Simulations Plus, Inc. (SLP): History, Ownership, Mission, How It Works & Makes Money

How does Simulations Plus, Inc. (SLP) manage to accelerate drug discovery for major pharmaceutical companies, and why should its recent financial performance matter to your portfolio? This small-cap powerhouse, which specializes in biosimulation (computer modeling of biological systems), is defintely punching above its weight, posting a trailing twelve-month revenue of approximately $80.4 Million as of May 2025, with its core Software segment driving a massive 41% growth in the first quarter of fiscal year 2025. It's a classic example of a niche technology leader, with a market capitalization of around $342 Million, that helps the biopharma industry cut billions in R&D costs by predicting drug behavior in silico (via computer simulation) before a single lab test. If you want to understand the mechanics behind this critical shift in drug development-and what that means for its future valuation-you need to look past the ticker and into the technology.

Simulations Plus, Inc. (SLP) History

Simulations Plus, Inc. (SLP) has carved out a critical niche in the biopharma sector by pioneering modeling and simulation software for drug discovery and development. The company's trajectory, rooted in a personal mission, has evolved from a small, private firm to a publicly traded leader, culminating in a preliminary fiscal year 2025 revenue of $79.1 million, an increase of 13% over the prior year.

You need to understand this history to appreciate the company's current strategic focus on artificial intelligence (AI) and cloud-based solutions. The firm's original impetus was deeply personal, which defintely shaped its long-term commitment to accelerating new medicines.

Simulations Plus, Inc.'s Founding Timeline

Year established

Simulations Plus, Inc. was established on July 17, 1996.

Original location

The company was originally located in San Diego, California, though its current headquarters are in Research Triangle Park, North Carolina.

Founding team members

The company was founded by Walter Woltosz and Virginia Woltosz.

Initial capital/funding

Initial funding came from a settlement Walter Woltosz received related to the development of an ADA assistive device for his son, who had Amyotrophic Lateral Sclerosis (ALS). The exact amount was not publicly specified, but this unique origin story highlights the mission-driven nature of the company's start.

Simulations Plus, Inc.'s Evolution Milestones

Simulations Plus, Inc.'s Transformative Moments

The company's evolution was driven by strategic acquisitions that broadened its biosimulation (computer-based modeling and simulation) and services portfolio, moving from a single-product software company to a comprehensive solutions provider. This is how they built a defensible market position.

• Shift to Services and Clinical Focus: The acquisition of Cognigen Corporation in 2012 and DILIsym Services, Inc. in 2014 were transformative. They added clinical trial data analysis and mechanistic modeling capabilities, respectively, allowing Simulations Plus to engage deeper in the drug development lifecycle.
• The AI and Cloud Pivot (2025): The focus on a new product vision and the launch of GastroPlus® X.2 on the S+ Cloud in late fiscal year 2025 is a critical moment. This move aims to deepen platform integration and advance AI capabilities, which is essential to sustain growth in a challenging market.
• Financial Resilience and Growth: Despite market headwinds, the company's preliminary fiscal 2025 results showed a strong software mix of 58% of total revenue, which is a high-margin, sticky revenue stream. This solid foundation allowed for an Adjusted EBITDA margin of 28% for the fiscal year.

For a deeper dive into the numbers and what they mean for your portfolio, you should check out Breaking Down Simulations Plus, Inc. (SLP) Financial Health: Key Insights for Investors. The next step is to analyze their ownership structure and mission to understand who controls the firm and what drives their long-term strategy.

Simulations Plus, Inc. (SLP) Ownership Structure

The control of Simulations Plus, Inc. (SLP) is a balance between institutional money and the influence of its original founders and key management, giving it a hybrid governance structure. Institutions hold the majority stake, but individual insiders retain a significant enough percentage to align their interests defintely with long-term performance.

Given Company's Current Status

Simulations Plus is a publicly traded company, listed on the NASDAQ Global Select Market under the ticker symbol SLP. This public status means its financials, ownership, and governance are transparently reported via SEC filings, which is what gives us this clear view.

