Blair, you know, really, I think in the early stages of your growth, you did a lot of trajectory. I think as an industry, biosimulation is still in its early stages of growth. Maybe just, Shawn, we could kick it off by talking about what biosimulation the market is, and where you fit in, in that sort of industry. Sure. First of all, thanks, picking up coverage timely so that I could come to Vail. Yep. You got it. Worked out, worked out well. Yeah, biosimulation is the application of predictive analytics using in silico modeling and simulation to support the drug development process, a process that is on average 10+ years in the making for a drug to be developed and approved, an average cost of $2 billion+ per drug, a lot of which is driven by the low batting average, about 5,000 molecules out of discovery and into clinical development for every one drug that gets approved by the FDA. So modeling and simulation, its groundings date back to applications in semiconductor prototyping, aerospace industry. Let's design the plane, test the plane in silico in the computer before we put a pilot into that prototype built airplane and put 'em in the air. In a similar way, how do we use the computer, the data available, the technology, in terms of what today we know as AI, when we started, not labeled as such, to be more predictive about a molecular structure and its likelihood of successfully passing through all the hoops that are necessary in order to become an efficacious and toxic-free approved drug in the marketplace. Biosimulation, therefore, is a host of software tools and applications. There's no one modeling and simulation tool. A scientist in this field is like a construction worker with a tool kit of multiple techniques and approaches. Those tools have different application whether you're looking at discovery applications in which we're trying to go through a lead optimization process to identify the molecule to take into the clinic, or whether we are in preclinical trying to assess early lab testing results and design a next step animal study to address toxicity, or whether we're translating from animal studies to human studies, how will those animal results be predictive of that drug's performance in human biology. Down the path into the clinical phases, the identification and setting of a clinical trial protocol, the manual, if you will, for a clinical trial performance, analyzing those results afterwards, supporting the process of presenting all of this information to the FDA or other regulatory bodies around the world, and then ultimately as well supporting commercialization issues that may arise after drug approval. So a number of tools, a number of disciplines of modeling and simulation, and a business model that both provides these software tools to our clients for them to perform this type of work, or our consultants doing that work in support of our clients' drug programs. $4 billion market TAM in terms of our biosimulation market, generally expected to grow 12% to 14% annually, some years above, some years below that. We have consistently targeted market growth or better, given our positioning, the strength of our products and services, in this biosimulation space, and have generally achieved that. We've got a business strategy that has supplemented organic growth with acquisitions, over the years. Company is 25 years in the making, early introduction of its first product in the mid-late 1990s, and we've supplemented our organic growth with seven acquisitions to date, and one in each of the last two years. Most significantly, our acquisition announced last month, two months ago now, I guess, June, was an acquisition of an entity that was an adjacency, and that acquisition brought an additional $4 billion of market opportunity to take our total market TAM at $8 billion, an acquisition of a similar technology simulation company, but in the clinical operations space, which I'm sure Scott will ask me a question or two. That's a good question. I can go into more detail on. You're right. So you just talked about how kind of the biosimulation market is fragmented with a lot of different offerings. You just described the pharmacometrician as almost like a construction worker having multiple sets of tools that he needs to deploy, and each of these, it's very fragmented with a lot of these vendors that are selling individual tools. Mm-hmm. M&A is part of your growth strategy. You just bought this big acquisition. Is it your largest acquisition to date? Our largest, yes. Yep. Yes. Pro-ficiency. And it, and it opened up another $4 billion of TAM. Can you just talk maybe high level on what exactly it opened up that you did, what capabilities you didn't have in the biosimulation market with Pro-ficiency? Yeah, yeah. Pro-ficiency is a company that leverages technology and science, and that's really the philosophical connection between our legacy business and Pro-ficiency. The touchpoint to explain the connection is that protocol document that defines the instruction manual for the performance of a clinical trial. Biosimulation is heavily used, and we support the development of that protocol. What's the dosing regimen? What is the patient stratification? What is the target patient for that clinical trial? What are the particulars of the protocol in terms of testing along the way? Should we