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Simulations Plus, Inc. Message Board

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  • garmingchan garmingchan Apr 4, 2008 12:54 AM Flag

    Unit Cost

    I suppose my question is, "how much does a license add to quarterly/annual revenue?"

    g

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    • You would be right to assume that it is negotiable on a case by case basis. If a customer approaches me with 80,000 employees & potential users of a product(PFE), I'm gonna give them a much better price than some small fry like Lotus Pharmaceuticals with 286 employees.(I'm not trying to insinuate these are both customers-I just pulled the top and bottom players off Mkt Cap list).
      The beauty with software is you're selling a product that has all the fixed costs already spent & the variable costs are nearly non-existent. Of course you want to keep improving your product before someone else does...But if the market suddenly evaporates, you're not stuck with all this overhead wondering what to do. This is why there is miniscule risk, but heavy reward on buying this stock.
      Cash flow is the key here, you know it's real when the cash keeps rolling in. I've invested in plenty of small companies that were cooking their books & claiming made up revenue...But when cash keeps growing without any debt, you know it's for real.
      You'll just have to wait for next results to see any impact from these orders, SLP has confidentiality agreements with most of their customers to keep private how much they're spending. I'm not sure why they bothered to make a press release for this, there's not really any new information here. I guess they're worried about the inexpicably declining stock price and giving some reassurance. More reassuring to me would be some insider open-market purchases.

 
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