The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gains into earnings over the next twelve months is $5,041. The Company's revenue consists of fees for perpetual and term licenses for its software products, post-contract customer support (referred to as maintenance), software as a service ("SaaS"), and professional services including training and other revenue. Revenue is recognized upon ...

Certara Reports First Quarter 2024 Financial Results Reiterates Full Year 2024 Financial Guidance First Quarter Highlights: • Services revenue was $57.3 million, flat compared to $57.3 million in the first quarter of 2023. • Adjusted EBITDA was $29.1 million, compared to $32.3 million in the first quarter of 2023. "We began 2024 with strong financial performance in software, driven by an impressive Net Retention Ratio of 114%, while our services business performed in line with our expectations. As we work t ...

PRINCETON, N.J., April 16, 2024 (GLOBE NEWSWIRE) -- Certara, Inc. (NASDAQ:CERT), a global leader in model-informed drug development, today announced the launch of Certara Cloud, the unifying platform that integrates its many scientific software solutions. Customers log into Certara Cloud using a single ID to access and manage their licensed software, linking predictive solutions to modeling and analysis of clinical trial results. "This reusable suite of shared platform services enables us to both integrate ...

PRINCETON, N.J., April 09, 2024 (GLOBE NEWSWIRE) -- Certara, Inc. (NASDAQ:CERT), a global leader in biosimulation, today announced that it will release financial results for the first quarter of 2024 after the market close on Tuesday, May 7th, 2024. Company management will host a conference call to discuss financial results at 5:00PM ET. Investors interested in listening to the conference call are required to register online. It is recommended to register at least one day in advance. Certara also announced ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2023 was $88 million, representing a year-over-year growth of 2% on a reported basis and 1% on a constant currency basis [13] - For the full year 2023, total revenue was $354.3 million, which represents a 6% growth on a reported basis and on a constant currency basis [13] - Bookings for the trailing 12-month period ended December 31, 2023, were $402.3 million, down 2% year-over-year [14] - Adjusted EBITDA margin was 33.6% for Q4 2023 and 34.7% for the full year 2023 [36] Business Line Data and Key Metrics Changes - Software revenue in Q4 was $33.6 million, up 15% year-over-year, driven by biosimulation software and Pinnacle 21 [15] - For the full year, software revenue was $131.7 million, up 14% on a reported basis [15] - Services revenue in Q4 was $54.4 million, down 5% year-over-year, while for the full year, services revenue was $222.7 million, up 1% [22] Market Data and Key Metrics Changes - The customer base expanded to 2,395, with 389 customers having an annual contract value of more than $100,000, representing a 5% growth year-over-year [62] - The company saw a pickup in new business activity across its technology-enabled services group, leading to sequential bookings growth in Q4 [8] Company Strategy and Development Direction - The company plans to invest in new models for biosimulation, new products, and additional integration of AI across its platform [7] - A focus on expanding the software capabilities, particularly in clinical data strategy, is emphasized, with the acquisition of Formedix to enhance clinical trial data management [45] - The company aims to broaden its offerings to support additional use cases in therapeutic areas as biosimulation becomes more widespread [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities in biosimulation as drug developers seek to maximize capital efficiencies and reduce pipeline risk [11] - The company anticipates total revenue in the range of $385 million to $400 million for 2024, representing growth of 9% to 13% compared to 2023 [38] - Management noted that while the biotech market is stabilizing, they have not yet seen significant improvements in bookings but expect a healthier market segment in the second half of 2024 [94] Other Important Information - The company ended Q4 2023 with $235 million in cash and cash equivalents and $288.2 million in outstanding borrowings on its term loan [37] - The net retention rate for software was 109% for both Q4 and the full year 2023, consistent with the company's long-term growth algorithm [20] Q&A Session Summary Question: What helped the bookings to pick up in Q4? - Management highlighted investments in training the sales force and uniting the sales approach to offer clients a full suite of products [43] Question: How does the company expect to generate growth from a trailing bookings number that did not grow? - Management indicated confidence in organic growth driven by new products and improved execution in the services business [89] Question: Can you provide insights on the performance of regulatory services within the broader services bucket? - Regulatory services represented 19% of total revenue in Q4, and the company anticipates this segment returning to growth over the coming quarters [130] Question: What is the outlook for the biotech market and its impact on guidance? - Management noted stability in the biotech market and built guidance around this stability, expecting potential recovery in the second half of 2024 [137]

Certara, Inc. (CERT) came out with quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.11 per share. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -18.18%. A quarter ago, it was expected that this company would post earnings of $0.11 per share when it actually produced earnings of $0.11, delivering no surprise.Over the last four quarters, the company has not be ...

