In This Article:
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Total Revenue: Increased 31% year-over-year to $18.9 million.
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Organic Revenue Growth: 5% increase.
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Software Revenue: Grew 41%, representing 57% of total revenue.
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Services Revenue: Increased 19%, representing 43% of total revenue.
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Adjusted Diluted EPS: $0.17.
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Adjusted EBITDA: $4.5 million, 24% of revenue.
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Gross Margin: Total gross margin was 54%; Software gross margin was 75%; Services gross margin was 26%.
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Net Income: $0.2 million, 1% of revenue.
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Cash and Investments: $18.2 million, with no debt.
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Backlog: Ended the quarter with $17.3 million, up 22% sequentially.
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Software Customer Renewal Rate: 95% based on fees, 83% based on accounts.
Release Date: January 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Total revenue increased by 31% year-over-year, with a 5% organic growth, indicating strong overall performance.
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Software revenue grew by 41%, with significant contributions from the Clinical Pharmacology and Pharmacometrics (CPP) and Quantitative Systems Pharmacology (QSP) business units.
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The company added 12 new customers and achieved 9 customer upsells, showcasing successful client engagement and expansion.
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The integration of the Adaptive Learning and Insights (ALI) and Medical Communications (MC) business units is progressing well and is in line with expectations.
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The company ended the quarter with a strong backlog of $17.3 million, up 22% sequentially, indicating robust future demand for services.
Negative Points
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The macro environment remains challenging with funding and cost constraints affecting the pharma and biotech sectors.
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Services revenue declined by 9% on an organic basis, impacted by client-driven data delays that postponed project ramp-ups.
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Gross margins decreased compared to the prior year, with Software gross margin dropping from 87% to 75% and Services gross margin from 36% to 26%.
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Net income for the quarter was significantly lower at $0.2 million compared to $1.9 million last year, reflecting a decrease in profitability.
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The company faces ongoing challenges with project delays and budget constraints, which could impact future revenue realization.
Q & A Highlights
Q: The Software revenue growth was impressive at 41% year-over-year, with 18% organic growth. What drove this significant rebound? A: Shawn O'Connor, CEO: The growth was driven by strong performance across our platforms, particularly in the CPP and Monolix platforms. We saw significant uptake and expansion in existing licenses, including a major pharma client committing to PK Analytics. Additionally, our QSP platform saw significant license activity in two therapeutic areas, indicating strong client commitment and potential for further expansion.