Simulations Plus, Inc.
For the period ended Feb 28, 2026. Filed Apr 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2026 · Filed Apr 10, 2026
SLP$18.500.0%Stored close · as of Oct 5, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-30; filed 2026-01-09.
0001023459-26-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-02-28; filed 2026-04-10.
0001023459-26-000016
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 105 current paragraphs.
56 unchanged; 18 reworded; 30 added; 8 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 1 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
The service-related costs increased $0.2 million, or 3%, compared to the three months ended February 28, 2025; the increase was primarily due to higher fulfillment costs associated with increased client services activity. The modest increase in service-related costs relative to revenue growth also reflected improved operating efficiency from headcount reductions implemented in the third quarter of fiscal 2025, and organizational changes that shifted certain internal resources from supporting services to research and development.
Current report
Gross profit increased $3.0 million, or 23% to $16.1 million for the three months ended February 28, 2026, compared to $13.1 million for the three months ended February 28, 2025. This increase was primarily driven by higher revenues, lower software-related costs, organizational changes that shifted certain internal resources from supporting services to research and development, improved billable utilization, and higher average yields.
Current report
Software gross profit increased by $2.1 million to 89% gross margin compared to 81% gross margin for the three months ended February 28, 2025. This improvement was primarily driven by increased software-related revenue, particularly from Development and Discovery solutions, and lower software-related costs, largely reflecting reduced amortization expense following the impairment of the Pro-ficiency developed technology in the third quarter of fiscal 2025.
Current report
Services gross profit increased by $0.9 million to 33% gross margin compared to 25% gross margin for the three months ended February 28, 2025. The increase was primarily attributable to higher services revenue from increased client services activity within Development solutions, as well as improved operating efficiency driven by headcount reductions implemented in the third quarter of fiscal 2025, organizational changes that shifted certain internal resources from supporting services to research and development, higher billable utilization, and higher average yields.
Current report
Overall gross margin was 66% for the three months ended February 28, 2026, compared to 59% for the three months ended February 28, 2025, primarily due to higher software and services revenues, lower software amortization expense, organizational changes that shifted certain internal resources from supporting services to research and development, higher billable utilization, and higher average yields.
Current report
We incurred $4.3 million of research and development costs during the three months ended February 28, 2026. Of this amount, $0.8 million was capitalized as part of capitalized software development costs, and $3.5 million was expensed. We incurred $2.9 million of research and development costs during the three months ended February 28, 2025. Of this amount, $0.8 million was capitalized, and $2.1 million was expensed. Research and development spend increased by $1.3 million, or 46%, for the three months ended February 28, 2026, compared to the three months ended February 28, 2025, representing our continued investment in innovation for future growth, including the development of an integrated, cloud-enabled modeling ecosystem that connects our validated scientific engines with AI-driven capabilities and workflow automation across the drug development lifecycle. The increase was primarily attributable to higher personnel-related costs, including organizational changes that shifted certain internal resources from supporting services to research and development, as well as increased efforts to support these development initiatives.
Current report
The expense for income taxes was $1.4 million for the three months ended February 28, 2026, compared to $0.4 million for the three months ended February 28, 2025. The Company tax rate increased to 23% for the three months ended February 28, 2026, compared to 12% for the three months ended February 28, 2025. The increase in the tax rate is primarily due to the result of a favorable discrete item in the prior year that did not recur in the current year, a less favorable jurisdictional mix of earnings between the U.S. and France, increased unfavorable Global Intangible Low-Taxed Income ("GILTI") impacts driven by higher French taxable income, and a lower Foreign-Derived Intangible Income ("FDII") benefit. In addition, certain items affecting the current-year effective tax rate relate to accelerated deductions elected under the One Big Beautiful Bill Act ("OBBBA"). These deductions are expected to be favorable to cash flows as they accelerate the timing of tax benefits and reduce near-term cash tax payments.
