Certara(CERT) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for the three months ended September 30, 2024, increased to $94.82 million, up 10.3$85.58 million in the same period of 2023[16] - Net loss for the three months ended September 30, 2024, was $1.37 million, compared to a net loss of$48.97 million for the same period in 2023[16] - Total operating expenses for the three months ended September 30, 2024, decreased to $55.04 million, down 46.3$102.48 million in the prior year[16] - The company reported a basic net loss per share of $0.01 for the three months ended September 30, 2024, compared to a loss of$0.31 per share in the same period of 2023[16] - Net loss for the nine months ended September 30, 2024, was $18,628,000, compared to a net loss of$42,901,000 for the same period in 2023, representing a 56.5% improvement[21] - Adjusted EBITDA for Q3 2024 was $33.1 million, up from$28.8 million in Q3 2023[169] - Adjusted net income for Q3 2024 was $20.3 million, compared to$17.1 million in Q3 2023[171] Cash and Assets - Cash and cash equivalents as of September 30, 2024, were $233.02 million, slightly down from$234.95 million as of December 31, 2023[15] - Total assets as of September 30, 2024, were $1.54 billion, a decrease from$1.56 billion as of December 31, 2023[15] - Accounts receivable increased to $95.96 million as of September 30, 2024, compared to$84.86 million as of December 31, 2023[15] - The company’s total liabilities decreased to $489.82 million as of September 30, 2024, from$516.30 million as of December 31, 2023[15] - Stockholders' equity increased to $1.05 billion as of September 30, 2024, compared to$1.05 billion as of December 31, 2023[15] - Total assets as of September 30, 2024, amounted to $153,102 thousand, with money market funds at$147,478 thousand and interest rate swap assets at $5,624 thousand[42] Expenses and Liabilities - Common shares issued for employee share-based compensation totaled 1,297,519, with a corresponding expense of$27,043,000[19] - The accumulated deficit as of September 30, 2024, was $(134,858,000), an increase from$(116,230,000) as of December 31, 2023[17] - The additional paid-in capital increased to $1,209,196,000 as of September 30, 2024, from$1,178,461,000 as of December 31, 2023[17] - Total liabilities as of September 30, 2024, were $54,457 thousand, consisting solely of contingent liabilities related to acquisitions[42] - Total accrued expenses decreased to$53,294 thousand as of September 30, 2024, down from $56,779 thousand, a reduction of 6.9$8,340,000[79] - The acquisition of Formedix was completed for an estimated consideration of $41,389,000, with contingent consideration not to exceed$9,000,000[82] - The acquisition of Applied BioMath, LLC was completed for an estimated consideration of $36,594,000, with contingent consideration not to exceed$17,550,000[85] - The company completed the acquisition of Chemaxon on October 1, 2024, for a total cash consideration of $90,000 thousand[139] Revenue Breakdown - Total revenue for the nine months ended September 30, 2024, was$284,787,000, representing a 6.5% increase from $266,327,000 in the same period of 2023[72] - Software licenses transferred at a point in time generated$10,202,000 in revenue for 2024, compared to $9,916,000 in 2023, marking a 2.9$58,908,000 in 2024 from $54,246,000 in 2023, reflecting an increase of 10.0$4.6 million, or 15%, to $35.9 million for the three months ended September 30, 2024, driven by strong demand from existing customers and business acquisitions[202] - Services revenues increased by$4.7 million, or 9%, to $58.9 million for the three months ended September 30, 2024, attributed to growth from business acquisitions and technology-enabled services[203] Operating Expenses - Sales and marketing expenses increased by$4.1 million, or 57%, to $11.3 million for the three months ended September 30, 2024, mainly due to headcount growth and increased commission expenses[204] - General and administrative expenses decreased by$5.7 million, or 21%, to $22.0 million for the three months ended September 30, 2024, compared to the same period in 2023[206] - Research and development expenses for the nine months ended September 30, 2024, totaled$29.33 million, up from $26.16 million in the prior year[16] - Research and development expenses decreased by$0.7 million, or 8%, to 8.3 million for the three months ended September 30, 2024, primarily due to an increase in capitalized costs in R&D[205] Market and Competition - The company has operations in multiple countries, including the United States, Australia, and Germany, indicating a broad market presence[24] - Regulatory acceptance of biosimulation is increasing, positively impacting demand for the company's products and services[159] - The company faces competition in the biosimulation market, with key factors including model quality and regulatory acceptance[161] Tax and Interest - The effective tax rate for the three months ended September 30, 2024, was 17%, compared to 9% for the same period in 2023[135] - Interest incurred on the Credit Agreement for the term loan amounted to 19,900,000 for the nine months ended September 30, 2024[96] - Interest expense decreased by $0.7 million, or 12$5.2 million for the three months ended September 30, 2024, compared to the same period in 2023[210]