Simulations Plus, Inc. (SLP): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the core engine of Simulations Plus, Inc. (SLP) as they navigate that tricky pivot toward AI and cloud deployment, and frankly, seeing the numbers behind the strategy is defintely the first step. The story here is the stark contrast: you have the high-margin software business delivering 58% of the $45.8 million in revenue with an elite 79% gross margin, set against the lower-margin services segment, all while they manage $30.9 million in cash as of August 31, 2025. I've broken down the entire Business Model Canvas for you below, showing exactly how their key activities and customer segments are being reshaped to support this future; you'll want to see the details on their customer relationships, which are driving an average revenue per client of $143,000 in FY2025.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Key Partnerships

You're looking at the network of external entities that help Simulations Plus, Inc. deliver its value proposition, especially as the company integrates its recent major acquisition and pushes its cloud and AI strategy. These alliances are crucial for both market reach and scientific validation.

Funded Grant Agreements with Regulatory Bodies like the FDA

Simulations Plus, Inc. maintains an active relationship with the U.S. Food and Drug Administration (FDA) through multiple funded agreements, which validates the scientific rigor of its core software platforms. As of late 2025, the company reports having 9 funded grant awards from the FDA specifically to continue enhancing the GastroPlus platform. These collaborations help embed their modeling approaches into regulatory workflows.

Recent examples show the depth of this partnership:

• Secured a newly funded grant in partnership with the University of Strathclyde and InnoGI Technologies to validate In Vitro-In Vivo Extrapolation (IVIVE) methods for amorphous solid dispersion (ASD) formulations.
• Awarded a new FDA grant, funded through award 1U01FD008304-01, in collaboration with the University of Connecticut to build and validate mechanistic In Vitro-In Vivo Correlations (IVIVCs) for long-acting injectable (LAI) technologies using GastroPlus®.
• An earlier cooperative agreement provided $250,000 annually for two years to enhance the Transdermal Compartmental Absorption and Transit (TCAT™) model.

Academic and Research Collaborations for AI Drug Design Validation

The company actively partners with academic and research institutions to validate and advance its Artificial Intelligence-driven Drug Design (AIDD) technology within the ADMET Predictor® software. This external validation is key to maintaining the perceived value of their AI offerings.

Here's a look at some of these scientific partnerships:

Technology Partners for Cloud Infrastructure and Deployment

Simulations Plus, Inc. is executing a broader, integrated Cloud and AI strategy, which necessitates strong underlying technology partnerships, even if specific vendor names aren't always public. The focus is on deployment and interoperability. The recent launch of GastroPlus® X.2 (GPX.2) marks the debut of their AI-powered tools on the S+ Cloud. For fiscal year 2026, the plan is to expand these capabilities across other flagship platforms, aiming for a connected ecosystem.

Strategic Alliances for Co-marketing and Distribution in Specific Regions

Simulations Plus, Inc. relies on established distributor channels to provide local technical and marketing support in key international markets. The company maintains strong distributor channels in Brazil, China, India, Japan, and South Korea. These relationships are vital for extending the reach of their software solutions globally.

Integration Partners for Clinical Operations Solutions (Pro-ficiency)

The acquisition of Pro-ficiency Holdings, Inc. for $100 million in cash in June 2024 fundamentally changed this partnership dynamic, bringing clinical operations solutions in-house. This integration was expected to be accretive to fiscal 2025 earnings per share (EPS) and effectively doubled the Total Addressable Market (TAM) by adding $4 billion to the existing $4 billion biosimulation market. Pro-ficiency's revenue mix is now part of the Services segment.

The performance of the acquired segment within fiscal year 2025 shows significant integration impact:

• Pro-ficiency revenue declined 63% for the fourth quarter of 2025 compared to Q4 2024.
• Pro-ficiency revenue grew 206% for the full fiscal year 2025 (the prior year reflects only post-June 2024 acquisition revenue).
• Medical Communications (Med Comm) services, which include Pro-ficiency's offerings, grew 70% for the quarter and 622% for the full fiscal year 2025.

Finance: review the Q1 2026 budget allocation for Pro-ficiency integration costs by January 15th.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Key Activities

Software development and R&D, focusing on AI/ML integration.

Simulations Plus, Inc. is advancing an integrated Cloud and AI strategy, with the recent launch of GastroPlus® X. 2 marking the debut of AI-powered tools on the S+ Cloud platform. The company plans to expand these capabilities across other flagship platforms over the next year. For the full fiscal year 2025, total revenue reached $79.2 million, with software revenue contributing $45.8 million, a 12% increase year-over-year.

