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Financial Data and Key Metrics Changes - Q3 2025 revenue was $104.6 million, reflecting a 10% year-over-year growth [4][14] - Adjusted EBITDA for Q3 was $35.2 million, with a margin of 34% [4][18] - Q3 bookings totaled $96.6 million, representing a 1% increase year-over-year [5][14] - The company narrowed its revenue guidance for 2025 to $415-$420 million, indicating 8%-9% growth compared to 2024 [5][20] Business Line Data and Key Metrics Changes - Software revenue reached $43.8 million, growing 22% year-over-year, with organic growth of 6% [10][15] - Service revenue was $60.8 million, up 3% year-over-year, driven by growth in QSP services [11][17] - Software bookings of $40.8 million increased 17%, while service bookings declined 9% [10][17] Market Data and Key Metrics Changes - Tier 1 services customers exhibited cautious spending behavior, impacting deal timelines [5][6] - The adoption of biosimulation solutions is increasing among large pharma customers, particularly in model-informed drug development [6][8] Company Strategy and Development Direction - The company is focused on investing in R&D and commercial teams, with R&D spending up 24% year-over-year [4][11] - Certara is expanding its software capabilities into discovery and preclinical phases, enhancing its product offerings [9][30] - The strategic review of the regulatory services business is nearing completion, with a definitive outcome expected by the end of 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in deal completion timelines, particularly in regulatory services, due to large pharma customers adjusting their R&D focus [6][12] - There are positive leading indicators for the biosimulation market, with expectations for continued growth in 2026 [6][20] - Management expressed cautious optimism regarding macroeconomic stability and its potential positive impact on customer spending [35][46] Other Important Information - The company completed the Chemaxon acquisition, which has contributed positively to revenue and is expected to reach corporate average margins by year-end [9][19] - The company has repurchased approximately $41 million of stock as part of a $100 million share repurchase program [19] Q&A Session Summary Question: What is the dynamic regarding tier one services revenue or bookings? - Management noted delays in decision-making among tier one customers, with expectations for some deals to close in Q4 and others pushed to 2026 [23][24] Question: Can you comment on the gross profit outperformance? - Management attributed gross margin improvement to productivity gains and a favorable mix shift towards software [25][26] Question: How is the growth of QSP expected to evolve? - The company aims to standardize QSP modeling through its new software platform, Certara IQ, which is expected to drive efficiency and financial benefits [27][30] Question: What is the outlook for tier two and tier three services? - Tier two and tier three services have shown good growth, partially offsetting the headwinds faced by tier one services [64][65] Question: How does the company view the impact of AI on its business? - Management sees AI as a significant opportunity, with increased willingness among customers to adopt AI-enabled products [41][42]

Third Quarter 2025 Financial Results November 6, 2025 Disclaimer Numerical figures in the presentation have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. In addition, unless otherwise indicated, references to the "Company," "Certara," "we," "us," and "our" refer to Certara, Inc. and its consolidated subsidiaries. Trademarks and Service Marks The Certara design logo, "Certara," and ou ...

