XML 24 R13.htm IDEA: XBRL DOCUMENT v3.24.1
SEGMENT REPORTING
 6 Months Ended
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
SoftwareServicesTotal
Revenues$11,614 $6,691 $18,305 
Cost of revenues1,348 3,736 5,084 
Gross profit$10,266 $2,955 $13,221 
Gross margin88 %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
SoftwareServicesTotal
Revenues$10,487 $5,263 $15,750 
Cost of revenues843 1,777 2,620 
Gross profit$9,644 $3,486 $13,130 
Gross margin92 %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
SoftwareServicesTotal
Revenues$19,203 $13,602 $32,805 
Cost of revenues2,339 7,397 9,736 
Gross profit$16,864 $6,205 $23,069 
Gross margin88 %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
SoftwareServicesTotal
Revenues$16,561 $11,153 $27,714 
Cost of revenues1,728 3,563 5,291 
Gross profit$14,833 $7,590 $22,423 
Gross margin90 %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. Gross profit decreased accordingly by $1.4 million, or 18%, for the same periods.