Current report
Results of Operations
Current report
Comparison of Six Months Ended February 28, 2026, and February 28, 2025
Current report
Revenues
Current report
Revenues increased by $1.4 million, or 3%, to $42.7 million for the six months ended February 28, 2026, compared to $41.4 million for the six months ended February 28, 2025. This increase is primarily due to a $2.0 million, or 12%, increase in service-related revenue and a $0.7 million, or 3%, decrease in software-related revenue when compared to the six months ended February 28, 2025. The service-related revenue increase of $2.0 million, or 12%, compared to the six months ended February 28, 2025, was primarily due to organic revenue growth within Development solutions of $1.3 million and Commercialization solutions of $0.8 million. The software-related revenue decrease of $0.7 million, or 3%, compared to the six months ended February 28, 2025, was primarily due to Clinical Operations solutions revenue decline of $1.9 million, partially offset by revenue growth of $0.8 million and $0.5 million within Development solutions and Discovery solutions, respectively.
Current report
Cost of revenues
Current report
Cost of revenues decreased by $2.3 million, or 13%, for the six months ended February 28, 2026, compared to the six months ended February 28, 2025. This decrease is primarily due to a $2.2 million or 41% decrease in software-related costs and a $0.2 million or 1% increase in service-related costs.
Current report
The software-related costs decrease of $2.2 million or 41%, compared to the six months ended February 28, 2025, was attributable to $1.6 million less amortization of acquired technology from the Pro-ficiency as the balances were impaired in the third quarter of fiscal 2025.
Current report
The service-related costs increase of $0.2 million or 1%, compared to the six months ended February 28, 2025. The increase in service-related costs was primarily due to higher fulfillment costs associated with increased client services activity. The modest increase in service-related costs relative to service-related revenue growth reflected improved operating efficiency resulting from headcount reductions implemented in the third quarter of fiscal 2025, organizational changes that shifted certain internal resources from supporting services to research and development.
Current report
Gross profit
Current report
Gross profit increased to $27.0 million or 63% gross margin for the six months ended February 28, 2026, compared to $23.3 million or 56% gross margin for the six months ended February 28, 2025. The increase was primarily attributable to higher service-related revenues, lower software-related costs, organizational changes that shifted certain internal resources from supporting services to research and development, and improved operating efficiency.
Current report
Software gross profit increased by $1.5 million, and software gross margin increased to 87% for the six months ended February 28, 2026, compared to 78% for the six months ended February 28, 2025. This improvement was primarily due to lower software-related costs, largely reflecting reduced amortization expense following the impairment of the Pro-ficiency acquired technology in the third quarter of fiscal 2025, partially offset by lower software-related revenue driven primarily by a decline in Clinical Operations solutions revenue.
Current report
Services gross profit increased by $2.2 million, and services gross margin increased to 34% for the six months ended February 28, 2026, compared to 25% for the six months ended February 28, 2025. This improvement was primarily due to higher service-related revenue from organic growth within Development solutions and Commercialization solutions, together with improved operating efficiency resulting from headcount reductions implemented in the third quarter of fiscal 2025 and organizational changes that shifted certain internal resources from supporting services to research and development.
Current report
Overall gross margin increased to 63% for the six months ended February 28, 2026, compared to 56% for the six months ended February 28, 2025, primarily due to higher service-related revenues, lower software amortization expense, organizational changes that shifted certain internal resources from supporting services to research and development, and improved operating efficiency.
Current report
Research and development
Current report
R&D spend as a percentage of revenue increased to 15% for the six months ended February 28, 2026, from 10% for the six months ended February 28, 2025, representing our continued investment in innovation for future growth, including the development of an integrated, cloud-enabled modeling ecosystem that connects our validated scientific engines with AI-driven capabilities and workflow automation across the drug development lifecycle. Total R&D cost (defined as capitalized R&D plus R&D expense) was 18% of revenue for the six months ended February 28, 2026, compared to 13% for the six months ended February 28, 2025.
Current report
Sales and marketing expenses
Current report
Sales and marketing expenses decreased by $0.5 million, or 7%, to $6.1 million for the six months ended February 28, 2026, compared to $6.6 million for the six months ended February 28, 2025. The decrease is attributable to $0.4 million lower compensation cost from the headcount reduction implemented in the third quarter of fiscal 2025, offset by $0.3 million of higher variable selling costs and customer-facing activities to support commercial execution and demand generation across our offerings.
