses. Not going to go back to where it was before, but it's good to maintain and evolve where it's at. And we've changed as a reorganization.
Sort of reset them with this reclassification of expenses.
Not going to go back to where it was before.
But it should maintain a in the ballpark of where it's at and with these changes the reorganizations.
Speaker Change: I anticipate a seeming suspension of these to come as a result of that moving forward in the future. You know, our probabilities are all unchanged in terms of the model, if you will, but the reality is different. Some of those that go to a previous slate, primarily in the GMA part, such as GMA, up
I anticipate seeing improvements of interest saves that come come as a result of that and moving forward into the future.
Profitability overall unchanged in terms of the model if you will.
But a reallocation of some of those expenses that showed up previously primarily in the G&A part of SG&A.
I've been to the gross margin line.
That will continue.
Going forward.
Speaker Change: That makes sense. Sorry. It may be one last one. I'll hop back into the queue. It sounds like the Immunometrics acquisition and integration is on track. You talked, I think you mentioned a couple of different times regarding some of the cross-selling synergies. Maybe just a little bit more color there on what this new addition has meant as far as opening up new doors, creating new conversations, anything along those lines. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
That makes sense, alright, and maybe one last one then I'll hop back into the queue I mean, it sounds like the matrix acquisition integration is on track you talked I think you mentioned a couple of different times regarding some of the cross selling synergies, maybe just a little bit more color there on and what this New addition has meant as far as.
Opening up some new doors, creating new conversation to say anything along those lines. Thank you.
Speaker Change: Yeah, yeah, yeah, very well.
Yeah, Matt.
Got it.
Internal perspective first.
Speaker Change: Uh, being, uh, the U.S. will be beginning, uh, pre-accession.
Yeah, So U S P.
Pre acquisition combined with our new team members from mainly metrics.
Speaker Change: Combined with our new team members from Mimpinetrics have come together and are working well. We're already seeing crops and maybe pollinization there in the sense of some of our team working on their projects.
Has that come together and are working well, we're already seeing cross Hoffman organization, there and in the sense of.
Some of our team working on their projects.
Speaker Change: So, very, very, very good effort internally, externally, yeah, the pipeline that brought to us on the acquisition has continued to develop, and it has been supplemented with the ability to put.
So very very good.
Internally externally.
Yeah, Yeah, Yeah pipeline and they brought to us on the acquisition.
Has continued to develop.
It's been supplemented with the ability to put in their models their expertise their therapeutic areas.
Speaker Change: their models, their expertise, their areas of expertise. I think in front of the core clients, they were able to handle and maintain their system due to the SLP, client base, and that generated a lot of opportunities and a very good deal of sales on that side, so very pleased that acquisition was closed.
These trends.
Brent.
More clients.
They were able to.
A standalone entity introducing them to the L. B.
Plant based and that's generated Oh, sorry.
He had a very very good sales effort there on that side, so very pleased.
The acquisition was closed.
Speaker Change: Not long until July , and we hit the six-month market, I guess, year-to-year, and that's been very, very good during those post-pandemic activities, both internally and externally. Excellent. Thank you.
It's not that long ago in July.
Yeah.
It's a six month mark here soon.
Staff here has been very good in terms of the post acquisition activity, both internally and externally.
Excellent. Thank you.
Thanks.
Our next question comes from the line of David Larsen with Ti T. Please proceed with your question.
Speaker Change: Hi, congrats on the good start to the year. I was pleased with the revenue that you reported. Can you maybe just talk a little bit about on the software side, the kinds of pricing increases you're able to realize heading into 2024 that will impact QQ. I'm trying to get at sort of the sequential progression in revenue for software as we head.
Hi, Congrats on the good starts a year I was pleased with the revenue number that you reported can you maybe just talk a little bit about on the software side.
The kinds of price increases you're able to realize heading into calendar 'twenty four that will impact to Q.
I'm trying to get at sort of the sequential progression in revenue for software as we had.
Speaker Change: into fiscal 2024. And then also I see, I think it was a 100% fee retention.
Into fiscal 'twenty four and then also I see I think it was 100% E retention.
Speaker Change: which you need to suggest to me that you can take pride. So, thanks.
Which seems to suggest to me that you can take price so thanks.
Yeah.