Financial Performance - Revenues for Q3 2025 reached $104.6 million, a 10.5% increase from $94.8 million in Q3 2024[24] - Net income attributable to common stockholders for Q3 2025 was $1.5 million, compared to a net loss of $1.4 million in Q3 2024[24] - The company reported a comprehensive loss of $1.5 million for Q3 2025, compared to a comprehensive income of $1.9 million in Q3 2024[24] - Basic net income per share for Q3 2025 was $0.01, compared to a loss of $0.01 per share in Q3 2024[24] - Net income for the nine months ended September 30, 2025, was $4,300,000, a significant improvement from a net loss of $18,628,000 in the same period of 2024[29] - Total revenue for the nine months ended September 30, 2025, was $315,190,000, an increase from $284,787,000 for the same period in 2024[80] - Adjusted net income for the nine months ended September 30, 2025, was $56.05 million, up from $48.19 million in 2024[166] - Net income increased by $2.9 million to $1.5 million for the three months ended September 30, 2025, compared to a net loss of $1.4 million for the same period in 2024[202]. Assets and Liabilities - Total assets as of September 30, 2025, were $1.54 billion, a decrease from $1.58 billion as of December 31, 2024[21] - Total liabilities decreased to $471.0 million as of September 30, 2025, from $516.4 million as of December 31, 2024[21] - Cash and cash equivalents as of September 30, 2025, were $172.7 million, down from $179.2 million as of December 31, 2024[21] - The company’s total stockholders' equity as of September 30, 2025, was $1.06 billion, slightly up from $1.06 billion as of December 31, 2024[21] - Long-term debt as of September 30, 2025, was $293,541,000, down from $295,425,000 as of December 31, 2024[95] - Total liabilities were reported at $24,494,000, including contingent liabilities of $21,900,000 and interest rate swap liabilities of $2,594,000[50] Revenue Breakdown - Software revenues increased by $7.9 million, or 22%, to $43.8 million for the three months ended September 30, 2025, primarily driven by a business acquisition[191] - Services revenues increased by $1.9 million, or 3%, to $60.8 million for the three months ended September 30, 2025, attributed to growth in technology-enabled services[192] - Software revenues rose by $23.5 million, or 21%, to $136.9 million for the nine months ended September 30, 2025, primarily due to a business acquisition and strong demand from existing customers[204] - Services revenues increased by $6.9 million, or 4%, to $178.3 million for the nine months ended September 30, 2025, attributed to growth in technology-enabled services[205] Expenses - Operating expenses for Q3 2025 were $61.9 million, up from $55.0 million in Q3 2024, reflecting a 12.5% increase[24] - Sales and marketing expenses increased by $1.7 million, or 15%, to $13.0 million for the three months ended September 30, 2025, mainly due to headcount growth from acquisitions[194] - Research and development expenses increased by $2.0 million, or 24%, to $10.3 million for the three months ended September 30, 2025, driven by employee-related costs associated with software development investments[195] - General and administrative expenses increased by $2.6 million, or 12%, to $24.6 million for the three months ended September 30, 2025, primarily due to increased stock-based compensation costs[196] - Interest expense decreased by $0.2 million, or 3%, to $5.0 million for the three months ended September 30, 2025, primarily due to a decline in market interest rates[199] Shareholder Information - Common shares issued for employee share-based compensation totaled 1,459,757 shares, resulting in an increase of $15,000 in common stock[26] - The total number of common shares outstanding increased from 163,856,290 as of June 30, 2025, to 163,873,911 as of September 30, 2025[25] - The company repurchased 1,230,398 shares, resulting in a treasury stock amount of $(13,810,000) as of September 30, 2025[25] Strategic Initiatives - The company plans to continue investing in scientific talent, sales and marketing, and research and development to support growth[152] - AI and machine learning technologies are being integrated into the company's software and services to enhance drug development processes[144] - The company is undergoing a strategic review of its regulatory services business, which may lead to significant operational changes[157] Market and Economic Conditions - Competition in the biosimulation market is high, with key factors including model quality, regulatory acceptance, and integration capabilities[158] - Macroeconomic conditions, including inflation and interest rates, pose challenges to the business environment[159] Tax and Regulatory Environment - The global effective tax rate (ETR) for the three months ended September 30, 2025, was 671%, significantly higher than 17% for the same period in 2024[130] - The effective income tax rate for the nine months ended September 30, 2025, was 59%, compared to 4% for the same period in 2024, with tax expense increasing by $7.0 million[214] - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA) on its operations following significant changes to U.S. tax law[131] Cash Flow and Capital Management - Net cash provided by operating activities increased to $67,508,000, compared to $31,097,000 in the prior year, reflecting a growth of approximately 116%[29] - Cash flow from operations for the nine months ended September 30, 2025, was $67.5 million, up from $31.1 million for the same period in 2024[217] - Cash balances included $71.7 million held outside of the United States as of September 30, 2025, compared to $45.8 million as of December 31, 2024[219]

