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Total turnover: $94.8 million, up 11% year over year.
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Software revenue: $35.9 million, up 15% year over year.
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Services income: $58.9 million, up 9% year over year.
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Software bookings: $34.8 million, up 28% year over year.
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Adjusted EBITDA: $33.1 million, compared to $28.8 million last year.
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Adjusted EBITDA margin: 35%.
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Net loss: $1.4 million, compared to a net loss of $49 million last year.
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Adjusted Net Income: $20.3 million, compared to $17.1 million last year.
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Custom diluted EPS: $0.13, compared to $0.11 last year.
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Cash and cash equivalents: $233 million as of September 30, 2024.
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Outstanding loans: $296.1 million on the term loan.
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Revenue Guidance 2024: $380 million to $385 million, 7% to 9% growth.
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Adjusted EBITDA guidance for 2024: $120 million to $124 million.
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Adjusted EPS guidelines for 2024: $0.41 to $0.44 per share.
Release date: November 6, 2024
For the full earnings call transcript, please refer to the full earnings call transcript.
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Certara Inc (NASDAQ:CERT) reported an 11% year-over-year increase in third-quarter revenue to $94.8 million.
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The company achieved a 13% increase in total bookings, indicating strong demand for its services.
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Certara Inc (NASDAQ:CERT) successfully completed its acquisition of Chemaxon, expanding its biosimulation reach into the preclinical market.
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The launch of Certara Cloud has made access to software easier, reducing IT and security costs for customers.
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Certara Inc (NASDAQ:CERT) has posted a strong performance in software bookings, up 28% year-over-year.
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Certara Inc (NASDAQ:CERT) experienced an extended decision-making process with larger customers, impacting growth forecasts.
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The regulatory services market has been more challenging than expected, leading to a modest revision of the 2024 guidance.
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There is a difference in growth profiles between regulatory services and core biosimulation activities.
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Certara Inc (NASDAQ:CERT) has seen a further deterioration in regulatory services bookings, which has impacted fourth-quarter revenue assumptions.
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The company is cautious in forecasting growth in the second half of the year due to market dynamics and delays in customer decision-making.
Q: Can you elaborate on the current demand environment for biosimulation and how it relates to year-end budget activities and your go-to-market strategies? A: William Feehery, CEO: We normally see a budget flush from pharmaceutical customers in the fourth quarter, and we expect some of that this quarter, although the magnitude is difficult to predict. Our guidance is not dependent on it. Our increased investment in our commercial team is helping, and while the market is healthier than earlier this year, the change is modest. The demand for biosimulation is driven more by our investments and its unique value.
Q: How do Certara Cloud and commercial strategies impact customer interactions? Do you have contact with different buyers or do you find it easier to free up budgets? A: William Feehery, CEO: Launched earlier this year, Certara Cloud acts as the platform for all our products, reducing IT costs and simplifying marketing discussions. It helps with software bookings and makes it easier for customers to deploy our products, reducing IT audits and security costs. Growth is driven by our unique software and new features.
Q: Can you provide details on the revenue contribution and margin profile of the Chemaxon acquisition compared to Certara’s existing business? A: John Gallagher, CFO: Chemaxon is expected to contribute approximately $5 million in the fourth quarter, consistent with its annual revenue of $20 million. It is primarily a software company, with 90% software and 10% services. The margin profile is below Certara’s, but we expect it to be in line with Certara’s average by the end of 2025.
Q: What improvements have you seen among Tier 1 customers from Q2 to Q3? A: John Gallagher, CFO: We saw stability among Tier 1 customers moving from Q2 to Q3, with strong software performance at all levels. The services sector was busy in the second quarter, but there was improvement in the third quarter, especially in biosimulation services, although supervisory services saw some contraction.
Q: What is driving the demand for biosimulation compared to regulations, and how are you expanding biosimulation for large molecules? A: William Feehery, CEO: Demand is driven by continued investment in biosimulation, regulatory acceptance and cost-effectiveness compared to clinical trials. Our tools are suitable for both small and large molecules and reflect the research focus of the pharmaceutical industry. Regulatory acceptance and cost benefits of biosimulation are key drivers.
For the full earnings call transcript, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