PRINCETON, N.J., Feb. 29, 2024 (GLOBE NEWSWIRE) -- Certara, Inc. (NASDAQ:CERT), a global leader in biosimulation, today reported its financial results for the fourth quarter of fiscal year 2023. Fourth Quarter Highlights: Revenue was $88.0 million, compared to $86.6 million in the fourth quarter of 2022, representing growth of 2% over the fourth quarter of 2022.Strong sequential growth with record software bookings and broad-based recovery in technology enabled services bookings during the quarter.Net loss ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Certara provides biosimulation technology and solutions for Model-Informed Drug Development (MIDD) to enhance drug development success and reduce costs [Our Company and Solutions](index=8&type=section&id=Our%20Company%20and%20Solutions) Certara offers biosimulation software like Simcyp and Phoenix, integrates AI, and provides technology-enabled services for drug development - Certara is a leading provider of biosimulation technology and solutions for **Model-Informed Drug Development (MIDD)**, aiming to increase success rates and decrease costs in biopharmaceutical R&D[37](index=37&type=chunk) - Since 2014, customers using Certara's solutions have received over **90% of all new drug approvals by the US FDA**, working with nearly **2,400 life sciences companies** and academic institutions[52](index=52&type=chunk) - Key software platforms include the **Simcyp Simulator** for mechanistic modeling, **Phoenix™ PK/PD suite** for empirical modeling, and **Pinnacle 21** for clinical data automation[50](index=50&type=chunk)[62](index=62&type=chunk)[65](index=65&type=chunk) - The company has incorporated **AI and machine learning**, including the launch of **Certara.AI** for deploying life science-specific Generative Pre-Trained Transformers (GPTs)[44](index=44&type=chunk)[48](index=48&type=chunk) [Our Markets and Growth Strategy](index=13&type=section&id=Our%20Markets%20and%20Growth%20Strategy) Certara operates in expanding biosimulation, regulatory science, and market access sectors, pursuing growth through technology, customer expansion, global reach, and acquisitions Addressable Markets (2023 Estimates) | Market | Estimated Size (2023) | Annual Growth Rate | | :--- | :--- | :--- | | Biosimulation | $3.4 billion | 17% | | Regulatory Science | $7.6 billion | 8% | | Market Access | $1.4 billion | 12% | - The company's growth strategy focuses on **advancing technology**, **expanding within its customer base**, **growing globally**, and **scaling through acquisitions**[93](index=93&type=chunk)[95](index=95&type=chunk)[97](index=97&type=chunk)[102](index=102&type=chunk) - Customers with annual revenue of **$100,000 or more increased 5.1%** to **389 in 2023**, with an aggregate software renewal rate of **88%**[98](index=98&type=chunk) - Certara has completed **20 strategic acquisitions since 2013**, including Formedix, Applied Biomath, and Vyasa in 2023[101](index=101&type=chunk) [Customers, Competition, and Intellectual Property](index=15&type=section&id=Customers,%20Competition,%20and%20Intellectual%20Property) Certara serves diverse biopharma and academic clients, competes in a fragmented market, and protects its innovations via patents, copyrights, and trade secrets - Customers include nearly **2,400 biopharmaceutical companies** and academic institutions across **66 countries**, with **23 global regulatory authorities** also licensing Certara's software[104](index=104&type=chunk) - The market is competitive and fragmented, with key competitors including Mathworks, Ansys, Simulations Plus, ICON's NONMEM, and open-source solutions[110](index=110&type=chunk)[112](index=112&type=chunk) - As of December 31, 2023, Certara's patent portfolio includes **27 issued patents** and **12 pending applications**, supplemented by copyright and trade secret protections[115](index=115&type=chunk)[117](index=117&type=chunk) [Human Capital and Government Regulation](index=17&type=section&id=Human%20Capital%20and%20Government%20Regulation) Certara employs 1,391 professionals, including 433 PhDs, and adheres to biopharmaceutical, data privacy, cybersecurity, and anti-corruption regulations - As of December 31, 2023, the company employed **1,391 professionals** across **28 countries**, with **433 holding PhDs**[119](index=119&type=chunk) - The company's operations comply with biopharmaceutical regulations like **Good Laboratory Practices (GLP)** and **Good Clinical Practices (GCP)**, supporting customer regulatory applications[121](index=121&type=chunk) - Certara is subject to stringent data privacy and cybersecurity laws, including **HIPAA** in the U.S. and **GDPR** in the EEA, due to handling