Revenue Performance - Total revenue for Q3 2025 was $104.6 million, a 10% increase year-over-year from $94.8 million in Q3 2024[6] - Software revenue reached $43.8 million, reflecting a 22% growth compared to $35.9 million in Q3 2024[6] - Services revenue was $60.8 million, showing a 3% increase from $58.9 million in Q3 2024[8] - Total revenue for the three months ended September 30, 2025, was $104,616,000, reflecting a 10% increase from $94,820,000 in the same period of 2024[47] - Total revenue for the nine months ended September 30, 2025, was $315,190,000, an increase of 11% from $284,787,000 in the same period of 2024[47] Profitability - Net income for Q3 2025 was $1.5 million, a significant turnaround from a net loss of $1.4 million in Q3 2024, representing a 211% improvement[14] - Net income attributable to common stockholders for Q3 2025 was $1.5 million, compared to a net loss of $1.4 million in Q3 2024[38] - For the three months ended September 30, 2025, the company reported a net income of $1,525,000 compared to a net loss of $1,371,000 for the same period in 2024[44] - Adjusted net income for the nine months ended September 30, 2025, was $56,050,000, compared to $48,193,000 for the same period in 2024, marking a 16.1% increase[45] - Diluted earnings per share for the three months ended September 30, 2025, was $0.01, compared to a loss of $0.01 in the same period of 2024[46] Adjusted Metrics - Adjusted EBITDA for Q3 2025 was $35.2 million, up 7% from $33.1 million in Q3 2024[13] - Adjusted EBITDA for the nine months ended September 30, 2025, was $102,026,000, an increase from $88,522,000 in the same period of 2024, representing a growth of 15.3%[44] Bookings - Total bookings for Q3 2025 were $96.6 million, a slight increase of 1% year-over-year[8] - Software bookings were $40.8 million, marking a 17% increase compared to $34.8 million in Q3 2024[9] - Services bookings decreased by 9% year-over-year to $55.8 million, influenced by softer trends among tier-one customers[10] Guidance and Expectations - Full year 2025 revenue guidance is updated to a range of $415 million to $420 million[18] - Adjusted diluted earnings per share for full year 2025 is expected to be in the range of $0.45 to $0.47[18] Cash and Expenses - Cash and cash equivalents at the end of Q3 2025 were $172.7 million, down from $179.2 million at the end of Q4 2024[40] - Total operating expenses for Q3 2025 were $61.9 million, an increase from $55.0 million in Q3 2024[38] - The company incurred $24.9 million in equity-based compensation expense for the nine months ended September 30, 2025[42] - The company incurred equity-based compensation expenses of $9,574,000 for the three months ended September 30, 2025, compared to $8,187,000 in the same period of 2024[45] Balance Sheet - Total liabilities decreased to $471.0 million as of September 30, 2025, from $516.4 million at the end of Q4 2024[40] - The company’s accumulated deficit as of September 30, 2025, was $(123.9) million, an improvement from $(128.3) million at the end of Q4 2024[40] - The company’s total stockholders' equity increased to $1,064.8 million as of September 30, 2025, from $1,058.7 million at the end of Q4 2024[40] Other Financial Metrics - The company reported a net cash provided by operating activities of $67.5 million for the nine months ended September 30, 2025, compared to $31.1 million in 2024[42] - The change in fair value of contingent consideration for the nine months ended September 30, 2025, was $(3,212,000), compared to $8,092,000 in the same period of 2024[45] - The company reported a currency loss of $534,000 for the three months ended September 30, 2025, compared to a gain of $1,546,000 in the same period of 2024[45]

Core Insights - Certara, Inc. reported a total revenue of $104.6 million for Q3 2025, reflecting a year-over-year growth of 10% [4][8] - The company has raised its profitability targets for 2025 and narrowed its revenue guidance to a range of $415 million to $420 million [3][15] - The CEO emphasized the launch of new software products, particularly CertaraIQ for QSP modeling, aimed at enhancing biosimulation technology in drug development [3] Financial Performance - Total revenue for Q3 2025 was $104.6 million, with software revenue at $43.8 million (22% growth) and services revenue at $60.8 million (3% growth) [4][5][8] - Total bookings reached $96.6 million, a 1% increase year-over-year, with software bookings growing by 17% [6][8] - Net income for Q3 2025 was $1.5 million, a significant improvement from a net loss of $1.4 million in Q3 2024, marking a 211% increase [12][8] Cost and Expenses - Total operating expenses for Q3 2025 were $61.9 million, up from $55.0 million in Q3 2024, primarily due to increased employee-related costs and stock-based compensation [10][8] - The cost of revenues was $39.7 million, an increase from $37.2 million in the same quarter last year [7][8] Adjusted Metrics - Adjusted EBITDA for Q3 2025 was $35.2 million, a 7% increase from $33.1 million in Q3 2024 [11][8] - Adjusted net income for Q3 2025 was $22.2 million, compared to $20.3 million in Q3 2024 [13][8] - Adjusted diluted earnings per share for Q3 2025 was $0.14, slightly up from $0.13 in Q3 2024 [13][8] Guidance and Outlook - The company expects full-year adjusted EBITDA margin to be approximately 32% and adjusted diluted earnings per share in the range of $0.45 to $0.47 [15] - Certara aims to continue investing in R&D and commercial efforts to ensure sustainable long-term growth [3]

Core Insights - Certara, Inc. has launched TFL Studio, a cloud-native module of its Phoenix Cloud solution, which enables the creation of Tables, Figures, and Listings (TFLs) 50% faster, enhancing collaboration among pharmacokinetic (PK) and pharmacodynamic (PD) scientists [1][3][4] Group 1: Product Features and Benefits - TFL Studio allows scientists to create high-quality TFLs in a user-friendly, no-code environment, significantly reducing the technical complexities involved in data handling and formatting [3][5] - The module integrates with Integral™, Certara's data repository, providing a unified source for PK/PD data, models, and visualizations [3] - A complementary module, AI PK Reports, will be released soon, utilizing GenAI to expedite the generation of draft PK reports from TFLs, reducing the time from days to minutes [3] Group 2: Market Position and Strategy - The introduction of TFL Studio is a strategic move to enhance drug discovery and development processes by leveraging AI and cloud technology, addressing inefficiencies in traditional TFL workflows [2][3] - Certara serves over 2,400 clients, including biopharmaceutical companies and regulatory agencies across 70 countries, indicating a strong market presence and demand for its innovative solutions [5]