The software segment gross margin for fiscal 2025 stood at 79%, significantly higher than the total gross margin of 58% for the same period. Development products, which include GastroPlus and MonolixSuite, accounted for 75% of the full-year software revenue mix. Specifically for GastroPlus, revenue growth for the fiscal year was 1%.

Key software product revenue contributions for the full fiscal year 2025 were:

• Development products (GastroPlus, MonolixSuite): 75% of software revenue.
• Discovery products (ADMET Predictor): 17% of software revenue.
• Clinical Ops products (Pro-ficiency): 8% of software revenue.

Providing expert scientific consulting and contract research services.

The Services segment for fiscal 2025 generated $33.4 million in revenue, representing 42% of total revenue, and grew by 15% year-over-year. The services gross margin was 30%. This segment activity is broad, encompassing various specialized services, which saw differing performance levels.

Services revenue performance by type for fiscal year 2025 included:

The company ended the fiscal year with 311 commercial clients, achieving an average revenue per client of $143,000 for the full year. The quarterly software renewal rate was 83%, with an average revenue per client in the fourth quarter of $94,000.

Maintaining and updating core biosimulation software platforms (e.g., GastroPlus®).

Simulations Plus, Inc. released GastroPlus® 10.2, and the company is focused on portfolio-wide updates. The core software platforms are essential, with Development products, which include GastroPlus, making up the largest portion of software revenue. The overall software revenue grew by 12% in fiscal 2025, reaching $45.8 million.

For the fourth quarter of fiscal 2025, the revenue breakdown by product category was:

• Development products (GastroPlus and MonolixSuite): 77% of quarterly software revenue.
• Discovery products (ADMET Predictor): 18% of quarterly software revenue.
• Clinical Ops products (Pro-ficiency): 5% of quarterly software revenue.

Sales and marketing of high-margin software licenses.

The high-margin nature of the software business is evident in its gross margin of 79% for fiscal 2025, compared to the services margin of 30%. Total revenue for fiscal 2025 was $79.2 million, with software accounting for 58% of that total. The full-year software customer renewal rate was 88%.

Executing the strategic transition to a unified operating model.

Simulations Plus, Inc. completed its transition to a unified operating model in fiscal 2025, integrating product, technology, scientific R&D, consulting services, and business development into a single structure. This strategic reset followed a year where total revenue grew 13% to $79.2 million, with adjusted EBITDA and adjusted EPS both growing by 8%. The company maintains a strong balance sheet with $32.4 million in cash and no debt.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Key Resources

You're looking at the core assets Simulations Plus, Inc. (SLP) relies on to operate and grow, which are heavily weighted toward intellectual property and specialized human capital. These resources are what underpin their entire value proposition in the biopharma modeling space.

The foundation is definitely the proprietary, validated biosimulation software portfolio. These are the engines that drive revenue and client engagement. For instance, the flagship development products, which include GastroPlus® and MonolixSuite™, represented 75% of the total software revenue for the full fiscal year 2025.

Also critical is the deep domain expertise in Model-Informed Drug Development (MIDD). This isn't just about having the code; it's about the people who understand how to apply it to complex regulatory and development challenges. The company has more than 25 years of experience serving clients globally in this niche. Furthermore, they are actively investing in the scientific engines trusted by global regulators and leading R&D teams.

The Intellectual Property (IP) and algorithms for ADMET Predictor® are another cornerstone. This machine learning platform for ADMET modeling enables rapid estimation of over 175 properties from molecular structure alone. For the full fiscal year 2025, revenue from Discovery products, primarily ADMET Predictor, accounted for 17% of total software revenue.

Financially, you need to know the balance sheet strength. As of August 31, 2025, Simulations Plus, Inc. reported cash and cash equivalents of $30,853 thousand. The company noted they ended the year with no debt.

Finally, the future-facing resource is the investment in the cloud-scale compute infrastructure supporting new AI-driven workflows. Management noted accelerating demand for cloud deployment and scale, AI-assisted workflows, and interoperability across products to support end-to-end modeling workflows from discovery through clinical development.

Here's a quick look at how the key software components performed in terms of revenue growth for the full fiscal year ended August 31, 2025:

The company closed the fiscal year with a specific customer base, which is a key metric for recurring revenue health:

• Commercial clients ended the fiscal year at 311.
• Average revenue per client for the full fiscal year was $143,000.
• The full fiscal year renewal rate was 88%.
• For the fourth quarter, the renewal rate was 83%.

The MIDD expertise is further supported by the breadth of their modeling capabilities, which you can see in the types of solutions they offer:

• Physiologically Based Pharmacokinetics (PBPK) modeling.
• Quantitative Systems Pharmacology/Toxicology (QSP/QST).
• Population PK/PD modeling approaches.
• Integration of Artificial Intelligence/Machine Learning (AI/ML).