For the fiscal year 2025 (FY2025), which ended August 31, 2025, the company reported preliminary revenue of approximately $79.1 million, showing solid growth in its biosimulation and cheminformatics software and services business. This growth translated to an expected adjusted diluted Earnings Per Share (EPS) of $1.03 for the full fiscal year 2025. The company has approximately 20.13 million shares outstanding as of November 2025. You can dig deeper into the company's strategic direction and core beliefs by reviewing the Mission Statement, Vision, & Core Values of Simulations Plus, Inc. (SLP).

Given Company's Ownership Breakdown

As of late 2025, the ownership structure shows a heavy concentration in institutional hands, which is typical for a mid-cap technology company. However, the substantial insider stake, primarily from the founders, means management has a strong vested interest in the stock price. That's a good sign for you as an investor.

Given Company's Leadership

The company is steered by a seasoned executive team with deep roots in the pharmaceutical and biosimulation technology sectors. Their focus is on integrating artificial intelligence (AI) into their core platforms, like the recent launch of GastroPlus® X.2 (GPX.2) on the S+ Cloud platform.

The key leaders driving the strategy and operations as of November 2025 include:

• Shawn O'Connor: Chief Executive Officer (CEO), providing the overall strategic direction.
• Will Frederick: Chief Financial Officer (CFO), managing the financial health and operational efficiency.
• John A. DiBella: Chief Revenue Officer (CRO), appointed in May 2025 to lead all revenue-generating activities.
• Josh Fohey: Chief Operating Officer (COO), overseeing the day-to-day business operations.
• Viera Lukacova: Chief Science Officer, ensuring scientific precision in the core software products.
• Erik Guffrey and Jonathan Chauvin: Co-Chief Product & Technology Officers, jointly responsible for the product vision and technology roadmap, especially the push into AI and cloud services.

This leadership structure, with a clear separation of science, product, and revenue roles, is designed to keep the company agile while scaling its technical capabilities.

Simulations Plus, Inc. (SLP) Mission and Values

Simulations Plus, Inc. (SLP) stands for more than just its preliminary fiscal year 2025 revenue of $79.1 million; its core purpose is to accelerate drug discovery and development, directly improving patient health. This mission drives its focus on innovative, science-based software and consulting solutions, even as the company navigates financial complexities like the $77.2 million non-cash impairment charge reported in the third quarter of 2025.

Simulations Plus, Inc.'s Core Purpose

The company's cultural DNA centers on a commitment to public health, leveraging its biosimulation (computer-based simulation) and cheminformatics (chemical information science) tools to make the pharmaceutical research and development (R&D) process faster and safer. You can see this dedication in their core values, which are the non-negotiables guiding every decision.

Official mission statement

The company's mission is a clear directive to its clients and stakeholders, focusing on tangible R&D benefits and patient outcomes. It's a pragmatic, value-creation statement.

• Create value for our customers by accelerating and reducing the costs of R&D.
• Optimize treatment options and improve patient lives through innovative science-based software and consulting solutions.

Honest to goodness, this is how they justify the price tag on their software licenses, which accounted for 58% of their preliminary FY 2025 revenue. Mission Statement, Vision, & Core Values of Simulations Plus, Inc. (SLP).

Their foundation is built on four core values that dictate how they operate:

• Innovation: Pursuing novel and creative solutions to defintely impact the world.
• Respect: Promoting a diverse workforce and inclusive culture, plus serving their communities.
• Integrity: Thoroughly and accurately communicating with uncompromised truth and honesty.
• Commitment: Providing quality products and exceptional services that deliver to their partners.

Vision statement

The vision statement is the high-level aspiration-the ultimate goal that all the software development and consulting services are working toward. It's concise and patient-centric.

• To improve health through innovative solutions.

This focus is crucial, especially when you look at the Q3 2025 net loss of $64.0 million; the long-term vision of improving health is the anchor that keeps investors focused beyond the near-term financial adjustments.

Simulations Plus, Inc. slogan/tagline

A good tagline captures the company's impact in just a few words, and Simulations Plus uses a phrase that summarizes its role in the biopharma ecosystem.

• Transforming Drug Development.

It's a simple, powerful message that tells you exactly what they aim to do for the pharmaceutical and biotechnology industries: fundamentally change the R&D process. This clear purpose is what supports their preliminary adjusted diluted EPS of $1.03 for fiscal year 2025, showing that mission-driven work can still yield strong financial results.