Speaker Change: Yeah, a couple of questions in your question there. Yeah, in terms of anticipating the 10.6.1 rule.
Yeah.
Yes, a couple a couple of questions embedded in your question there.
Yeah.
With anticipated sequential.
Speaker Change: I point to the seasonality of our business coming out of fiscal year 2023 last year.
Yep.
I see.
The reality of our business I mean.
Out of the fiscal year.
Your 23 last year.
We.
Speaker Change: you know, operate with a software revenue.
Operator, with a software revenue seasonality profile.
Speaker Change: easy analogy profile that says on an absolute dollar level, you know, our first quarter is the lowest quarter for top-up revenue, and then it has that add-up, and then next I can order more board order, and then to be more comfortable, you know, in terms of that absolute dollar level. So, on a year-over-year basis, our growth now,
There's an announced salary level.
Our first quarter is the lowest.
Quarter four software revenue yet.
And then.
Second third and fourth quarter tend to be more comparable.
So on a year over year basis.
Al.
Speaker Change: If you recall, we had our memorandum-based process that came into place last year, which changed the functionality. That process is done, and as we enter into this year, our revenue growth top-of-the-order-wise should be relatively consistent in the top-of-the-order-based.
If you recall, we had harmonization project, taking place last year would change that seasonality that process is done.
And as we enter into this year, our revenue growth software why.
Should be relatively consistent on a quarter to quarter basis.
Speaker Change: Does it say that there isn't going to be a renewal flip-flop from one board to the next? And in this board we have had some renewal flip-flops out of the fourth board.
It doesn't say it could be up.
Our renewal slipped.
From one quarter to the deck.
And in this quarter, we had renewals that slipped out of the fourth quarter and put them into one of the first quarter.
Speaker Change: With regard to pricing increases, we announced that we would put that at an impact in the fall timeframe.
Well, it's pretty hard to price increase or price increase we announced that in effect.
And Oh a timeframe.
So.
Speaker Change: you know, trying to increase the durability, affecting the search order results, and then they may attempt those rules during their search order.
The price increase.
He is already affecting this.
This first quarter result.
To the extent that those renewals.
For the first quarter.
Speaker Change: So it's not necessarily a jumped up from first expect a quarter a year over a year jump up. And this is a great price increase. So anticipating your life back in mid-air. No, we were certainly more at rest last year. This was for the year 2023 versus 2022. And the great price increase that we implemented last year.
Not necessarily a jump first and second quarter the year over year.
Yeah.
The price increase.
Anticipating your question there we were certainly more aggressive last year in fiscal year 'twenty pretty versus 'twenty two.
Price increase that we implemented last year than we were this year.
Speaker Change: and economic change with a little bit of economic environment and so our initiated price increase is not quite as large as it was last year, but it's a good contribution as we go through the year.
The economics have changed little bit macroeconomic.
Environment.
So yeah, our initiated price increases not quite as large as it was last year, but it's a it's a good contribution as we go into it.
Next year.
Speaker Change: 100% renewal on B this year, a very good renewal rate, there's been a renewal on ounce.
Mm, 100% renewal on fee this year reflective of a very good renewal rate.
Like Ericsson to the renewal on accounts.
Speaker Change: which is, you know, it is lower. You know, the accounts that closed out and did not renew were all relatively small accounts, so their impact on DDS was marginal. And the price increase we've seen there, and, you know, basically, our goal, we've been calculating off that, so those of you that did not renew. Hoping, yeah.
Which is you can always there's more work.
The accounts that are they closed out and did not renew were all relatively small accounts so their impact on fees.
It's marginal.
And the price increase came in and basically on a renewal.
Absolutely offset those for you.
So it did not or did.
Not really.
Hope that answers.
The aspects of your question.
Speaker Change: It does. Thanks very much. Can you just remind me, with regards to seasonality, what causes the uptick in software revenue from Skoll Longitude?
It does thanks very much. So can you just remind me with regards to seasonality what causes the uptick in software revenue, it's called one Peter Thanks.
Thanks.
Speaker Change: Keep in mind that our top quarter revenues, generally speaking, are in any given quarter 880% renewal, 10% upsell, 10% new logo. So, you know, from a day-to-day back to our quarter.
Well Brian.