Finance: draft 13-week cash view by Friday.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Value Propositions

You're looking at the core reasons why biopharma clients pay for Simulations Plus, Inc. (SLP) solutions. It boils down to speed, certainty, and scientific rigor in a highly regulated space.

Accelerating drug discovery and development timelines.

Simulations Plus, Inc. (SLP) provides the tools that directly feed into the industry's push for faster development. The company explicitly states its mission is to accelerate biopharma innovation. Evidence of this impact is clear: Simulations Plus, Inc. (SLP)'s advanced modeling and simulation software and consulting services supported the development of the majority of drugs approved by the U.S. Food and Drug Administration (FDA) in 2024. This work is done across a client base that includes 18 of the top 20 Big Pharma organizations in the world, with a total of 280 clients.

Reducing the cost and risk of clinical trials via simulation.

The value proposition here is tied to the industry shift, supported by legislation like the FDA Modernization Act 2.0, which encourages computer modeling over animal testing in early phases. The company's platforms, which leverage AI/ML and physiologically based modeling, are designed to help clients make faster, smarter decisions at the intersection of chemistry and pharmacokinetics. This simulation-based approach inherently reduces the need for costly, late-stage failures.

Providing regulatory-grade data and reports for submissions.

The scientific rigor baked into the software is a key differentiator. The company emphasizes that its science is regulatory-grade and scientifically-validated, which is essential for submissions to global regulators. The integrated ecosystem is designed to support end-to-end modeling workflows from discovery through clinical development, including streamlined regulatory compliant reporting.

High-margin software segment with an elite 79% gross margin.

The core software business is where the economic power of Simulations Plus, Inc. (SLP) truly shows. For the fiscal year 2025, the software segment achieved an elite gross margin of 79%. This high profitability validates the mission-critical nature of flagship products like GastroPlus and MonolixSuite. For context, the services segment's gross margin was 30% for the same period, leading to a consolidated gross margin of 58% on total fiscal year 2025 revenue of $79.2 million.

Here's a quick look at the financial structure supporting this segment:

Integrated AI/ML and cloud deployment for enhanced user experience.

Simulations Plus, Inc. (SLP) is actively evolving its offerings to meet the convergence of cloud computing and AI in drug development. This strategy is evidenced by recent product enhancements:

• The release of ADMET Predictor 13 in June 2025, which integrates advanced AI/ML capabilities.
• The inclusion of an upgraded AI-driven drug design (AIDD) engine.
• The debut of AI-powered tools on the Simulations Plus cloud, starting with GastroPlus X.2.
• The platform offers enterprise-ready automation via extended APIs and Python scripting support for scalability.

These efforts aim to deliver automation, scalability, and AI-assisted efficiency directly into client workflows. The company plans to continue this with portfolio-wide updates in fiscal 2026.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Customer Relationships

You're looking at how Simulations Plus, Inc. (SLP) keeps its customer base engaged and growing, which is critical given the shift to a unified operating model in fiscal 2025. Retention and increasing the value extracted from each client are clearly top priorities.

Annual software license renewals form the bedrock of recurring revenue, a key focus for retention. For the full fiscal year 2025, the company achieved a software customer renewal rate of 88% based on fees. Looking specifically at the fourth quarter of fiscal 2025, the renewal rate based on accounts was 83%, showing some fluctuation due to market conditions and client consolidations. SLP ended fiscal 2025 with 311 commercial clients in total.

The focus on increasing the average revenue per client is explicit, with management targeting and achieving an average revenue per client of $143,000 for the entire fiscal year 2025. This metric reflects the combined value derived from both software licenses and services.

The services segment requires a high-touch, expert-led engagement because it involves complex consulting and outsourced project work. This segment, which represented roughly 42% of total fiscal 2025 revenues, or $33.4 million, has a significantly lower gross margin at 30% compared to the software segment's 79% gross margin. The level of engagement is high; for instance, in the fourth quarter of fiscal 2025, the company worked on 191 total services projects. This segment includes specialized areas like Medical Communications, which saw substantial growth.

Dedicated scientific consulting and technical support are embedded within the services structure, which also includes support for platforms like GastroPlus and ADMET Predictor. The software business, which made up about 58% of total revenue ($45.8 million in FY2025), relies on strong technical support to drive adoption of its core platforms.