Simulations Plus, Inc. (SLP) How It Works

Simulations Plus, Inc. operates by developing and licensing advanced biosimulation and cheminformatics software, plus providing expert consulting services, to predict how new drug candidates will behave in the human body long before costly clinical trials begin. Their tools essentially replace or significantly reduce expensive, time-consuming lab experiments and clinical phases with fast, data-driven computer modeling.

Given Company's Product/Service Portfolio

Given Company's Operational Framework

The company's operational model is built on two primary revenue streams: Software and Services. For fiscal year 2025, preliminary results show Software accounted for 58% of the total revenue of $79.1 million, demonstrating a strong reliance on recurring license fees.

The core of their value creation is the continuous development and integration of predictive modeling technologies, especially AI and machine learning (ML). The recent launch of GastroPlus X.2 on the S+ Cloud is a key step in their strategy to move their flagship platforms to a unified, cloud-based, AI-enhanced environment. This shift is designed to accelerate software delivery and deepen platform integration.

• Software Segment: Generates high-margin, recurring revenue from annual licenses for platforms like GastroPlus and ADMET Predictor.
• Services Segment: Provides consulting, custom modeling, and regulatory support, leveraging the company's software and expert staff to solve complex drug development problems for clients.
• Efficiency Focus: Management initiated a restructuring plan that included a workforce reduction of approximately 10% of full-time staff in fiscal year 2025, aiming to reduce annual operating expenses by about $4.3 million.

You can see more on the ownership structure and institutional interest here: Exploring Simulations Plus, Inc. (SLP) Investor Profile: Who's Buying and Why?

Given Company's Strategic Advantages

Simulations Plus holds a defintely resilient position because its software is considered essential infrastructure for drug development, not a discretionary purchase. It's hard to switch once you're embedded in a client's R&D workflow.

• Regulatory Validation: Their PBPK/PBBM (Physiologically Based Biopharmaceutics Modeling) software, GastroPlus, is widely accepted by global regulatory agencies, including the FDA, for submissions, which creates a significant barrier to entry for competitors.
• AI/ML Leadership: The company is aggressively integrating AI/ML across its portfolio, as seen with the new AI-powered tools in GastroPlus X.2, positioning them at the forefront of in silico (computer-simulated) drug design.
• Financial Flexibility for M&A: The balance sheet is strong, with a healthy current ratio of 5.11 and more cash than debt, giving them the financial firepower for strategic acquisitions to expand their software offerings and market reach.
• Comprehensive Solution Suite: They offer a full modeling and simulation workflow, from early-stage compound design (ADMET Predictor) to clinical trial optimization (MonolixSuite), making them a one-stop shop for biopharma modeling needs.

Simulations Plus, Inc. (SLP) How It Makes Money

Simulations Plus, Inc. generates the majority of its revenue by licensing its proprietary biosimulation software to pharmaceutical and biotech companies, which is a high-margin, recurring revenue stream. The remaining significant portion comes from providing specialized, fee-for-service consulting that uses this same software to accelerate drug development and regulatory submissions.

Simulations Plus's Revenue Breakdown

For the fiscal year 2025, Simulations Plus reported preliminary total revenue of approximately $79.1 million, representing a 13% increase over the prior year. The business is clearly segmented into two distinct, yet complementary, streams.

Business Economics

The core of the Simulations Plus business model is the recurring nature of its software licensing, which provides a predictable revenue base that is defintely the most valuable part of the company. The software segment, which includes products like GastroPlus® and ADMET Predictor®, is what drives the high-quality earnings.

• Pricing Strategy: The company uses a subscription-based model for its software, typically involving annual licenses. This model is sticky, meaning customers are highly likely to renew, and the company reported a fee-based renewal rate of 95% in the first quarter of fiscal 2025. The value proposition is simple: their biosimulation platform saves biopharma clients significant time and money in the drug discovery and development process.
• Gross Margin Profile: There is a stark contrast in the profitability of the two segments. Software gross margin was around 75% in the first quarter of fiscal 2025, while the Services gross margin was much lower at approximately 26%. This split highlights why investors prioritize the growth of the 58% software segment-it's where the real profit engine is.
• Growth Drivers: Services revenue growth remains strong, increasing by 23% in the first nine months of fiscal 2025, while Software revenue grew 18% over the same period. This shows a healthy demand across the board, but the Services segment's growth is often impacted by client-driven project delays.

