Substantial leverage remains possible if the company can acquire complementary products and feed them into its existing customer base. Simulations Plus is exploring acquisitions, although at this stage the best fits appear to be larger organizations that might view the company itself as an appealing target. Simulations Plus also plans to begin doing some original research, using its own tools to identify promising drug candidates. That project isn't likely to yield actual products necessarily, but it should provide case studies that existing and prospective customers can refer to. The non core text to speech line remains in a sideways pattern and isn't contributing materially to profitability. Overall margins promise to keep rising as the pharmaceutical software segment continues to expand its share of total revenue. Comparisons will be impacted a little by the absence of U.S. Government grants that pumped up prior year results. For now we are maintaining our full year (August) estimates. A somewhat stronger performance is possible.
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