draw blood once a day, twice a day, once a week, whatever it might be that is appropriate for that drug candidate? The protocol is a document that is shared with the FDA before the clinical trial is initiated. You know, obviously the communication there is one of, what do you think, FDA, in terms of this protocol, and should its results, be attained as expected, is this a profile of a drug that you would approve? Not getting into the weed too much, an important factor in there is the powering of that clinical trial, which speaks to how many patients in that clinical trial. One patient clinical trial is great and makes you great results, but can that be extrapolated into a drug approval for the market as a whole? We could do 10,000 patients, and that would be great, but the cost of that clinical trial may be billions of dollars. So the protocol is a process in which we try to statistically and predictively identify the right protocol, right drug regimen, right patient stratification, to meet the needs in terms of the FDA's approval ultimately. I mean, that was a capability that Pro-ficiency brought to you. That is the legacy SOP. Gotcha. Contribution to that protocol. Okay. Pro-ficiency comes into play because, despite all of the effort to perfect the protocol, Phase III clinical trials have still a 15%, 20% success rate. And what is the failure of those clinical trials? It may be that the drug does not meet the endpoints that were expected, but often the fallout of that clinical trial is the lack of adherence to the protocol document. So we've designed a protocol that says we're gonna incorporate 1,000 patients in the clinical trial, but because each patient was not administered the regimen to the protocol, perhaps all 1,000 patients make it through the clinical trial, but 200 of 'em fall out because of lack of adherence. And now at an 800-person clinical trial, the power of that clinical trial results is insufficient for the FDA to approve the drug. Back into the clinic is the result. Pro-ficiency comes into play in terms of the adherence to that protocol. Its platform, its software platform, digests that protocol, identifies the key training components, factors, and ensures and delivers a more effective training process to the sites, the medical personnel, and those that are involved in administering the protocol, and monitors that performance so that the drug sponsor can get more early warning signals that, hey, the Austin, Texas site is not adhering to the protocol sufficiently, jump in, train, address the issue, and/or accelerate the patient, sign-up in terms of the other sites that are administering the protocol properly. So this gives us another approach to our ultimate goal of how do we ensure the effectiveness of clinical trials and their success in its outcome and approvability at the FDA level. So Pro-ficiency brings us a different approach to that protocol document and the clinical trials and their success in support of our clients. And then it also has commercialization capabilities too, right? Yeah, there's a MedCom business. MedCom business is an agency business in the drug development world, an agency business that gathers KOLs to a medical board, key opinion leaders, that support the drug sponsor both before approval in terms of providing guidance to the drug sponsor, the pharma company, as well as providing input to the regulatory bodies through the process of its development. And then at a second stage after approval, that medical board also is utilized in the commercialization process, enrolling that drug out into the marketplace and educating and training the medical community as to how to use that drug, going forward. Connection here is that the content capabilities of Pro-ficiency that support the performance of a clinical trial are also very leverageable in the support of the medical communications both pre and post-approval. Great. Let's move more to the financials of Pro-ficiency. So $100 million you paid for the acquisition. It did bring down margins both on the gross margin and on the adjusted EBITDA side. Maybe talk about the mix of their business and what your goals and targets are. Mm-hmm. For the margins. Yeah, the starting point, our legacy business, enjoys, Yeah, the tech investors will like this part of it. Talk about your legacy business. Yeah, you know, we operate in a model that is about 60/40. 60% to 65% of our revenue is software-driven, the balance 40%, consulting services driven. Typical software margins on that side of the business, 90%+. And the consulting business is as well a good margin business, 40% margins on the consulting side. It's not installation of the software. It's not modification of the software. It is basically our clients outsourcing to us the performance of what they could be doing with the software, but using our scientific personnel to do that type of work. So that 60/40 split on the revenue side and the margin profiles drives usually about a 70% margin overall for the business. On the gross margin side. On the gross margin side. A fall-through to the bottom line, adjusted EBITDA is the metric there. We have been performing at about 30%, 31%, 32% adjusted EBITDA. Our target there is more at the 35% level. We've had some challenges in terms of this is a rare commodity, the scientist. And, you know, 80% of our cost structure