sensitive data[123](index=123&type=chunk)[127](index=127&type=chunk) - The company is subject to anti-corruption laws such as the **U.S. Foreign Corrupt Practices Act (FCPA)** and the **U.K. Bribery Act of 2010**[131](index=131&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from market competition, R&D spending dependency, operational challenges, global operations, goodwill impairment, cybersecurity, data privacy, and significant indebtedness - **Industry Risks:** The company faces risks from decelerating acceptance of model-informed biopharmaceutical discovery, intense competition, regulatory changes, and reduced customer R&D spending[606](index=606&type=chunk)[610](index=610&type=chunk)[613](index=613&type=chunk)[615](index=615&type=chunk) - **Business & Operational Risks:** Key risks include market entry and customer expansion, dependence on key personnel, potential software defects (especially with AI), and customer license renewals[563](index=563&type=chunk)[570](index=570&type=chunk)[626](index=626&type=chunk)[629](index=629&type=chunk) - **IT, IP & Data Privacy Risks:** Risks include reliance on third-party cloud infrastructure, potential security breaches, and non-compliance with privacy and cybersecurity laws like GDPR and HIPAA[795](index=795&type=chunk)[805](index=805&type=chunk)[810](index=810&type=chunk) - **Financial & Indebtedness Risks:** Significant debt and restrictive covenants may adversely affect financial condition and strategy, alongside goodwill impairment risk, which incurred a **$47.0 million charge in Q3 2023**[859](index=859&type=chunk)[867](index=867&type=chunk)[874](index=874&type=chunk) [Cybersecurity](index=50&type=section&id=Item%201C.%20Cybersecurity) Certara manages cybersecurity risks through a program based on NIST and ISO standards, overseen by the Board, with no material incidents reported - The company's cybersecurity risk management adheres to industry best practices like **NIST 800-53**, **ISO 27001**, and **CIS Top 20**, emphasizing proactive monitoring[164](index=164&type=chunk)[166](index=166&type=chunk) - Cybersecurity governance is overseen by the **Board of Directors** and **Audit Committee**, with the **Security and Privacy Program Office (SPPO)** managing program design and implementation[171](index=171&type=chunk)[172](index=172&type=chunk) - As of the report date, no cybersecurity incidents have had or are reasonably likely to have a material impact on the company's business, operations, or financial condition[170](index=170&type=chunk) [Properties](index=52&type=section&id=Item%202.%20Properties) As of December 31, 2023, Certara leased 36 offices across 16 countries, including its Princeton, NJ headquarters, deemed adequate for operations Material Operating Locations (as of Dec 31, 2023) | Location | Approx. Square Footage | Lease Expiration | | :--- | :--- | :--- | | Wilmington, Delaware, USA | 18,250 | Feb 28, 2027 | | Princeton, New Jersey, USA | 17,560 | Jun 30, 2025 | | Sheffield, UK | 13,910 | Jan 28, 2028 | | Raleigh, North Carolina, USA | 11,250 | Jan 31, 2028 | Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=53&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Certara's common stock trades on Nasdaq under "CERT"; no dividends are expected as earnings will be reinvested, and 5,462 shares were purchased in Q4 2023 for tax payments - The company's common stock has been listed on **The Nasdaq Global Select Market** under the symbol **"CERT"** since December 11, 2020[183](index=183&type=chunk) - The company does not anticipate declaring dividends on its common stock, planning to reinvest all earnings into business operations and growth[185](index=185&type=chunk) Issuer Purchases of Equity Securities (Q4 2023) | Period | Total Shares Purchased | Weighted Avg. Price Paid per Share | | :--- | :--- | :--- | | Oct 2023 | 3,986 | $14.54 | | Nov 2023 | 428 | $12.19 | | Dec 2023 | 1,048 | $14.41 | | **Total** | **5,462** | **$14.33** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2023, Certara's revenue grew 6% to **$354.3 million**, but a **$55.4 million net loss** resulted from goodwill impairment and contingent consideration expenses, while liquidity remains strong [Key Performance Indicators](index=57&type=section&id=Key%20Performance%20Indicators) Key performance indicators include bookings, which decreased to **$402.3 million** in 2023, and the software renewal rate, which was **88%** Quarterly Bookings and Renewal Rates | (In Millions) | 2022 Full Year | 2023 Full Year | Change | | :--- | :--- | :--- | :--- | | Bookings | $409.0 | $402.3 | (1.6)% | | Renewal Rate | 91% | 88% | (3 pp) | [Results of Operations](index=67&type=section&id=Results%20of%20Operations) FY2023 