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SEGMENT REPORTING | 6 Months Ended
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Feb. 29, 2024
Segment Reporting [Abstract] |
SEGMENT REPORTING | SEGMENT REPORTING The Company applies ASC 280, Segment Reporting, in determining reportable segments. The Company has two reportable segments: Software and Services. Segment information is presented in the same manner that the chief operating decision maker (“CODM”) reviews certain financial information based on these reportable segments. The CODM reviews revenue and gross profit for both of the reportable segments. Gross profit is defined as revenue less cost of revenue incurred by the segment. No operating segments have been aggregated to form the reportable segments. The Company does not allocate assets at the reportable segment level, as these are managed on an entity-wide group basis and, accordingly, the Company does not report asset information by segment. The Company does not allocate operating expenses that are managed on an entity-wide group basis and, accordingly, the Company does not allocate and report operating expenses at a segment level. There are no internal revenue transactions between the Company’s segments. The following tables summarize the results for each segment for the three months ended February 29, 2024, and February 28, 2023:
(in thousands) |  | Three Months Ended February 29, 2024
|  | Software |  | Services |  | Total
Revenues |  | $ | 11,614 |  |  | $ | 6,691 |  |  | $ | 18,305 |
Cost of revenues |  | 1,348 |  |  | 3,736 |  |  | 5,084 |
Gross profit |  | $ | 10,266 |  |  | $ | 2,955 |  |  | $ | 13,221 |
Gross margin |  | 88 | % |  | 44 | % |  | 72 | %
Our software business and services business represented 63% and 37% of total revenue, respectively, for the three months ended February 29, 2024.
(in thousands) |  | Three Months Ended February 28, 2023
|  | Software |  | Services |  | Total
Revenues |  | $ | 10,487 |  |  | $ | 5,263 |  |  | $ | 15,750 |
Cost of revenues |  | 843 |  |  | 1,777 |  |  | 2,620 |
Gross profit |  | $ | 9,644 |  |  | $ | 3,486 |  |  | $ | 13,130 |
Gross margin |  | 92 | % |  | 66 | % |  | 83 | %
Our software business and services business represented 67% and 33% of total revenue, respectively, for the three months ended February 28, 2023. Software Business For the three months ended February 29, 2024, the revenue increase of $1.1 million, or 11%, compared to the three months ended February 28, 2023, was primarily due to higher revenues from Monolix™ of $0.8 million, and higher revenues from ADMET Predictor® of $0.3 million. Cost of revenues increased $0.5 million, or 60%, primarily due to $0.2 million from the acquisition of Immunetrics, and gross profit increased by $0.6 million, or 6%, primarily due to the increase in revenues. Services Business For the three months ended February 29, 2024, the revenue increase of $1.4 million, or 27%, compared to the three months ended February 28, 2023, was primarily due to higher revenues from QSP services of $0.8 million, PBPK services of $0.5 million, higher revenues from PKPD services of $0.3 million, offset by lower revenues from REG services of $0.1 million. Cost of revenues increased by $2.0 million, or 110% primarily driven by $1.3 million from the reorganization of our internal structure from divisions based on prior acquisitions to business units organized around key product and service offerings and $0.4 million from the acquisition of Immunetrics, which contributed to our services headcount. Our new business unit structure is designed to optimize the utilization of our scientific talent in support of our revenue growth objectives. Gross profit decreased by $0.5 million, or 15%, for the same periods. The following tables summarize the results for each segment for the six months ended February 29, 2024 and February 28, 2023:
(in thousands) |  | Six Months Ended February 29, 2024
|  | Software |  | Services |  | Total
Revenues |  | $ | 19,203 |  |  | $ | 13,602 |  |  | $ | 32,805 |
Cost of revenues |  | 2,339 |  |  | 7,397 |  |  | 9,736 |
Gross profit |  | $ | 16,864 |  |  | $ | 6,205 |  |  | $ | 23,069 |
Gross margin |  | 88 | % |  | 46 | % |  | 70 | %
Our software business and services business represented 59% and 41% of total revenue, respectively, for the six months ended February 29, 2024.
(in thousands) |  | Six Months Ended February 28, 2023
|  | Software |  | Services |  | Total
Revenues |  | $ | 16,561 |  |  | $ | 11,153 |  |  | $ | 27,714 |
Cost of revenues |  | 1,728 |  |  | 3,563 |  |  | 5,291 |
Gross profit |  | $ | 14,833 |  |  | $ | 7,590 |  |  | $ | 22,423 |
Gross margin |  | 90 | % |  | 68 | % |  | 81 | %
Our software business and services business represented 60% and 40% of total revenue, respectively, for the six months ended February 28, 2023. Software Business For the six months ended February 29, 2024, the revenue increase of $2.6 million, or 16%, compared to the six months ended February 28, 2023, was primarily due to higher revenues from GastroPlus® of $1.0 million, higher revenues from Monolix™ of $0.8 million, higher revenues from QSP of $0.6 million, and higher revenues from ADMET Predictor® of $0.3 million. Cost of revenues increased by $0.6 million, or 35%, primarily due to $0.4 million from the acquisition of Immunetrics, and gross profit increased by $2.0 million, or 14%, primarily due to increase in revenues, for the six months ended February 29, 2024, compared to the six months ended February 28, 2023. Services Business For the six months ended February 29, 2024, the revenue increase of $2.4 million, or 22%, compared to the six months ended February 28, 2023, was primarily due to higher revenues from QSP services of $1.9 million, due to the addition of Immunetrics services revenues of $1.1 million, higher revenues of $0.8 million of the remaining QSP services, and higher revenues from PBPK services of $0.3 million, offset by lower revenues from REG services of $0.3 million. Cost of revenues increased by $3.8 million, or 108%, primarily driven by $1.9 million from the reorganization of our internal structure from divisions based on prior acquisitions to business units organized around key product and service offerings, $1.3 million from compensation costs due to expanding our scientific headcount as well as general annual salary adjustments, and $0.7 million from the acquisition of Immunetrics, which contributed to our services headcount. Our new business unit structure is designed to optimize the utilization of our scientific talent in support of our revenue growth objectives. Gr oss profit decreased accordingly by $1.4 million, or 18%, for the same periods.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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