is people, and 75% of our people are scientists in this field. So a little bit of degradation there down to the high or low 30s, from the mid-30s, but that compensation, which happened post-COVID, is stabilized now. Yep. And we're improving. The Pro-ficiency acquisition, its starting point isn't bad, but it is a little bit different to that model. It's a split of business that's probably 55 in favor of consulting services, 45, in terms of software. But there are two business segments. The software is growing much more rapidly than the service side. So getting them to a 60/40 split, similar to the legacy business, I see as being a short range, 12-18 months, evolution. On the margin side, their service business is comparable in terms of their margin. On the software side, it's a little bit less, but improving dramatically as they move from a world of studios, actors, filming, film editing, these training modules to, not there yet, but almost 100% avatar, avatar and digitally rendered training modules, which decreases the cost by almost 80% in the long run. That evolution has already started well underway. And again, a 12-18-month sort of impact to get to where we, we wanna be. So if other customers might choose either do the services myself or use you guys, are there third parties that do it too? Is that what keeps the pricing up? 'Cause it sounds like you have the ability to raise prices if it's customer or to you. Yeah, it's a, you know, it's a market where we have pretty good annual price increases. It's a very sticky software environment, 95% renewal rates, consistently. So on the software side, there's always an annual price increase that sticks pretty well. Annual increase on the consulting side as well. Our clients are hiring the same people. They know what the cost of the scientists are and so have similar price capability there. The consulting is, you know, on face value, those that don't have scientists to do this work can't license the software and do it themselves. Our consulting group is there to perform this work for them. The reality, however, in terms of the adoption of modeling and simulation, most aggressively in large pharma who see the benefits and have built large modeling and simulation departments internally to whom we license our software, but they also don't staff up to 100% of their internal needs. And in fact, our consulting practice is about 50%, providing help to large pharma accounts as well. It's about 50/50 to those that aren't software customers that we're performing this on a sort of outsourced basis. Yes. You guys have been around for a while. I'm just kinda curious how you would talk about how, how the business changed over time, who those players were back then, who they are today. Yep. Yeah, they are, pretty similar in terms of who they are. Large, you know, most apples to oranges, although not completely competitor, would be Certara. And yet not apples to apples in the sense that, we both share and compete in that $4 billion biosimulation market. We've now added $4 billion in an adjacent market. They have $7 billion in adjacent markets as well that don't overlap. So they're a little bit larger primarily because of that, the additional TAM outside of biosimulation, regulatory writing and some other areas. So we compete with Certara on two of our three primary software platforms, GastroPlus. They have a product called Simcyp and our Monolix product. It's primary competition is a product called NONMEM from ICON plc. But Certara has a Phoenix software platform. I know it very well. It was the product of my first company in this space to whom I sold to the private equity roll-up that is today Certara. PK/PD modeling has two components: non-compartmental analysis, nonlinear mixed effects modeling. Our Monolix platform at Simulations Plus is primarily a nonlinear mixed effects modeling tool competing against NONMEM, which is the larger player in that market. In the NCA market, the Phoenix WinNonlin software is the larger player in that market, not as, you know, a more defensible position, not because it sourced in my first company, but because they're a software company and that company has evolved, they've kept it current over the years. NONMEM owned by a CRO has not had much further development in it since its introduction in the late 1990s. So Monolix competes a little bit on the NCA side, but its primary market is in nonlinear mixed effects modeling. On the consulting side, Certara and Simulations Plus are the two largest players in modeling and simulation consulting. They're, you know, we both have over 100 consulting scientists. There are a handful of 50-ish size consultants out there, and then a host of. It's the retirement direction, transition direction for any scientist in this field, leaving pharma, hang their shingle out, do some consulting in the later parts of their, of their career. Yeah. I'm wondering if this is relevant. Can you talk about the revenue drivers? Obviously, you've had a lot of inorganic growth recently in your acquisition spend. How do you balance out kind of growing the product via acquisition versus, you know, growth from, say, higher government spend, getting more reports from large private pharmas? Yeah, on the organic growth side, market growing 12% to 14%. This certainly has been a more challenging market the last