Total revenue for the year reached $79.2 million, a 13% increase from $70.4 million in 2024. The rise was driven by a 12% jump in software revenue to $45.8 million and a 15% increase in services revenue to $33.4 million. In the fourth quarter, revenue fell 6% to $17.5 million, reflecting a 9% decline in software sales and a 3% drop in services, underscoring a short‑term slowdown amid cautious client budgets.
Adjusted EBITDA climbed to $22.0 million, up 8% from $20.3 million in 2024, giving the company an adjusted EBITDA margin of 28%. The quarter’s adjusted EBITDA was $1.5 million, a margin of 8%, largely compressed by a $77.2 million impairment charge related to prior acquisitions. The charge left the company with a net loss of $64.7 million for the quarter, while the full‑year net income was $1.3 million.
Adjusted earnings per share for the year were $1.03, beating the consensus estimate of $0.95 by $0.08. The beat reflects disciplined cost management and the positive impact of the Pro‑ficiency acquisition, which added $100 million in cash and increased amortization expenses that compressed software gross margins.
The Pro‑ficiency acquisition, completed in June 2024 for $100 million in cash, expanded Simulations Plus’s addressable market and added a new product line. The integration has increased amortization of developed technology and capitalized software development costs, contributing to the 56% gross margin in Q4 versus 58% for the full year.
Management reiterated its fiscal 2026 guidance, maintaining a revenue range of $79 million to $82 million and an adjusted EBITDA margin of 26% to 30%. The guidance signals confidence in sustaining current revenue levels while acknowledging a cautious demand environment. The company also confirmed a virtual Investor Day on January 21 2026 to unveil its AI‑enabled product roadmap.
CEO Shawn O’Connor said, “We delivered 13% revenue growth and 8% adjusted EBITDA growth, but the market remains cautious.” CFO Will Frederick added, “The impairment charge reflects integration costs; we remain confident in long‑term value.”
Investors reacted with caution, noting the fourth‑quarter revenue decline and modest guidance. Analysts highlighted headwinds from client budget pressures and the impact of the Pro‑ficiency integration on margins.
The company’s focus on AI and cloud‑based solutions, exemplified by the launch of GastroPlus X.2 on the S+ Cloud, positions it to capture growing demand for AI‑enabled workflows across the drug development continuum.
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