User conferences and training are part of the strategy to foster software adoption and stabilize relationships. Management confirmed engaging in significant activities around proposal activity and conference engagements to stabilize client relations despite broader market challenges throughout the year. Here's a quick look at the revenue mix that these relationships support for fiscal 2025:

The ongoing effort to maintain high-quality interactions is evident in the structure, which completed a transition to a unified operating model in 2025, integrating product, R&D, and consulting functions to be more client-focused. This structural change is designed to better support the expert-led engagement required for services and to drive software renewals.

You can see the direct results of these relationship efforts in the following key retention and value metrics:

• Software Customer Renewal Rate (FY2025 fees): 88%.
• Software Customer Renewal Rate (Q4 FY2025 accounts): 83%.
• Total Commercial Clients (End of FY2025): 311.
• Services Projects Worked On (Q4 FY2025): 191.

Finance: draft 13-week cash view by Friday.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Channels

You're looking at how Simulations Plus, Inc. (SLP) gets its value propositions-the software and the expertise-into the hands of pharmaceutical and biotech clients as of late 2025. The structure is a mix of direct engagement and digital delivery.

The direct sales force targets enterprise pharmaceutical and biotech clients for the core software licenses and increasingly, cloud access. This direct touchpoint is crucial for securing the high-value, recurring software revenue stream. The company completed a strategic transition to a unified operating model, which supports deepening client engagement across all offerings.

Online distribution is the mechanism for delivering software licenses and cloud access. The launch of GastroPlus® X.2 on the S+ Cloud marks a significant step in this digital channel, supporting the accelerating adoption of cloud deployment by clients. The software segment generated $45.8 million in revenue for the full fiscal year 2025.

Expert-led consulting services are delivered by a team that supports project delivery, which is reflected in the Services revenue line. For the fiscal year ended August 31, 2025, this channel contributed $33.4 million to total revenue. The total employee count supporting these functions and other operations was 213 as of late 2025.

Investor relations and public communications use specific events to reach the financial community. For instance, the company announced a Virtual Investor Day scheduled for Wednesday, January 21, 2026, to present its new product vision and AI solutions. The Q4 FY2025 Earnings Presentation was made available on December 1, 2025.

The global presence shows revenue concentration, with the company earning most of its revenue from the USA, followed by EMEA and Asia Pacific. The total revenue for the fiscal year 2025 was $79.2 million.

Here's the quick math on how the primary revenue-generating channels performed in the full fiscal year 2025:

The delivery mechanisms for clients include specific product focuses:

• Direct sales force supports enterprise adoption of platforms like ADMET Predictor.
• Expert-led consulting utilizes tools such as DILIsym for drug-induced liver injury prediction.
• Online distribution is key for accessing cloud-scale performance for intensive modeling.
• The company is focusing on interoperability and AI-driven workflows across its platforms.

The geographical distribution of this revenue flow is weighted heavily toward the domestic market. What this estimate hides is the exact split between USA, EMEA, and Asia Pacific, as specific percentages weren't public.

• USA: Largest revenue contributor.
• EMEA: Second largest revenue contributor.
• Asia Pacific: Third largest revenue contributor.

Finance: draft 13-week cash view by Friday.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Customer Segments

You're looking at the core users of Simulations Plus, Inc. (SLP) tools as of late 2025. Honestly, the data points directly to a heavy reliance on the biopharma sector, which drives the bulk of their $79.2 million in total revenue for fiscal year 2025. Simulations Plus, Inc. ended the year with 311 commercial clients.

The customer base is segmented by the type of solution they purchase, which clearly maps to the industries you listed. Software, which is the core product, made up 58% of the full fiscal year 2025 revenue, while Services accounted for the remaining 42%. The average revenue generated per client over the trailing twelve months ending August 31, 2025, was $94,000.

Here's how the software revenue, which is the largest component, was distributed across the key product lines that serve these segments:

The services side of the business, which grew 15% for the full year 2025, directly supports the clinical and communications needs of these clients. The services revenue breakdown for Q3 2025 showed a strong contribution from Medical Communications (MC).

The customer segments you identified are served through these primary channels:

• Major global pharmaceutical and biotechnology companies: This group is the core user of the GastroPlus and MonolixSuite platforms, which together comprised 68% of software revenue in the trailing twelve months.
• Clinical operations and medical communications departments: Services revenue in Q3 2025 showed solid performance from Medical Communications services, which contributed to the 17% growth in total services revenue for that quarter.
• Academic institutions for research and education: The company develops software for use in pharmaceutical research and education.
• Regulatory agencies (e.g., FDA) utilizing modeling software: Management noted that adoption of cloud deployment and interoperability is accelerating across the customer base, which is essential for meeting enterprise and regulatory expectations.
• Agrochemical, cosmetics, and food industry firms: While not explicitly broken out, these sectors fall under the broader application of the company's simulation and modeling technology beyond just biopharma.