Keeping in mind that our software revenues generally speaking.
In any given quarter, 80% renewal, 10% Upsells and 10%.
New logos.
So you know from a dating back to our Oregon.
Speaker Change: And when a client signs up, you know, typically their revenue, because it's all 100% recognized, the frontrunners will follow a more likelihood window, and forevermore, they're likely to be called a hoarder, in which case, you're just going to get out of business.
When a client signs up particularly there.
Their revenue because it's all 100% recognized upfront 12 months license window.
Forevermore there their license revenue falls in the quarter.
In which they initiated that.
With us in the first quarter.
Speaker Change: In the first quarter, typically the quarter ended in November . It is not a new license window. September picks up and it goes up like the end of our planning calendar year. January , February , February are more active than by-budget, so a lot of the license and other CD's are de-application.
Typically.
The quarter ended in November if not eight new licenses windows.
December picks up as he calls Austin weisenburger.
And claims calendar year January February for more active new budgets allow me to license and other ceded the application.
Speaker Change: hear today, and I look forward to seeing you next week.
And hence the step up from first to second quarter, and then more consistency through the remaining quarters of art school year.
Speaker Change: Okay, great. And then just in terms of your own COGS and inflation, in terms of like price increases that you can write into your own buy-in case, has that level of, I guess, inflation sort of moderated a bit, which would obviously be a benefit to margin?
Okay, Great and then just in terms of your own Cogs and inflation.
In terms of like the price increases that you're providing to your own scientists.
Has that level of I guess inflation sort of moderated a bit which would obviously be a benefit to margin.
Speaker Change: Yeah, it certainly in comparison to last year.
Yes, it certainly in comparison to Q2.
Two last year.
Speaker Change: in terms of the marketplace for our scientists as that level is that early in the last fiscal year really are. They don't know in terms of the compensation package as a place when you look at our fiscal 2023 versus fiscal 2022, where we had a pretty significant set-up at that post-COVID timeframe.
Compensation.
<unk> profile in terms of the marketplace for our scientists.
Abbott has settled.
Saddles at early in last fiscal year really our big jump up in terms of the compensation packages took place when you looked at our fiscal 'twenty three versus fiscal 'twenty, two where we had a pretty significant.
They can step up that post COVID-19 timeframe.
Speaker Change: and and and and and and
Some remnants of biotech.
Flurry is funding.
Is there Irene.
Speaker Change: which can increase competition in the marketplace of business care and resource. That's held down relatively early in our fiscal year. And so you roll forward from fiscal 2023 to 2024. Yeah, no, there is a weight in the way they take place. But not nearly as the meta as it was in 2023 versus 2024.
Which increased competition in the marketplace for that scarce resource.
That's still down.
Relatively early in our last fiscal year and so as you roll forward from fiscal 'twenty three 'twenty four mm yeah. No. There is a wage inflation that takes place, but not nearly as dramatic as it was 23 versus <unk> 22.
Speaker Change: And just one more from me, with regards to immunometrics, if I heard you correctly, the revenue being generated from immunometrics is expected to gain momentum, continue to increase, and the cross-line, again, a span change, the existing book should only grow as we head through 2024 and fiscal 25, and that would obviously benefit, I think, the QSP slash QSP line item for service, is that right?
Can you just just one more for me with regards to immune metrics. If I think if I heard you correctly.
Revenue being generated from aimed at matrix is expected to gain momentum and continue to increase in the cross selling and expansion into your existing book should only grow as we head through 'twenty four and into fiscal 'twenty five and that would obviously benefit I think the Q S. P. Slash Qs T line item for service is that right.
Speaker Change: Yeah, absolutely. Yeah. And then if you're already in first quarter, we'll start under second quarter.
Yes, absolutely.
Good benefit here already in the first quarter, where we saw 100% growth in.
Speaker Change: The service around anything they never.
USB services revenue, that's indicative of the contribution metrics there.
Already.
Speaker Change: We're working towards the turnout, that turnout is framed in calendar years, fiscal year.
They are.
We are working towards the earn out that earn out is is framed in calendar years, not our fiscal year.
Speaker Change: So they just recently completed the window of their first scan and earn out, the calculations are being made as to whether they fell out of care that afternoon, momentum is good and they will contribute to our QSP decision in quite a timely way, just to see if they told us the truth or that it's just a failure.
