Simulations Plus Reports Q2 Fiscal 2026 Revenue Up 8% to $24.3M, Diluted EPS Jumps 47% to $0.22, But Full-Year EPS Guidance Cut Due to Higher Tax Rate
Simulations Plus delivered solid second-quarter fiscal 2026 results, with total revenue increasing 8% year-over-year to $24.3 million, driven by 9% growth in software and 8% in services. Net income rose significantly by 45% to $4.5 million, leading to a diluted EPS of $0.22, up from $0.15 in the prior year. Management highlighted strong performance in discovery and development solutions, successful new logo additions, and an 18% increase in backlog, attributing momentum to favorable market conditions and increased client activity. However, the company adjusted its full-year fiscal 2026 adjusted diluted EPS guidance downward from $1.03-$1.10 to $0.75-$0.85, citing an increase in the expected effective tax rate from 12-14% to 23-25%.
Key Highlights
- Total revenue for Q2 Fiscal 2026 increased 8% year-over-year to $24.3 million.
- Software revenue grew 9% to $14.6 million, while services revenue increased 8% to $9.7 million in Q2 2026.
- Diluted earnings per share (EPS) for Q2 Fiscal 2026 rose 47% to $0.22, compared to $0.15 in Q2 Fiscal 2025, with net income reaching $4.5 million.
- Gross margin improved to 66% in Q2 Fiscal 2026 from 59% in the prior year quarter, and Adjusted EBITDA increased to $8.7 million, representing 36% of total revenue.
- CEO Shawn O’Connor noted strong bookings, resulting in an approximately 18% increase in backlog, driven by favorable market conditions, new logo additions, and client upsells.
- The company revised its Fiscal 2026 adjusted diluted EPS guidance range from $1.03 - $1.10 to $0.75 - $0.85, primarily due to an increase in the expected effective tax rate from 12-14% to 23-25%.