The overall software customer base maintained a renewal rate of 83% based on accounts for the trailing twelve months. The company's software revenue for the full fiscal year 2025 was $45.8 million.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Cost Structure

You're looking at the core expenses driving Simulations Plus, Inc. (SLP) as of late 2025, and honestly, the numbers show a tale of two businesses. The cost structure is heavily influenced by the performance divergence between the software licensing side and the services delivery side.

The consolidated gross margin for the full year 2025 landed at 58%, based on $46.2 million in gross profit on $79.2 million in total revenue. This overall figure masks the segment disparity. The Software segment, which brought in $45.8 million in revenue, maintained an elite gross margin of 79%. However, the Services segment, which generated $33.4 million in revenue, saw its gross margin collapse to 30% for fiscal year 2025. That 35 percentage point drop from FY2023 levels definitely signals higher relative cost of revenue in service delivery.

Here's a quick look at how the revenue streams contributed to the margin picture in FY2025:

Operating expenses reflect strategic choices made during a tough year. Research and Development (R&D) expense was reported at 9% of revenue for fiscal 2025, up from 8% the prior year. This reflects the continued investment in product innovation, specifically laying the groundwork for AI capabilities and deeper platform integration across offerings like GastroPlus X.2.

Personnel costs are a major component, and management took action in the fourth quarter. To right-size the cost base, a 10% workforce reduction was executed in Q4 2025. This restructuring incurred a $0.7 million charge but is targeted to deliver $4.3 million in annualized operating expense savings. This move was part of a broader strategic reorganization to a functionally driven operating model.

The cost structure was dramatically impacted by a major non-operating event tied to past capital allocation decisions. Simulations Plus, Inc. recorded a significant non-cash impairment charge of $77.2 million in FY2025. This charge, which included $51.6 million of goodwill impairment, was largely related to the Pro-ficiency acquisition, and it was the primary driver behind the full-year net loss of $64.7 million.

Driving new business and supporting the expanded portfolio required increased spending on go-to-market activities. Sales and marketing expense was 15% of revenue for fiscal 2025, an increase from 13% in the previous year. This spending supports initiatives to drive software adoption and increase market awareness across the now-integrated portfolio.

You should keep an eye on these key expense ratios:

• R&D Expense: 9% of total revenue for FY2025.
• Sales and Marketing Expense: 15% of total revenue for FY2025.
• G&A Expense (excluding nonrecurring items): 25% of revenue for FY2025.

Finance: draft 13-week cash view by Friday.

Simulations Plus, Inc. (SLP) - Canvas Business Model: Revenue Streams

You're looking at how Simulations Plus, Inc. (SLP) brings in the cash, which is key for understanding its stability, especially after a year with significant non-cash charges. Honestly, the revenue mix shows a strong reliance on its core software engine, but the services side is growing faster, which is an interesting dynamic to watch.

For the total fiscal year 2025, Simulations Plus, Inc. recorded total revenue of $79.2 million. This represents a solid 13% increase compared to the prior fiscal year, showing resilience in the biopharma R&D spending environment.

The revenue streams are clearly segmented into two main buckets: Software and Services. Here's the quick math on how those broke down for FY2025:

Software license revenue was $45.8 million, making up 58% of the total FY2025 revenue. This segment is the high-margin bedrock of the company, with the core modeling and simulation products commanding strong pricing power. This revenue is generated through licenses and annual subscription fees for flagship products that are mission-critical for Model-Informed Drug Development (MIDD).

The services revenue, totaling $33.4 million, accounted for the remaining 42% of the top line. This stream comes from consulting and contract research, applying SLP's tools to client pipelines. Services revenue actually grew by about 15% in FY2025, outpacing the software growth rate, as medical communications and modeling projects expanded. If onboarding takes 14+ days, churn risk rises, but the backlog in services was strong.

The recurring revenue component from subscriptions is defintely important here, tied directly to the flagship software platforms. You see the value in the continued use of these specialized tools:

• Annual subscription fees for flagship products like GastroPlus, which simulates drug movement through the body.
• Annual subscription fees for MonolixSuite, which includes PKanalix for bioequivalence studies.
• Revenue associated with the ADMET Predictor software.

Furthermore, the revenue mix includes contributions from newer or specialized business units that fall under the Services umbrella, but represent distinct offerings:

• Revenue generated by the Adaptive Learning & Insights (ALI) business unit.
• Revenue derived from Medical Communications (MC) services.
• Revenue from Quantitative Systems Pharmacology (QSP) modeling projects.

Finance: draft 13-week cash view by Friday.