The software business is a classic high-leverage model; once the code is written, selling an extra license is almost pure profit.

For a deeper dive into the institutional interest, you should check out Exploring Simulations Plus, Inc. (SLP) Investor Profile: Who's Buying and Why?

Simulations Plus's Financial Performance

While the top-line revenue growth for fiscal year 2025 was solid at 13%, you need to look past the headline numbers to understand the true financial health, especially after a major non-cash event. Here's the quick math on the key metrics:

• Net Income and Impairment: The company reported a substantial net loss of $64.0 million for the first nine months of fiscal 2025. What this estimate hides is that this was primarily driven by a massive, one-time, non-cash impairment charge of $77.2 million, which was related to aligning asset values with market conditions following a strategic reorganization. Excluding that charge, the underlying business is profitable.
• Adjusted Profitability: The preliminary full-year fiscal 2025 results show an Adjusted Diluted Earnings Per Share (EPS) of $1.03. This adjusted figure gives a much clearer picture of the ongoing operational profitability.
• EBITDA Margin: The preliminary Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin for fiscal 2025 is expected to be around 28%. This is a healthy margin for a software and services company, but management is focused on improving this to the historical 35%-40% range by focusing on higher-margin software sales.
• Cash Position: Simulations Plus operates with a clean balance sheet, reporting $18.2 million in cash and investments with no debt as of the end of the first quarter of fiscal 2025. This strong cash position provides flexibility for continued acquisitions and internal R&D investment.

Your next step is to compare these margins to their direct competitors to see if their pricing power is translating into best-in-class profitability.

Simulations Plus, Inc. (SLP) Market Position & Future Outlook

Simulations Plus operates as a specialized, high-margin software and services provider in the growing biosimulation market, with a clear strategic pivot toward cloud-based, AI-driven solutions to accelerate drug discovery. Despite a challenging biopharma funding environment, the company is expected to meet its revised fiscal 2025 revenue guidance of approximately $79.1 million, demonstrating resilience in its core software business.

Competitive Landscape

The biosimulation market, valued at an estimated $4.47 billion in 2025, is dominated by a few large, integrated players, positioning Simulations Plus as a highly specialized niche competitor. The company's focus on physiologically-based pharmacokinetics (PBPK) and quantitative systems pharmacology (QSP) software, particularly with its flagship GastroPlus platform, allows it to compete effectively against much larger rivals.

Here's the quick math: Simulations Plus's estimated 2025 revenue of $79.1 million represents about 1.8% of the total $4.47 billion biosimulation market, highlighting its smaller, focused market position compared to Certara, which commands a much larger share, especially in the drug discovery software segment.

Opportunities & Challenges

Management's new product vision is a clear roadmap for near-term opportunity, but the company must navigate persistent macro headwinds impacting client spending and address recent internal challenges.

Industry Position

Simulations Plus holds a strong, defensible position within the niche of PBPK and QSP modeling, which are critical components of Model-Informed Drug Development (MIDD). The company's core strength is its software segment, which accounted for 58% of its fiscal 2025 revenue. That's a high-margin, sticky business.

• Regulatory Endorsement: The company's software is used by major regulatory bodies globally, including the US FDA, which validates its scientific rigor and drives adoption among pharmaceutical clients.
• Cloud and AI Pivot: The launch of the S+ Cloud platform with AI-powered tools like GPX.2 is a necessary move to keep pace with competitors like Schrödinger and Certara, who are also heavily investing in these areas.
• Services Backlog: Despite a services slowdown, the backlog remains strong at $20.7 million, with over 91% expected to convert to revenue within the next 12 months, providing near-term revenue visibility.

The recent $77.2 million non-cash impairment charge on previous acquisitions is a defintely painful reminder that not all growth-by-acquisition strategies pay off immediately, forcing a renewed focus on core operational efficiency. For a deeper dive into the investor base, check out Exploring Simulations Plus, Inc. (SLP) Investor Profile: Who's Buying and Why?