Current report
General, and administrative expenses
Current report
Other income
Current report
Total other income was $0.5 million for the six months ended February 28, 2026, compared to total other income of $0.9 million for the six months ended February 28, 2025. The decrease is attributable to a $0.6 million decrease in the fair value of the Immunetrics earnout liability in the prior period, as no earnout payment was anticipated related to the second earnout measurement period, this was partially offset by increased interest income of $0.2 million due to higher balances of cash invested in interest-bearing accounts.
Current report
Income tax expense
Current report
The expense for income taxes was $1.6 million for the six months ended February 28, 2026, compared to $0.5 million for the six months ended February 28, 2025. The Company tax rate increased to 24% for the six months ended February 28, 2026, compared to 13% for the six months ended February 28, 2025. The increase in the tax rate is primarily due to the result of a favorable discrete item in the prior year that did not recur in the current year, a less favorable jurisdictional mix of earnings between the U.S. and France, increased unfavorable Global Intangible Low-Taxed Income ("GILTI") impacts driven by higher French taxable income, and a lower Foreign-Derived Intangible Income ("FDII") benefit. In addition, certain items affecting the current-year effective tax rate relate to accelerated deductions elected under the One Big Beautiful Bill Act ("OBBBA"). These deductions are expected to be favorable to cash flows as they accelerate the timing of tax benefits and reduce near-term cash tax payments.
Current report
Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions (recoveries) for credit losses, depreciation and amortization, stock-based compensation, deferred taxes, and other non-cash items and (ii) changes in the balances of operating assets and liabilities. Net cash provided by operating activities was $10.6 million for the six months ended February 28, 2026, compared to $4.4 million for the six months ended February 28, 2025. The $6.3 million improvement was driven primarily by an increase in cash-adjusted net income, an increase in deferred revenue and a decrease in cash outflow in other liabilities, partially offset by an increase in accounts receivable.
Removed paragraphs (8)
Previous report
The service-related costs decreased $0.1 million, or 1%, compared to the three months ended November 30, 2024, was primarily due to a $0.3 million reclassification of certain costs from general, and administrative (“G&A”) to cost of revenues to better align expenses with service delivery, and higher pass-through costs billed to a customer of $0.7 million associated with specific client engagements. These increases were partially offset by lower compensation-related costs as a result of the approximately 11% headcount reduction implemented in the third quarter of fiscal year 2025.
Previous report
Gross profit increased $1.5 million, or 15% to $10.9 million for the three months ended November 30, 2025, compared to $10.2 million for the three months ended November 30, 2024.
Previous report
Software gross profit decreased by $0.6 million primarily due to lower software revenue, particularly in Clinical Operations and Development solutions, offset by lower software-related costs, including reduced amortization.
Previous report
Services gross profit increased by $1.4 million, primarily due to higher services revenue driven by increased client services activity and headcount reduction implemented in the third quarter of fiscal 2025, partially offset by higher delivery costs, and higher pass-through costs on customer engagements.
Previous report
Overall gross margin was 59% for the three months ended November 30, 2025, compared to 54% for the three months ended November 30, 2024, primarily from a decrease in software amortization and by the effect of pass-through costs associated with certain services engagements.
Previous report
The expense for income taxes was $0.3 million for the three months ended November 30, 2025, compared to $0.1 million for the three months ended November 30, 2024. The Company tax rate increased to 30.3% for the three months ended November 30, 2025, compared to 23.7% for the three months ended November 30, 2024. The income tax rate increase is primarily due to favorable discrete items recognized for the three month ended November 30, 2024 that did not recur for the three months ended November 30, 2025.
Previous report
Net cash provided by operating activities was $4.2 million for the three months ended November 30, 2025, compared to net cash used by operating activities of $1.3 million for the three months ended November 30, 2024. The $5.5 million improvement was driven primarily by a $5.8 million year-over-year improvement in working capital cash flows, largely reflecting lower variable compensation of $1.8 million in the prior period, a $2.0 million higher contribution from deferred revenue, reflecting higher billings collected in advance and timing of revenue recognition, and a $1.2 million improvement in accounts receivable cash usage due to the timing of billings and collections. These favorable changes were partially offset by a $1.7 million increase in prepaid expenses and other assets and a $0.3 million decrease in cash generated from operating results before working capital changes (defined as net (loss) income adjusted for non-working capital items).