So they just recently completed.
Window of their firsthand earn outs.
Calculations are being made as to where they they fell out there. We'll know that soon momentum is good and they will contribute to our U S team.
Business units are quite nicely or anticipate that through the end of the true.
Through this fiscal year fiscal year and beyond.
Speaker Change: Okay, just one more for me, I'm sorry. China, 51%. Anything to highlight there, and just remind me what percentage of revenues come from China?
Just one more for me I'm, sorry, China up 51% anything to highlight there and can you just remind me what percentage of revenues coming from China.
Speaker Change: Yes, it's small contributors. Our revenue is about 20%, and in terms of the data, part of it would include Russia and South Africa. So, it's a good growth on a small number of the...
Yes, it's a small.
Contributors.
Our.
Revenue is about 20% in terms of the Asian.
To which we would tell you conclude.
Russia.
That bucket.
So it's a good growth on on a small number.
The.
Speaker Change: The road has just been hired as a software, and we don't have the consulting on the ground in that region. And so, yeah, I think this has been a good meeting with the two, three board members and their report.
And the growth is entirely software and we don't have a consulting on the ground in that region.
And so yes, we've been pleased I think this is a it's been a good sequences are 234 quarters and that's at an average of course.
Speaker Change: Cannot order.
Okay I'll hop back in the queue congrats on a good quarter.
Thanks, Dave.
Thank you.
Question comes from the line of Francois.
The Spa with Oppenheimer. Please proceed with your question.
Speaker Change: Do you share what you consider aggressive in terms of price increase, percentage-wise, or what you've done there, or, you know, any color on how, you know, what kind of percentages
Alright, Thanks for the question and congrats on of course.
Can you share what you consider.
Aggressive in terms of price increase percentage wise or what you've done there.
Yeah any color on how you know what kind of percentages those huh.
Speaker Change: Yeah, I mean, we haven't got a specific data rank, but from all our point of view, 5% of price increases have been sort of the norm in the industry, and since that last year, that's sort of the double, and you know, this year we've returned to the historic path.
Yeah, I mean, we haven't gotten specific there Frank but.
From a ballpark point of point of view at 5% price increases have been sort of the norm in the industry.
Yeah.
As scared that could've doubled.
And.
You know this year, we've returned to historical past.
Speaker Change: Okay, and when you say that this is safe, you know, we're hoping that it goes back to mid-to-teen growth, where would you consider the railroad?
Okay, and when you say that.
The space you know, we're hoping that it goes back to mid teens growth.
In terms of the space here, where would you consider the growth now.
Speaker Change: Where is the growth now?
Where is the growth now I mean, our guidance, 15% tells you that you know by my outlook and the growth of the businesses and that you know lower hassle.
Speaker Change: of the business that it had, you know, lower half of the team, and we remain pretty positive given the market, you know, in terms of the fact that the long-term growth out of this market segment, you know, that would be in the 15% or above the sort of the range.
The teams.
And as we remain pretty cautious given the sluggish.
Sluggishness.
The market.
Now in terms of expected long term growth out of this market segment.
That would be in the 15.
15% or above the sort of the range.
Rage.
Speaker Change: Okay, I guess what I'm trying to get at is, for you to pass, you know, kind of get by the growth of the market, would that, is that doable organically or does that require a
I guess, what I'm trying to get at.
For you to past you know kind of get you know get by the growth of the the market would that is that doable organically or does that require M&A.
Yeah.
Speaker Change: Yeah, I do enjoy it, and I think we grow out of the market growth, and, you know, the staff and the good services that are included.
Oh, Yeah. My view has always been that we can grow at or above market growth.
And.
The basket of goods and services that are included in most of your computational biology spirit their reports.
Speaker Change: in most years. I'm taking a while with the report.
Speaker Change: You know, we don't play all of our markets, and so there are some differences in terms of value, but generally, we've been able to grow out of the market and plant that with access.
We don't play in all of the markets under that umbrella.
So there is some some differences in terms of how you slice the pie there.
But generally if you look back historically, we've been able to grow at or above the market and supplant that with acquisition that doesn't become part of our organic growth.
Speaker Change: And then we got part of our organic paper in the late 80s. Yeah, that didn't go long.
