Certara Inc (CERT) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

In This Article:

  • Total Revenue: $94.8 million, up 11% year-over-year.

  • Software Revenue: $35.9 million, increased 15% year-over-year.

  • Services Revenue: $58.9 million, up 9% year-over-year.

  • Software Bookings: $34.8 million, increased 28% year-over-year.

  • Adjusted EBITDA: $33.1 million, up from $28.8 million in the prior year.

  • Adjusted EBITDA Margin: 35%.

  • Net Loss: $1.4 million, compared to a net loss of $49 million in the prior year.

  • Adjusted Net Income: $20.3 million, compared to $17.1 million in the prior year.

  • Adjusted Diluted EPS: $0.13, compared to $0.11 in the prior year.

  • Cash and Cash Equivalents: $233 million as of September 30, 2024.

  • Outstanding Borrowings: $296.1 million on the term loan.

  • 2024 Revenue Guidance: $380 million to $385 million, growth of 7% to 9%.

  • 2024 Adjusted EBITDA Guidance: $120 million to $124 million.

  • 2024 Adjusted EPS Guidance: $0.41 to $0.44 per share.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Certara Inc (NASDAQ:CERT) reported a 11% year-over-year increase in third-quarter revenue, reaching $94.8 million.

  • The company achieved a 13% increase in total bookings, indicating strong demand for its services.

  • Certara Inc (NASDAQ:CERT) successfully closed the Chemaxon acquisition, expanding its biosimulation reach into the pre-clinical market.

  • The launch of Certara Cloud has provided easier access to software, reducing IT and security costs for customers.

  • Certara Inc (NASDAQ:CERT) has seen strong performance in software bookings, with a 28% increase from the prior year period.

Negative Points

  • Certara Inc (NASDAQ:CERT) experienced a lengthened decision-making process among larger customers, impacting growth predictions.

  • The regulatory services market has been more challenging than expected, leading to a modest revision of 2024 guidance.

  • There is a divergence in growth profiles between the regulatory services and core biosimulation businesses.

  • Certara Inc (NASDAQ:CERT) has seen further deterioration in regulatory services bookings, affecting revenue assumptions for the fourth quarter.

  • The company is cautious about predicting second-half growth due to market dynamics and customer decision delays.

Q & A Highlights

Q: Can you elaborate on the current demand environment for biosimulation and how it intersects with end-of-year budget activities and your go-to-market strategies? A: William Feehery, CEO: We typically see a budget flush from pharmaceutical customers in Q4, and we expect some of that this quarter, though it's hard to predict the extent. Our guidance doesn't rely 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.

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