Previous report
Net cash used in operating activities was $1.3 million for the three months ended November 30, 2024. While we generated cash from operating results before working capital changes, working capital was a net use of cash, driven primarily by a $3.7 million increase in accounts receivable resulting from customer invoicing that occurred closer to quarter-end and the timing of collections, and a $4.1 million decrease in other liabilities, primarily reflecting cash payments of $1.8 million for variable compensation, $1.1 million of payments of accrued expenses, and one-time reorganization costs of $0.3 million. These uses of cash were partially offset by a $1.2 million increase in deferred revenue, reflecting customer billings collected in advance and timing of revenue recognition, a $0.5 million increase in accounts payable, and a $0.7 million decrease in prepaid expenses and other assets.
Reworded paragraphs (18)
Previous wording
Revenues decreased by $0.5 million, or 3%, to $18.4 million for the three months ended November 30, 2025, compared to $18.9 million for the three months ended November 30, 2024. This decrease is primarily due to a $1.8 million, or 17% decrease, in software-related revenue and a $1.3 million, or 16%, increase in service-related revenue when compared to the three months ended November 30, 2024. The software-related revenue decrease of $1.8 million, or 17%, compared to the three months ended November 30, 2024, was primarily due to a $1.4 million decline in revenue from Clinical Operations and a $0.4 million decline in revenue from Development. The service-related revenue increase of $1.3 million, or 16%, compared to the three months ended November 30, 2024, was primarily due to organic revenue growth of $0.8 million from Commercialization and $0.5 million from Development.
Current wording
Revenues increased by $1.9 million, or 8%, to $24.3 million for the three months ended February 28, 2026, compared to $22.4 million for the three months ended February 28, 2025. This increase is primarily due to a $1.2 million, or 9% increase, in software-related revenue and a $0.7 million, or 8%, increase in service-related revenue when compared to the three months ended February 28, 2025. The software-related revenue increase of $1.2 million, or 9%, compared to the three months ended February 28, 2025, was primarily due to a $1.2 million increase in revenue from Development solutions, $0.4 million increase in revenue from Discovery solutions, partially offset by a $0.5 million decline in revenue from Clinical Operations solutions. The service-related revenue increase of $0.7 million, or 8%, compared to the three months ended February 28, 2025, was primarily due to organic revenue growth of $0.8 million from Development solutions.
Previous wording
Cost of revenues decreased by $1.2 million, or 14%, for the three months ended November 30, 2025, compared to the three months ended November 30, 2024. This decrease is primarily due to a $1.2 million, or 46%, decrease in software-related cost and a $0.1 million, or 1%, decrease in service-related costs. The decrease reflects lower software-related costs, partially offset by higher services-related costs, consistent with the period’s revenue mix and delivery activity.
Current wording
Cost of revenues decreased by $1.2 million, or 12%, for the three months ended February 28, 2026, compared to the three months ended February 28, 2025. This decrease is primarily due to a $0.9 million, or 36%, decrease in software-related costs, partially offset by a $0.2 million, or 3%, increase in service-related costs.
Previous wording
The software-related costs decrease of $1.2 million, or 46%, compared to the three months ended November 30, 2024, was primarily due to less amortization of $0.8 million as a result the of Pro-ficiency developed technology being impaired in the third quarter of fiscal year 2025 and lower capitalized software amortization costs of $0.1 million.
Current wording
The software-related costs decrease of $0.9 million, or 36%, compared to the three months ended February 28, 2025, was primarily due to less amortization of $0.8 million following the impairment of the Pro-ficiency developed technology in the third quarter of fiscal 2025.
Previous wording
R&D spend as a percentage of revenue increased to 16% for the three months ended November 30, 2025, from 10% for the three months ended November 30, 2024 representing our continued investment in innovation for future growth. Total R&D cost (defined as capitalized R&D plus R&D expense) was 21% of revenue for the three months ended November 30, 2025, compared to 14% for the three months ended November 30, 2024.
