Core Insights - Certara, Inc. reported strong financial results for Q2 2025, with total revenue of $104.6 million, reflecting a year-over-year growth of 12% on a reported basis and 10% on a constant currency basis [4][8] - The company continues to see significant interest in model-informed drug development, with expectations for sustainable long-term growth driven by software enhancements and new product introductions [3][4] - Certara's adjusted EBITDA for Q2 2025 was $31.9 million, an increase of 21% compared to the same period in 2024, indicating improved operational efficiency [9][11] Financial Performance - Total revenue for Q2 2025 was $104.6 million, up from $93.3 million in Q2 2024, marking a 12% increase [4][8] - Software revenue reached $46.7 million, a 22% increase year-over-year, while services revenue was $57.9 million, growing by 5% [5][8] - Total bookings for Q2 2025 were $112.0 million, representing a 13% increase from the previous year, with software bookings at $46.6 million (11% growth) and services bookings at $65.4 million (15% growth) [6][7] Cost and Expenses - Total cost of revenues for Q2 2025 was $40.7 million, slightly up from $39.8 million in Q2 2024 [7][8] - Total operating expenses decreased to $54.3 million from $62.5 million in the same quarter last year, primarily due to a reduction in contingent consideration and transaction costs [8][10] - The net loss for Q2 2025 was $2.0 million, significantly improved from a net loss of $12.6 million in Q2 2024 [10][11] Outlook - Certara expects full-year 2025 revenue to be in the range of $415 million to $425 million, with an adjusted EBITDA margin of 30-32% and adjusted diluted earnings per share projected between $0.42 and $0.46 [15][13] - The company is confident in its full-year plan, supported by growing commercial momentum and sustained demand for its solutions [3][4]

Core Insights - Certara, Inc. has received formal qualification from the European Medicines Agency (EMA) for its Simcyp® Simulator, marking it as the first company to achieve this for a PBPK modeling platform [1][2] - The qualification allows sponsors to use the Simcyp Simulator in regulatory submissions across the EU to assess drug-drug interaction (DDI) risk, streamlining the drug submission process [2][3] - The recognition reflects Certara's scientific leadership and innovation in biosimulation, which is increasingly prioritized in drug development [3] Company Overview - Certara accelerates medicine development through biosimulation software and services, serving over 2,400 clients including biopharmaceutical companies and regulatory agencies in 70 countries [4]

Core Insights - Certara, Inc. has appointed Christopher Bouton, Ph.D., as Chief Technology Officer to lead the development of a next-generation integrated model-informed drug development platform utilizing generative AI and advancements in biosimulation technology [1][4] Company Overview - Certara is a global leader in model-informed drug development, providing biosimulation software, technology, and services to enhance traditional drug discovery and development processes [5] - The company serves over 2,400 clients, including biopharmaceutical companies, academic institutions, and regulatory agencies across 70 countries [5] Leadership and Innovation - Dr. Bouton, previously the founder and CEO of Vyasa Analytics, has a strong background in AI and drug development, having led the creation of several AI-based products at Certara [2][3] - His leadership is expected to enhance the adoption of AI-powered biosimulation and virtual trials, improving the efficiency of bringing new medicines to market [3][5] Technological Advancements - The integration of biosimulation with generative AI and machine learning is transforming the drug discovery and development landscape, leading to faster timelines, reduced costs, and improved success rates [5]

Core Viewpoint - The market anticipates Certara, Inc. (CERT) to report a year-over-year earnings increase driven by higher revenues when it releases its quarterly results for June 2025 [1] Earnings Expectations - Certara is expected to post quarterly earnings of $0.10 per share, reflecting a year-over-year increase of +42.9% [3] - Revenues are projected to reach $103.56 million, which is an 11% increase from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate for Certara has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] - The Most Accurate Estimate for Certara is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.44%, suggesting a bullish outlook from analysts [12] Earnings Surprise History - In the last reported quarter, Certara exceeded the expected earnings of $0.13 per share by delivering $0.14, resulting in a surprise of +7.69% [13] - Over the past four quarters, Certara has beaten consensus EPS estimates three times [14] Industry Context - Enanta Pharmaceuticals (ENTA), another player in the Zacks Medical - Biomedical and Genetics industry, is expected to report a loss of $1.25 per share for the same quarter, indicating a year-over-year decline of -16.8% [18] - Enanta's revenues are anticipated to be $15.1 million, down 16% from the previous year [19] - Despite a significant downward revision of 28.9% in the consensus EPS estimate for Enanta over the last 30 days, it currently has an Earnings ESP of +2.4% [19]

Core Insights - Certara, Inc. is positioned to potentially continue its earnings-beat streak in the upcoming report, having surpassed earnings estimates by an average of 11.54% in the last two quarters [1][2]. Earnings Performance - In the last reported quarter, Certara achieved earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, resulting in a surprise of 7.69% [2]. - In the previous quarter, the company was expected to post earnings of $0.13 per share but delivered $0.15 per share, leading to a surprise of 15.38% [2]. Earnings Estimates and Predictions - Recent estimates for Certara have been trending upward, with a positive Earnings ESP of +2.44%, indicating increased analyst optimism regarding the company's earnings prospects [5][8]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that stocks with this combination beat estimates nearly 70% of the time [6][8]. Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may be more accurate [7]. - A negative Earnings ESP can reduce the predictive power of the metric, but it does not necessarily indicate an earnings miss [9]. Importance of Earnings ESP - Many companies beat consensus EPS estimates, but this is not the sole reason for share price gains; thus, checking a company's Earnings ESP before quarterly releases is crucial for investment decisions [10].