Core Insights - Certara, Inc. has launched Certara IQ, an AI-powered Quantitative Systems Pharmacology (QSP) solution aimed at enhancing R&D productivity and reducing risks in drug development [1][3] Company Overview - Certara is a leader in model-informed drug development, providing proprietary biosimulation software and services to over 2,400 clients, including biopharmaceutical companies and regulatory agencies across 70 countries [4] Industry Trends - QSP has become essential in modern drug discovery, with FDA submissions based on QSP nearly doubling every 1.4 years since 2013, indicating a growing reliance on computational modeling in drug development [2] Product Features - Certara IQ enhances model reproducibility and reusability through an intuitive, generative-AI supported interface for building and visualizing QSP models [5] - The solution accelerates model creation with a repository of scientifically validated and pre-built QSP models, workflows, and report templates [5] - Certara IQ features a high-performance simulation engine that significantly reduces computational bottlenecks, running simulations thousands of times faster than traditional tools [5] - It empowers decision-making with a no-code interface for "what-if" analysis, allowing for quick assessments of feasibility, data gaps, and optimization of dosing and drug properties [5]

Core Insights - Certara, Inc. has published over 200 papers in the past year and has 11 scientists listed among the top 2% most cited researchers globally according to the 2025 Stanford/Elsevier ranking, highlighting its significant impact in pharmaceutical research [1][2][3] Company Achievements - The company has maintained its leadership in pharmacology and pharmacokinetics, with its scientists recognized for their contributions either in the calendar year 2024 or throughout their careers [3] - Amin Rostami-Hodjegan, a key figure at Certara, received the 2025 Lewis B. Sheiner Lecturer Award for his lifetime achievements in pharmacometric research [4] Technological Innovations - The Simcyp Simulator®, co-founded by Rostami-Hodjegan, is utilized by over 11 global regulatory agencies and has supported more than 120 FDA-approved drugs, demonstrating its effectiveness in drug development [4] - The Simcyp Consortium, consisting of 35 leading biopharmaceutical companies, is recognized as a global authority on mechanistic PBPK modeling and simulation [4] Industry Trends - New methodologies like the Simcyp Simulator are crucial as the biopharma industry shifts away from animal testing, a transition supported by the FDA and NIH [5] - Certara has been at the forefront of reducing animal use in pre-clinical research for the past 25 years, aligning with industry trends towards more ethical research practices [5]

Core Viewpoint - Cerrado Gold Inc. reported a 21% increase in gold equivalent ounce (GEO) production for Q3 2025 compared to the previous quarter, driven by enhanced operations at the Calandrias Sur heap leach site and ongoing underground development at the Minera Don Nicolas Mine [3][9]. Q3 Operating Highlights - Q3 2025 production reached 13,868 GEO, up from 11,437 GEO in Q2 2025, marking a 21% increase [9]. - Heap leach production grew by 33% to a record 10,465 GEO due to expanded crushing capacity and improved recoveries [9]. - The completion of the second phase of the crushing expansion led to improved tonnage and recoveries [3]. - The underground development is progressing, with three access portals developed, expected to reach production stopes in Q4 2025 [5][9]. - The company revised its 2025 production guidance from 55,000-60,000 GEO to 50,000-55,000 GEO due to delays in underground development [6][8]. Exploration and Development Updates - The exploration program at Minera Don Nicolas is expanding, with an additional 50,000 meters planned for 2026, supplementing the existing 20,000 meters for 2025 [8][12]. - Promising results have been observed in the central Paloma area, indicating potential resource expansion [12]. - Development activities are ongoing at the Lagoa Salgada and Mont Sorcier projects, with feasibility studies targeted for completion in Q4 2025 and Q2 2026, respectively [14][15]. Corporate Activities - Joao Barros has been appointed as President, Europe, and Carl Calandra as Corporate Secretary [20]. - The company engaged Hybrid Financial Ltd. for strategic marketing and investor relations services to enhance its investor profile [21]. - Cerrado issued 200,000 deferred share units and 20,000 restricted share units under its incentive plan [22]. Financial Performance - The average realized price per gold ounce sold increased to $3,153 in Q3 2025 [18]. - The company continues to optimize operations at its Minera Don Nicolas and Las Calandrias projects, aiming to maximize asset value [24][25].