Current wording
R&D spend as a percentage of revenue increased to 14% for the three months ended February 28, 2026, from 10% for the three months ended February 28, 2025, representing our continued investment in innovation for future growth. Total R&D cost (defined as capitalized R&D plus R&D expense) was 18% of revenue for the three months ended February 28, 2026, compared to 13% for the three months ended February 28, 2025.
Previous wording
Sales and marketing expenses increased by $0.3 million, or 12%, to $3.2 million for the three months ended November 30, 2025, compared to $2.9 million for the three months ended November 30, 2024. Sales and marketing as a percentage of revenue increased to 17% for the three months ended November 30, 2025, from 15% for the three months ended November 30, 2024. The increase primarily reflected higher variable selling costs and customer-facing activities to support commercial execution and demand generation across our offerings.
Current wording
Sales and marketing expenses decreased by $0.8 million, or 21%, to $2.9 million for the three months ended February 28, 2026, compared to $3.7 million for the three months ended February 28, 2025. Sales and marketing as a percentage of revenue, decreased to 12% for the three months ended February 28, 2026, from 17% for the three months ended February 28, 2025. The decrease is attributable to the headcount reduction implemented in the third quarter of fiscal 2025.
Previous wording
Total other income was $0.3 million for the three months ended November 30, 2025, compared to total other income of $0.1 million for the three months ended November 30, 2024. Interest income increased by $0.1 million due to higher balances of cash invested in interest-bearing accounts.
Current wording
Total other income was $0.3 million for the three months ended February 28, 2026, compared to total other income of $0.8 million for the three months ended February 28, 2025. Interest income increased by $0.1 million due to higher balances of cash invested in interest-bearing accounts. For the three months ended February 28, 2025, the Company recognized $0.6 million gain on the change in fair value of contingent consideration related to the Immunetrics holdback liability, which was settled.
Previous wording
We incurred $3.9 million of research and development costs during the three months ended November 30, 2025. Of this amount, $0.9 million was capitalized as part of capitalized software development costs, and $3.0 million was expensed. We incurred $2.6 million of research and development costs during the three months ended November 30, 2024. Of this amount, $0.7 million was capitalized, and $1.8 million was expensed. Research and development spend increased by $1.3 million, or 51%, for the three months ended November 30, 2025, compared to the three months ended November 30, 2024, reflecting higher investment in product and platform development activities, including continued enhancement and expansion of our software offerings and related capabilities. The increase was primarily attributable to higher personnel-related costs, consistent with increased efforts to support these development initiatives.
Current wording
We incurred $8.2 million of research and development costs during the six months ended February 28, 2026. Of this amount, $1.7 million was capitalized as part of capitalized software development costs and $6.5 million was expensed. We incurred $5.5 million of research and development costs during the six months ended February 28, 2025. Of this amount, $1.5 million was capitalized and $4.0 million was expensed. Research and development spend increased by $2.7 million, or 48%, for the six months ended February 28, 2026, compared to the six months ended February 28, 2025, reflecting higher investment in product and platform development activities, including continued enhancement and expansion of our software offerings and related capabilities. The increase was primarily attributable to higher personnel-related costs, including organizational changes that shifted certain internal resources from supporting services to research and development, as well as increased efforts to support these development initiatives.
Previous wording
G&A expenses decreased by $1.4 million, or 25%, to $4.0 million for the three months ended November 30, 2025, compared to $5.4 million for the three months ended November 30, 2024. G&A as a percentage of revenue decreased to 22% for the three months ended November 30, 2025, from 28% for the three months ended November 30, 2024. The decrease primarily reflected lower corporate support costs and reduced non-recurring spending. In addition, merger and acquisition-related costs decreased due to lower deal activity and associated professional fees in the current period. Facilities costs decreased as we continued to optimize our real estate footprint consistent with a remote-first operating model.
Current wording
General and administrative (“G&A”) expenses decreased by $1.8 million, or 18%, to $8.1 million for the six months ended February 28, 2026, compared to $9.9 million for the six months ended February 28, 2025. The decrease primarily reflected lower corporate support costs and reduced non-recurring spending. In addition, merger-and-acquisition-related costs decreased due to lower deal activity and associated professional fees in the current period. Facilities costs decreased as we continued to optimize our real estate footprint consistent with a remote-first operating model.