Group 1 - The high cost of drug development, estimated at $1 billion from preclinical research to commercialization, remains a significant burden in the life sciences industry [1] - Model-Informed Drug Development (MIDD) is identified as a potential solution to reduce drug development costs [1] - The company ELAM1 provides financial professionals and investors with the necessary scientific and clinical expertise to navigate the complexities of the healthcare sector [1] Group 2 - ELAM1 aims to bridge the gap between advanced scientific research and financial strategy, helping clients uncover hidden value and assess risks more accurately [1]

Core Viewpoint - Certara, Inc. will release its financial results for Q2 2025 on August 6, 2025, after market close, followed by a conference call at 5:00 PM ET to discuss the results [1]. Company Overview - Certara is a global leader in model-informed drug development, utilizing biosimulation software, technology, and services to enhance traditional drug discovery and development [3]. - The company serves over 2,400 clients, including biopharmaceutical companies, academic institutions, and regulatory agencies across 70 countries [3]. Investor Information - Investors interested in the conference call must register online, with a recommendation to do so at least one day in advance [1]. - A live and archived webcast of the conference call will be available on the "Investors" section of Certara's website [2]. Contact Information - Investor Relations contact is David Deuchler from Gilmartin Group [4]. - Media contact is Alyssa Horowitz [4].

Group 1: Collaboration and Expansion - Certara has announced a new collaboration with Merck to expand the use of the Certara Pinnacle 21 software platform, which now includes a metadata repository and data standards workflow management [1][3] - This agreement builds upon an existing technology collaboration aimed at aiding Merck in regulatory submissions [1] Group 2: Data Management Challenges - The complexity of reducing the time from data collection to validated, analysis-ready datasets has increased, with Phase III clinical trials now averaging 3.6 million datapoints, a threefold increase over the last decade [2] - The Certara Pinnacle 21 platform is designed to address the data standardization challenges associated with modern digital trials at scale [2] Group 3: Company Overview - Certara accelerates medicine development using biosimulation software, technology, and services, serving over 2,400 biopharmaceutical companies, academic institutions, and regulatory agencies across 66 countries [4]

Core Viewpoint - The healthcare sector is highlighted as a critical area in the stock market, driven by the need for innovative therapies and medical technologies to address an aging population and rising chronic diseases. There are ten under-the-radar healthcare stocks identified as potential investment opportunities. Group 1: Company Highlights - **Certara**: Positioned to benefit from AI-driven transformations in medicine, providing bio-simulation software that accelerates drug development, with over 90% of novel drugs approved by the FDA since 2014 utilizing its technology [3][4]. - **Beam Therapeutics**: A clinical-stage biotech focusing on precision gene editing therapies for genetic diseases, with its lead candidate in phase 1/2 trials for sickle cell disease, showing promise for long-term growth [5][6]. - **Inspire Medical Systems**: Develops implantable devices for obstructive sleep apnea, reporting a 23% year-over-year revenue increase to $201 million, indicating strong market demand [8]. - **Insulet**: Specializes in tubeless insulin pump technology, targeting a revenue growth of 19% to 22% by 2025, with significant expansion opportunities in international markets [9]. - **Krystal Biotech**: Focuses on rare skin diseases, with its gene therapy expected to generate approximately $400 million in revenue this year, reinforcing its market position [10]. - **LifeMD**: Operates a telehealth platform with a 49% year-over-year revenue increase, driven by a partnership with Novo Nordisk, indicating potential for further growth [11]. - **Option Care Health**: Leading provider of home infusion services, positioned to benefit from the shift towards personalized healthcare [12]. - **Tempus AI**: Utilizes AI for precision medicine, projecting over 80% revenue growth this year to about $1.3 billion, highlighting its expansive data ecosystem [13]. - **TransMedics Group**: Innovates in organ transplantation with its FDA-approved Organ Care System, projecting a 30% revenue growth this year [14][15]. - **Veeva Systems**: Offers cloud-based software for life sciences, serving over 1,000 customers and positioned to capitalize on the industry's digital transformation [16].

Certara's Business and Market Position - Certara is a leader in biosimulation, using AI-enabled platforms, data, and scientific expertise to transform drug development and accelerate new medicines to patients[16, 76] - The company serves over 2,400 customers across 70 countries, including 30 of the top 30 biopharma companies[16] - Over 90% of novel drugs approved by the US FDA since 2014 were supported by Certara solutions[16] - The in silico drug development total addressable market (TAM) is $4.1 billion, representing 1.5% of the total R&D industry spend[27] Financial Performance and Growth - Certara's adjusted EBITDA margin in FY 2024 was 32%[17] - Software growth in FY 2024 was 18%[17] - The company's revenue mix is shifting towards software, with software accounting for 42% of revenue in 2024 (including pro-forma Chemaxon revenue of $22.9 million), a 1300 basis point shift since 2021[69, 70] - Certara is investing in its software business to drive sustainable growth, with continued R&D investment to support software innovation and AI integration[71, 74] Biosimulation and its Impact - Biosimulation can save approximately 10 months and $5 million per program[21] - Over 120 novel drugs and 325 label claims were approved by global regulators using Certara technology in lieu of clinical studies[17] - A 3% increase in process efficiency through biosimulation could potentially save approximately $300 million per drug[14]