Simulations Plus Exceeds Top-Line Guidance in Q2 2026 with Strong Growth Across Software and Service Segments
Simulations Plus, a leading provider of software solutions for pharmaceutical development, has reported strong financial results for its second quarter fiscal year 2026. The company exceeded its top-line guidance, delivering $24.3 million in revenue during the period, with growth in both its software and service segments.
"We're pleased with our first half fiscal 2026 performance and encouraged by the momentum that it is building across the business," said Sean O'Connor, Chief Executive Officer of Simulations Plus, during the company's recent conference call. "Our clients are seeing a pickup in spending reflected in solid software renewal rates, increased new logo activity, and strength in service bookings."
Adjusted EBITDA was $8.7 million, reflecting a 36% margin, while adjusted diluted EPS was $0.35, in line with the company's internal expectations. Simulations Plus' strong performance is attributed to encouraging market conditions globally, supported by ongoing most favored nation pricing agreements, easing tariff concerns, and a more supportive funding environment for its customers.
The company also addressed the impact of artificial intelligence (AI) on software companies, including its own. O'Connor noted that AI-related competitive concerns have weighed on valuations across most software-based business models, but emphasized that Simulations Plus has been an early adopter of AI and continues to lead in its practical application.
Simulations Plus believes that ongoing advances in AI are a net positive for biosimulation, accelerating the industry's transition toward data-driven drug development workflows. The company is embedding AI across its product roadmap, improving compute performance, interoperability between scientific engines, data management and curation, automation of repetitive modeling tasks, and making its tools more accessible across organizations.
"We have been an early adopter of AI for decades, beginning with the introduction of ADMET Predictor in the late 1990s," said O'Connor. "Our solutions are trusted, auditable, and difficult to replicate, which is why we have long been the preferred choice for commercial drug developers."
Simulations Plus' strong fundamentals and commitment to innovation position it well for continued growth and success in a rapidly evolving market. The company's ability to adapt to changing market conditions and leverage AI to enhance its solutions will likely drive future success.