revenue grew 6% to **$354.3 million**, but a **$55.4 million net loss** was driven by impairment and contingent consideration, contrasting with FY2022's **$14.7 million net income** Consolidated Statement of Operations Data (in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenues** | **$354,337** | **$335,644** | **$286,104** | | Income (loss) from operations | $(40,774) | $32,521 | $13,579 | | **Net income (loss)** | **$(55,357)** | **$14,731** | **$(13,266)** | - **2023 vs. 2022:** Revenue increased **6%** to **$354.3 million**, driven by **14% software revenue growth**, resulting in a **$55.4 million net loss** due to a **$47.0 million goodwill impairment** and **$24.1 million contingent consideration expense**[340](index=340&type=chunk)[358](index=358&type=chunk) - **2022 vs. 2021:** Revenue increased **17%** to **$335.6 million**, with **33% software growth**, leading to a **$14.7 million net income** from a **$13.3 million net loss**, aided by lower acquisition costs[360](index=360&type=chunk)[403](index=403&type=chunk)[410](index=410&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, Certara held **$235.0 million** in cash, generated **$82.8 million** from operations, used **$79.6 million** in investing, and had **$294.5 million** in long-term debt Summary of Cash Flows (in thousands) | Cash Flow | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $82,755 | $92,543 | $60,388 | | Net cash used in investing activities | $(79,550) | $(27,837) | $(269,922) | | Net cash provided by (used in) financing activities | $(9,447) | $(7,363) | $123,391 | - As of December 31, 2023, the company held **$235.0 million in cash and cash equivalents** and **$294.5 million in outstanding term loan borrowings**[468](index=468&type=chunk)[782](index=782&type=chunk) - The decrease in 2023 operating cash flow was primarily due to lower deferred revenue inflow and increased cash used for liabilities and taxes[421](index=421&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Certara faces foreign currency risk from **27% of revenue** outside the U.S. and interest rate risk from **$294.5 million** in variable-rate debt, partially mitigated by swaps - The company faces foreign currency exchange risk, with **27% of 2023 revenue from outside the U.S.**; a hypothetical **10% USD change** could impact income by approximately **$2.4 million**[543](index=543&type=chunk)[544](index=544&type=chunk) - The company is exposed to interest rate risk from **$294.5 million** in variable-rate term loan borrowings, partially mitigated by interest rate swaps valued at **$5.6 million** as of year-end[553](index=553&type=chunk)[554](index=554&type=chunk) [Financial Statements and Supplementary Data](index=85&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for FY2023 and FY2022, with RSM US LLP providing an unqualified opinion on both financials and internal controls Consolidated Balance Sheet Data (in thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $234,951 | $236,586 | | Total Assets | $1,563,140 | $1,572,922 | | Total Liabilities | $516,300 | $493,261 | | Total Stockholders' Equity | $1,046,840 | $1,079,661 | - RSM US LLP issued an **unqualified opinion** on the consolidated financial statements for 2023 and 2022, and on the effectiveness of internal control over financial reporting as of December 31, 2023[562](index=562&type=chunk)[597](index=597&type=chunk) - In 2023, the company completed three acquisitions (DIDB, Formedix, ABM), resulting in **$40.2 million in intangible assets** and **$9.7 million in contingent consideration liabilities**[587](index=587&type=chunk)[589](index=589&type=chunk) - A **$46,984 thousand goodwill impairment charge** was recorded in Q3 2023 for the Regulatory Writing reporting unit[375](index=375&type=chunk) [Controls and Procedures](index=134&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded disclosure controls and internal controls over financial reporting were effective as of December 31, 2023, with an unqualified audit opinion from RSM US LLP - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2023[576](index=576&type=chunk) - Management assessed internal control over financial reporting as **effective** as of December 31, 2023, a conclusion audited and affirmed with an **unqualified opinion by RSM US LLP**[578](index=578&type=chunk)[579](index=579&type=chunk) Part III [Directors, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=136&type=section&id=Items%2010,%2011,%2012,%2013,%20and%2014) Information for Items 10-14, covering governance, compensation, and ownership, is incorporated by reference from the definitive proxy statement for the 2023 Annual Meeting - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the definitive proxy statement, expected to be filed within **120 days** of December 31, 2023[939](index=939&type=chunk)[940](index=940&type=chunk)[941](index=941&type=chunk)[943](index=943&type=chunk)[945](index=945&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists financial statements (in Item 8) and exhibits filed as part of the Annual Report on Form 10-K - This section lists all documents filed as part of the annual report, including financial statements (in Item 8) and exhibits required by **Item 601 of Regulation S-K**[931](index=931&type=chunk)[948](index=948&type=chunk)