Previous wording
Our principal sources of capital have been cash flows from our operations. We expect existing cash, cash equivalents, short-term investments, cash generated by1 ongoing operations, and working capital will be sufficient to fund our operating activities and cash commitments for investing and financing activities and material capital expenditures for the next 12 months and beyond.
Current wording
Our principal sources of capital have been cash flows from our operations. We expect existing cash, cash equivalents, short-term investments, cash generated by ongoing operations, and working capital will be sufficient to fund our operating activities and cash commitments for investing and financing activities and material capital expenditures for the next 12 months.
Previous wording
At November 30, 2025, the Company had $30.2 million in cash and cash equivalents, $5.5 million in short-term investments, and net working capital of $47.8 million. Short-term investments consist of CD's and cash equivalents. The investments are U.S.-dollar-denominated securities.
Current wording
At February 28, 2026, the Company had $25.7 million in cash and cash equivalents, $16.1 million in short-term investments, and net working capital of $55.2 million. Short-term investments consist of CD's, corporate bonds, and cash equivalents. The investments are U.S.-dollar-denominated securities.
Previous wording
Net cash used in investing activities during the three months ended November 30, 2025, was $4.9 million. Investing cash flows primarily reflect deployment and rebalancing of our short-term investment portfolio and capitalized software development to support product and platform enhancements. During the quarter, we invested $5.5 million in short-term investments as part of our treasury strategy to prudently invest excess cash while preserving liquidity and capital, and we incurred $0.9 million of capitalized computer software development costs to support ongoing product development and technology improvements. These uses of cash were partially offset by $1.5 million of maturities of short-term investments as securities matured in the normal course of portfolio management.
Current wording
Net cash used in investing activities during the six months ended February 28, 2026, was $16.2 million, compared to $2.5 million during the six months ended February 28, 2025. The increase of $13.8 million primarily reflects deployment and rebalancing of our short-term investment portfolio and capitalized software development to support product and platform enhancements. During the six months ended February 28, 2026, we invested $16.0 million in short-term investments as part of our treasury strategy to prudently invest excess cash while preserving liquidity and capital, and we incurred $1.7 million of capitalized computer software development costs to support ongoing product development and technology improvements. These uses of cash were partially offset by $1.5 million of maturities of short-term investments as securities matured in the normal course of portfolio management.
Previous wording
Net cash provided by financing activities during the three months ended November 30, 2025, was less than $0.1 million, consisting of proceeds from the exercise of stock options.
Current wording
Net cash provided by financing activities during the six months ended February 28, 2026, was $0.5 million, compared to cash used in financing activities of $1.3 million for the six months ended February 28, 2025. The increase of $1.7 million was attributable to cash settlement of $1.6 million from the holdback obligations related to the Immunetrics acquisition and an increase in proceeds from the exercise of stock options.
Previous wording
For the three months ended November 30, 2025, and November 30, 2024, respectively, we did not repurchase any shares of Company stock. As of November 30, 2025, $30 million remains available for additional repurchases under our authorized repurchase program. However, we are not obligated to repurchase any additional shares, and the timing, manner, price, and actual amount of further share repurchases will depend on a variety of factors, including stock price, market conditions, other capital management needs and opportunities, and corporate and regulatory considerations. The share repurchase program has no expiration date but may be terminated at any time at our Board of Directors’ discretion.
Current wording
For the three and six months ended February 28, 2026, and February 28, 2025, respectively, we did not repurchase any shares of Company stock. As of February 28, 2026, $30 million remains available for additional repurchases under our authorized repurchase program. However, we are not obligated to repurchase any additional shares, and the timing, manner, price, and actual amount of further share repurchases will depend on a variety of factors, including stock price, market conditions, other capital management needs and opportunities, and corporate and regulatory considerations. The share repurchase program has no expiration date but may be terminated at any time at our Board of Directors’ discretion.
Previous wording
Software development costs are capitalized in accordance with ASC 985-20, “Costs of Software to Be Sold, Leased, or Marketed.” Capitalization of software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized computer software development costs require considerable judgment by management with respect to certain external factors including, but not limited to, technological feasibility, anticipated future gross revenues, estimated economic life, and changes in software and hardware technologies. Capitalized software development costs are comprised primarily of salaries and direct payroll-related costs and the purchase of existing software to be used in the Company’s software products. Total capitalized computer software development costs were $0.9 million and $0.7 million for the three months ended November 30, 2025, and November 30, 2024, respectively.
