Simulations Plus Signs Altaris Takeover After Services-Led Quarter

The Tip Desk · July 9, 2026 · 2 min read

Services revenue rose 20% to $9.3 million in the quarter ended May 31, 2026, as software held at $12.6 million.

Simulations Plus, Inc. (SLP), a model-informed and AI-accelerated drug-development software and consulting company, entered a definitive merger agreement on June 15, 2026 to be acquired by affiliates of Altaris, LLC, with closing expected in the fourth quarter of calendar 2026.

The transaction was announced after the company reported third-quarter fiscal 2026 results for the period ended May 31, 2026. Total revenue increased 7% to $21.9 million, after an 8% increase to $24.3 million in the prior quarter. Chief Executive Officer Shawn O’Connor said the quarter was highlighted by services strength while software revenue was flat year over year.

Software revenue was $12.6 million, or 58% of the total, after a 9% increase to $14.6 million in the second quarter. The company said overall software revenue was flat for the quarter and 3% lower on a trailing-twelve-month basis, with renewal rates affected by client consolidations and site closures. Commercial software renewal rate on a fee-based basis, excluding perpetual licenses, was 90%, after 84% in the prior quarter. Average revenue per commercial client was $105 thousand.

Services revenue increased 20% to $9.3 million, or 42% of the total, after an 8% increase to $9.7 million in the prior quarter. Services backlog was $23.3 million, after $20.7 million in the prior quarter. Development and commercialization remained the mix of services revenue, with commercialization at 78% of the services line for the quarter.

Gross profit was $15.1 million and gross margin was 69%, compared with 66% in the prior quarter. Research and development expense was $3.4 million. Sales and marketing was $2.5 million. General and administrative expense excluding nonrecurring items was $4.2 million. GAAP results swung to net income of $3.6 million and diluted earnings of $0.18 a share from a net loss of $67.3 million and diluted loss of $3.35 a share a year earlier, when the company recorded a $77.2 million impairment. Adjusted EBITDA was $7.9 million, or 36% of revenue. Adjusted diluted EPS was $0.30.

Cash and cash equivalents were $35.3 million at May 31, 2026, and short-term investments were $14.7 million. Accounts receivable were $17.2 million. Deferred revenue was $5.3 million. Total shareholders’ equity was $139.0 million.

Fiscal 2026 guidance remained unchanged at revenue of $79 million to $82 million, or 0% to 4% growth, software mix of 57% to 62%, adjusted EBITDA margin of 26% to 30%, and adjusted diluted EPS of $0.75 to $0.85. The company said it remains focused on delivering for clients and executing through the transition toward the expected Altaris closing.