1. As of 12/31/2022 Differentiated scientific and technology expertise Software Tech-driven Services © Copyright 2023 Certara, L.P. All rights reserved. PopPK Dose-response Renal impairment Hepatic impairment 5 6 Renal impairment Hepatic impairment Pediatric HIV Animal QT interval prolongation 3 PopPK Dose-response <2000 2000 - 2010 2011 - 2015 2016 - 2020 1. Science Direct search for publications by key search terms 2. Model‐Informed Drug Development: Current US Regulatory Practice and Future Consideration ...

Financial Data and Key Metrics Changes - Total company revenue for Q3 2023 was $85.6 million, representing a year-over-year growth of 1% on a reported basis and flat on a constant currency basis [4][25] - Software revenue was $31.3 million, increasing by 10% compared to the prior year, while services revenue was $54.2 million, declining by 4% year-over-year [4][25] - Adjusted EBITDA for Q3 2023 was $28.8 million, a decrease of 12% from $32.7 million in Q3 2022, with an adjusted EBITDA margin of 34% [31] - Net loss for Q3 2023 was $49 million, compared to a net income of $3.9 million in Q3 2022 [30] Business Line Data and Key Metrics Changes - Software bookings for Q3 2023 were $27.2 million, reflecting a 7% growth year-over-year, with trailing 12-month software bookings at $133.1 million, up 13% [17][26] - Services bookings in Q3 totaled $57.6 million, representing a 6% increase compared to the same period last year, while trailing 12-month services bookings decreased by 4% [48] - The software aggregate renewal rate was 86% in Q3, with a net retention rate of 107% [27][55] Market Data and Key Metrics Changes - The company observed stabilization in customer spending, particularly in the biopharma sector, with improved activity noted in Q3 compared to Q2 [15][44] - There were indications of increased demand for biosimulation software and services across all customer tiers, with a return to growth among smaller biopharma companies [16][18] Company Strategy and Development Direction - The company is focused on enhancing its software capabilities, particularly through the integration of artificial intelligence, with the launch of Certara AI and the acquisition of Vyasa [20][21] - Certara aims to drive long-term growth in biosimulation, emphasizing the value of its platform in reducing costs and accelerating drug project timelines [24][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its plans and drive growth, despite some near-term uncertainties in certain business areas [16][22] - The company reiterated its 2023 guidance, expecting total revenue between $345 million and $360 million, representing year-over-year growth of 3% to 7% [33][99] Other Important Information - Total operating expenses for Q3 2023 were $102.5 million, including a $47 million goodwill impairment expense, an increase from $41 million in Q3 2022 [29] - The company ended the quarter with $272.3 million in cash and cash equivalents, alongside $292.2 million in outstanding borrowings [32] Q&A Session Summary Question: Can you elaborate on the software renewal rate and its context? - The aggregate renewal rate was 86% for the quarter, influenced by timing issues, with expectations for a return to the 90% range in Q4 [55] Question: What are the expectations for services bookings in Q4? - Services bookings are expected to continue along the guidance pathway provided earlier, with positive momentum observed [73] Question: Can you confirm the guidance for year-over-year bookings? - The company expects bookings to decline in the low single digits compared to 2022, consistent with previous commentary [51][58] Question: How is the hiring outlook and utilization levels? - Utilization levels are consistent with expectations, and hiring continues in billable areas, though some non-billable hiring has slowed [78][59] Question: What factors could affect the year-end guidance? - To reach the lower end of guidance, a reversal of momentum in services and deceleration in software would be needed, which is not currently anticipated [99]