Current wording
Software development costs are capitalized in accordance with ASC 985-20, “Costs of Software to Be Sold, Leased, or Marketed.” Capitalization of software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized computer software development costs require considerable judgment by management with respect to certain external factors including, but not limited to, technological feasibility, anticipated future gross revenues, estimated economic life, and changes in software and hardware technologies. Capitalized software development costs are comprised primarily of salaries and direct payroll-related costs and the purchase of existing software to be used in the Company’s software products. Total capitalized computer software development costs were $0.8 million and $0.8 million for the three months ended February 28, 2026, and February 28, 2025, respectively.
Previous wording
Amortization of capitalized computer software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic life of the products, not to exceed five years. Amortization of software development costs amounted to $0.7 million and $0.8 million, respectively, for the three months ended November 30, 2025, and November 30, 2024, respectively. We expect future amortization expense to vary due to variations in capitalized computer software development costs.
Current wording
Amortization of capitalized computer software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic life of the products, not to exceed five years. Amortization of software development costs amounted to $0.9 million and $0.8 million, respectively, for the three months ended February 28, 2026, and February 28, 2025, respectively and $1.7 million and $1.6 million, respectively, for the six months ended February 28, 2026, and February 28, 2025. We expect future amortization expense to vary due to variations in capitalized computer software development costs.
Previous wording
As of November 30, 2025, the entire balance of goodwill was attributed to two of the Company's reporting units, Software and Services. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
Current wording
As of February 28, 2026, the entire balance of goodwill was attributed to both of the Company's reporting units, Software and Services. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
Previous wording
No impairment losses were recorded during the three months ended November 30, 2025, and November 30, 2024, respectively.
Current wording
No impairment losses were recorded during the three and six months ended February 28, 2026, and February 28, 2025, respectively.
Previous wording
The Company accounts for stock options in accordance with ASC 718-10, “Compensation-Stock Compensation.” Under this method, compensation costs include the estimated grant-date fair value of awards amortized over the options’ vesting period. Stock-based compensation costs, not including shares issued to directors for services, were $1.5 million and $1.7 million, for the three months ended November 30, 2025, and November 30, 2024, respectively.
Current wording
The Company accounts for stock options in accordance with ASC 718-10, “Compensation-Stock Compensation.” Under this method, compensation costs include the estimated grant-date fair value of awards amortized over the options’ vesting period. Stock-based compensation costs related to stock options, not including shares issued to directors for services, was $1.5 million and $1.6 million for the three months ended February 28, 2026, and February 28, 2025, respectively, and $3.0 million and $3.3 million for the six months ended February 28, 2026, and February 28, 2025, respectively.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
G&A expenses decreased by $0.4 million, or 10%, to $4.1 million for the three months ended February 28, 2026, compared to $4.6 million for the three months ended February 28, 2025. G&A as a percentage of revenue decreased to 17% for the three months ended February 28, 2026, from 20% for the three months ended February 28, 2025. The decrease primarily reflected lower corporate support costs and reduced non-recurring spending.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net cash used in investing activities during the three months ended November 30, 2024, was $3.1 million. Investing cash flows primarily reflect deployment and rebalancing of our short-term investment portfolio, capitalized software development to support product and platform enhancements, and certain strategic investment and acquisition-related items. During the quarter, we invested $3.5 million in short-term investments as part of our treasury strategy to prudently invest excess cash while preserving liquidity and capital, and we incurred $0.6 million of capitalized computer software development costs to support ongoing product development and technology improvements. We also used cash for investing in intangible assets of $0.2 million, and a net working capital and excess cash settlement payment of $0.2 million related to the Pro-ficiency acquisition. These uses of cash were partially offset by $1.5 million of maturities of short-term investments as securities matured in the normal course of portfolio management.
Previous report — wording carried elsewhere
Net cash provided by financing activities during the three months ended November 30, 2024, was $0.3 million, primarily due to proceeds from the exercise of stock options.