Simulations Plus, Inc.SLP
Simulations Plus, Inc. Stock Compensation Disclosure
STOCK OWNERSHIP PLANS
The following table summarizes information about stock options:
| (in thousands, except per share and weighted-average amounts) | ||||||||||||||||||||
| Activity for the year ended August 31, 2025 | Number of Options | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life | |||||||||||||||||
| Outstanding, August 31, 2024 | 1,906 | $ | 37.64 | 6.91 years | ||||||||||||||||
| Granted | 393 | 32.01 | ||||||||||||||||||
| Exercised | (85) | 13.21 | ||||||||||||||||||
| Canceled/Forfeited | (290) | 41.58 | ||||||||||||||||||
| Outstanding, August 31, 2025 | 1,924 | $ | 36.98 | 6.52 years | ||||||||||||||||
| Vested and Exercisable, August 31, 2025 | 961 | $ | 35.51 | 4.84 years | ||||||||||||||||
| Vested and Expected to Vest, August 31, 2025 | 1,852 | $ | 37.04 | 6.43 years | ||||||||||||||||
| (in thousands, except per share and weighted-average amounts) | ||||||||||||||
| Activity for the year ended August 31, 2024 | Number of Options | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life | |||||||||||
| Outstanding, August 31, 2023 | 1,478 | $ | 34.62 | 6.62 years | ||||||||||
| Granted | 594 | 40.76 | ||||||||||||
| Exercised | (114) | 12.40 | ||||||||||||
| Canceled/Forfeited | (52) | 42.95 | ||||||||||||
| Outstanding, August 31, 2024 | 1,906 | $ | 37.64 | 6.91 years | ||||||||||
| Vested and Exercisable, August 31, 2024 | 822 | $ | 31.19 | 4.82 years | ||||||||||
| Vested and Expected to Vest, August 31, 2024 | 1,843 | $ | 37.53 | 6.83 years | ||||||||||
| (in thousands, except per share and weighted-average amounts) | ||||||||||||||
| Activity for the year ended August 31, 2023 | Number of Options | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life | |||||||||||
| Outstanding, August 31, 2022 | 1,245 | $ | 28.61 | 6.14 years | ||||||||||
| Granted | 465 | 43.78 | ||||||||||||
| Exercised | (170) | 12.59 | ||||||||||||
| Canceled/Forfeited | (62) | 43.14 | ||||||||||||
| Outstanding, August 31, 2023 | 1,478 | $ | 34.62 | 6.62 years | ||||||||||
| Vested and Exercisable, August 31, 2023 | 696 | $ | 24.26 | 4.54 years | ||||||||||
| Vested and Expected to Vest, August 31, 2023 | 1,471 | $ | 34.56 | 6.61 years | ||||||||||
The total grant-date fair value of nonvested stock options as of August 31, 2025, was $18.0 million and is amortizable over a weighted-average period of 2.9 years.
The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-valuation model was developed for use in estimating the fair value of stock options, which do not have vesting restrictions and are fully transferable. In addition, option-valuation models require the input of highly subjective assumptions, including the expected stock price volatility.
The following table summarizes the fair value of the options, including both ISOs and NQSOs, granted during the years ended August 31, 2025, 2024, and 2023:
| (in thousands, except weighted-average amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Estimated fair value of awards granted | $ | 6,597 | $ | 11,902 | $ | 10,067 | ||||||||||||||
| Unvested forfeiture rate | 6.29 | % | 5.53 | % | 0.22 | % | ||||||||||||||
| Weighted-average grant price | $ | 32.01 | $ | 40.76 | $ | 43.78 | ||||||||||||||
| Weighted-average market price | $ | 32.01 | $ | 40.76 | $ | 43.78 | ||||||||||||||
| Weighted-average volatility | 47.03 | % | 44.63 | % | 46.14 | % | ||||||||||||||
| Weighted-average risk-free rate | 3.95 | % | 4.77 | % | 4.29 | % | ||||||||||||||
| Weighted-average dividend yield | 0.00 | % | 0.59 | % | 0.55 | % | ||||||||||||||
| Weighted-average expected life | 6.61 years | 6.59 years | 6.55 years | |||||||||||||||||
The exercise prices for the options outstanding as of August 31, 2025, ranged from $6.85 to $66.14 per share, and the information relating to these options is as follows:
(in thousands except prices and weighted-average amounts)
| Exercise Price Per Share | Awards Outstanding | Awards Exercisable | ||||||||||||||||||||||||||||||||||||||||||
| Low | High | Quantity | Weighted -Average Remaining Contractual Life | Weighted-Average Exercise Price | Quantity | Weighted-Average Remaining Contractual Life | Weighted-Average Exercise Price | |||||||||||||||||||||||||||||||||||||
| $ | 6.85 | $ | 9.77 | 90 | 0.49 years | $ | 9.71 | 90 | 0.49 years | $ | 9.71 | |||||||||||||||||||||||||||||||||
| $ | 9.78 | $ | 18.76 | 138 | 2.57 years | $ | 11.00 | 120 | 1.48 years | $ | 10.08 | |||||||||||||||||||||||||||||||||
| $ | 18.77 | $ | 33.40 | 467 | 7.54 years | $ | 30.69 | 137 | 3.65 years | $ | 26.00 | |||||||||||||||||||||||||||||||||
| $ | 33.41 | $ | 47.63 | 985 | 7.34 years | $ | 41.36 | 413 | 6.85 years | $ | 41.32 | |||||||||||||||||||||||||||||||||
| $ | 47.64 | $ | 66.14 | 244 | 5.69 years | $ | 56.04 | 201 | 5.50 years | $ | 56.85 | |||||||||||||||||||||||||||||||||
| 1,924 | 6.52 years | $ | 36.98 | 961 | 4.84 years | $ | 35.51 | |||||||||||||||||||||||||||||||||||||
During the years ended August 31, 2025, 2024, and 2023 we issued 23,195, 15,200, and 13,765 shares of stock valued at $0.5 million, $0.6 million, and $0.6 million respectively, to our nonmanagement directors as compensation for board-related duties.
Share Repurchases
No share repurchases were made during the fiscal years ended August 31, 2025 and 2024.
On December 29, 2022, our Board of Directors authorized and approved a share repurchase program for up to $50 million of the outstanding shares of our common stock, and on January 11, 2023, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase an aggregate of $20 million of our outstanding shares of common stock as part of the share repurchase program, which was settled in full in May 2023. The share repurchase program has no expiration date but may be terminated at any time at our Board of Directors’ discretion.
In January 2023, we received an initial delivery of an aggregate of 408,685 shares of our common stock from Morgan Stanley pursuant to the ASR Agreement, in exchange for which we made an initial payment of $20 million to Morgan Stanley. These 408,685 shares were retired and are treated as authorized, unissued shares. At final settlement on May 20, 2023, based on the volume-weighted average price of our common stock during the term of the ASR Agreement, Morgan Stanley delivered an additional 83,356 shares of Company common stock to us, which shares were also retired and treated as authorized, unissued shares.
After completion of the repurchases under the ASR Agreement, $30 million remains available for additional repurchases under our authorized repurchase program.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.