Yeah in the long run.
Speaker Change: Okay. And in terms of the ratio of the software to services, obviously there's a new metric and I think there's a little more push on the service side. What would you ultimately, down the road, do to help us understand where we'd like to be in terms of that ratio?
Okay and in terms of the ratio there the software to services, obviously, the internet tricks and it gives you a little more of a push on the service side.
What would you ultimately down the road to help us understand where you would like to be in terms of that ratio.
Speaker Change: Well, you know, I think the 40 of them are pretty consistently, and I think, you know, it's important to, you know, that that is a input to top line revenue growth and bottom line profitability.
Well 60.
60, 40 has been our mantra pretty consistently.
And I told you that it at this point in time.
I think that's important too.
That is a input to topline revenue growth and bottom line profitability, obviously, the mix of software revenues and service revenues, yeah can contribute to that profitability.
Speaker Change: Obviously, the mixed software revenues, service revenues can contribute to that probability.
Speaker Change: number, you know, those revenue sources in different ways. So, you know, we've always, you know, targeted that sort of split, maintaining the probability.
You know those two revenue sources in different ways.
So we've always targeted that sort of split to maintain the profitability.
Speaker Change: I'm sure there's opportunities to do it this way for us, brother.
Service opportunities arise and service opportunities are good ways for us to broaden our support of our clients.
Speaker Change: It may not have a specific rating into that.
<unk> fits right into that.
Topline growth opportunities that didn't exist in the <unk>.
Before so theres always going to be a trade off over time.
Speaker Change: So there's always going to be a trade-off over time, but our commitment is to maintain good, high, and, although our current revenue growth is at the top of the line.
But our commitment is to maintain a good yeah hi.
Above market revenue growth at the topline and good profitability profile of the mall.
Speaker Change: and you can go to our profitability program I'll have them all on. Great, great. Thank you.
Yeah.
Great. That's it for me thank you.
Yeah.
Hum.
Our next question comes from the line of David Larsen.
Please proceed with your question.
Speaker Change: Just a quick follow-up here, in the deck, some of the divisions maybe were renamed. I just wanted to make sure that that's the case, like PB, PK, GASTRO, CPP model, they're coming out at that minute, QSP and other, and then the CPP would be PK, CPP, and REG is other. Is that correct or not?
Just a quick follow up here it seems like in the deck. Some of the divisions maybe were renamed I just wanted to make sure that that's the case like P. B PK as gastro CPP model that is coming from Alex admit Q S. P. Other.
And then C. P P would be PK, PD and Reg as other or is that correct or not.
Speaker Change: Yeah, yeah, you've got a new form of presentation there, Dave. The visiting units are PPPK, the Chem-Chromatics, the CCB, Clinical Pharmacology,
Yeah, you've got that too.
It forms a presentation in their day to day business units are.
The P. P. P K the Chem informatics a C P P clinical pharmacology.
Speaker Change: When we report the software, underlying details, Gatsby provides us with the primary software product and then the PPPK gives us two minutes, Monolith gives us the primary software product and the PPPB, and Admin Factor gives us the primary product and then Admin Plan.
If I'm, a coke metrics and the register regulatory strategies of the business units.
When we report the software.
The underlying details.
Gastro classes the primary software products in the TV business unit, a mono lake's as the primary software product in secrecy.
And Victor primary product an emphatic.
Speaker Change: Okay. Fantastic. Thank you. Congratulations again.
So we're presenting information there to summarize by business unit as well as summarized by yeah.
Yeah.
Okay Fantastic. Thank you Robert.
Okay.
Okay.
Thank you there are no further questions.
Right.
I'd like to turn the floor back over to Mr. Sean O'connor for closing comments.
Speaker Change: Thank you, Operator, and thank all of you for your attention today. Good start to the year. Congratulations, and I look forward to continuing to follow those next quarter. Take care.
Very good. Thank you operator, and thank all of you for your attention today, a good start to the year by simulations plus.
And.
I look forward to reporting.
Results next.
Next quarter take care.
This concludes today's teleconference.
May disconnect your lines at this time, thank you for your participation.
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Speaker Change: Be sure to rate and subscribe!
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Speaker Change: No time.
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Speaker Change: iwant PR.