couple, three years, sort of a post-COVID environment, in which biotech funding, the biotech side of our client base, has been slow on the uptick in terms of funding. That's improved a little bit at the beginning of the year, but still squishy, if that's a good term to use. The large pharma side, you know, has been very cost-constraint oriented. Macroeconomic issues, patent departures, the Pfizers of the world that, you know, post-COVID revenue streams are looking to tighten the belt. The market certainly hasn't grown. It's been one of those one- or two-year windows of time below that 12% to 14% industry growth. We believe that we should grow at or above industry growth on the organic side. The last two years, our guidance has been 10% to 15%. In our prior year, we came in at the end, at the lower end of that, that range. This year, we performed, and we're three quarters of the way through our year. We've performed at the high end of that, that range. Long-term, you know, I think, you know, we will, you know, see the market come back. It has over the 20 years that I've been in this industry. There's been ups and downs around that, that average. It'll come back and, and we will grow organically in that fashion. On the acquisition side, yeah, we've looked to supplement that 10% to 15% organic growth with acquisitions that take us to 20% or above. And a year later, when that acquisition falls into our organic growth, you know, one of the attractive characteristics that we seek and we found in Pro-ficiency was in their market, they're growing well above that 15% level. So as they fold into organic growth, that should give us some impetus to grow greater than 15% on the organic side as well. To follow up on that organic growth question, is it more a function of upsells, cross-sells, or new logos? And then as a follow-up to that question, the new logos, are those you're already in 18 to 20 large pharma. I'm assuming the new logos come downmarket, downstream. Yeah. Into the biotech, biopharma middle market. Yeah, our software installed base is 250 customers. Yeah, we have 18 of the top 20. And on the software side of our business, our typical quarter is about 80% of the revenue sourced in renewal and 10% in new logos, 10% in upsells. On the consulting side of the business, it's not a contractual recurring revenue business, but we have a portfolio of clients that we do work for each year. It's just on a project-by-project basis, as it rolls out. So that's a perfect answer. Any other questions from the audience? Yep. Why is this a sudden rush of sell-side coverage? It looks like there's been three or four people. Oh, really? That's funny. You know, this summer, what was driving them? I didn't get any prettier, so I can't attribute to that. No, I think there's a lot of focus on, you know, the industry and opportunity to improve drug development. It is an area where there is real impact in terms of technology, AI. So a little bit of AI focus, in this space, in reality, in this space, brings attention to it. Very unpenetrated, you know. I often get the question in terms of when's the inflection point? When's the app going to, you know, roll out to jillions of cell phones? It's not the nature of this business. It's not the nature of this industry. And so while we've been in this game for a while, the characteristic here is pretty consistent, steady growth, and the very profitable large pharma. High margin. Yeah. So, you know, our company went public way too early back in the mid-1990s. We did a capital raise in 2020, got some attention and a wave of analysts at that point in time. And I'd say today, yeah, another wave of analysts have seen the value of what we do, and potential. And in some ways, you know, I came on board six years ago, and one of my challenges was, you know, Shawn, how are you gonna leverage that? Because of its profitability and consistency, it's got a pretty good multiple already. Well, six years later, we've gone from $15 million in revenue to $65 million this year. We'll approach $100 million with the acquisition. Our profitability has kind of fluctuated between 30% adjusted EBITDA and 40%, and yet our multiple is still about, has come down a bit. And so I think it's now a more affordable buy, and yet still justifies a very nice multiple based upon its consistency and profitability. Thank you. I just as a follow-up, the new coverage, is it all from healthcare IT analysts? Is it from life science tool? Like who's, what sectors are, what analyst sectors are picking it up? Yeah, you know, we've always, you know, been in between the software, technology side versus the healthcare side. Healthcare side tends to understand our business a little bit more quickly. Yeah. Yeah. As their clients are often investors in biotech and pharma, the play has been, if you like that, it's that space rather than having to pick the successful drug. Right. Company. Just pick the software. Pick the software because if you think the, if you're robust on the industry. On the software technology side, I think there we sometimes fall prey to those that are looking for companies with inflection points that are gonna jump. Yeah. I think there's a place for the software technology side of those good consistent growers at a profitable margin as well. Thank you so much, Shawn. Thanks, audience. Great questions.