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 - Revenue reached $104.6 million[22], reflecting a 12% year-over-year increase[23] - Constant Currency revenue growth was 10%[23] - Net loss was ($2.0 million)[22] - Adjusted EBITDA was $31.9 million[22], a 21% increase compared to the prior year[39] - Adjusted diluted EPS was $0.07[22] Bookings and Retention - Net bookings for the quarter were $112.0 million[29] - Trailing twelve months (TTM) bookings reached $470.8 million[29] - Software Net Retention Rate (NRR) was 107.6%[35] Guidance - The company reiterated its FY 2025 revenue guidance of $415-$425 million[48] - Adjusted EBITDA margin is expected to be 30-32%[48] - Adjusted diluted EPS is projected to be $0.42-$0.46[48]

Financial Performance - Q1 2025 - Revenue reached $106 million, a 10% increase year-over-year on a constant currency basis[22, 26] - Net income was $4.7 million[22] - Adjusted EBITDA was $34.8 million, representing a 20% increase compared to the prior year period[22, 39] - Diluted EPS stood at $0.03, while adjusted diluted EPS reached $0.14[22] Bookings and Retention - Q1 Reported Net Bookings totaled $118.2 million[29] - Trailing twelve months (TTM) Reported Net Bookings reached $457.7 million[29] - The book-to-bill ratio was 1.16x[32] - The software net retention rate (NRR) was 102.4%[35] Growth Drivers - Organic software revenue grew by 4%, with Chemaxon contributing approximately 1410 basis points[40] - Organic services revenue grew by 3%, with Chemaxon contributing approximately 50 basis points[41] - Organic total revenue grew by 4%, with Chemaxon contributing approximately 610 basis points[42] - Organic software bookings grew by 9%, with Chemaxon contributing approximately 1340 basis points[40] - Organic services bookings grew by 6%, with Chemaxon contributing approximately 60 basis points[41] - Organic total bookings grew by 7%, with Chemaxon contributing approximately 460 basis points[42] 2025 Outlook - The company reiterated its full-year 2025 revenue guidance of $415-$425 million, representing an 8-10% growth[48] - Adjusted EBITDA margin is expected to be 30-32%[48] - Adjusted diluted EPS is projected to be $0.42-$0.46[48] - Chemaxon revenue is expected to be $23-$25 million[51]

Financial Data and Key Metrics Changes - Certara reported total revenue of $385.1 million for the full year 2024, representing a 9% increase compared to 2023 [8][30] - Fourth quarter revenue was $100.4 million, reflecting a 14% year-over-year growth [30] - Adjusted EBITDA for the fourth quarter was $33.5 million, up from $29.6 million in the same quarter of 2023, with an adjusted EBITDA margin of 33% [41][42] Business Line Data and Key Metrics Changes - Software revenue for the fourth quarter was $42.3 million, a 26% increase year-over-year, driven by biosimulation software and Pinnacle 21 [32] - Services revenue in the fourth quarter was $58.1 million, up 7% compared to the prior year [36] - Regulatory writing revenue for 2024 was $54.7 million, down from $60.5 million in 2023, indicating a decline in this segment [36] Market Data and Key Metrics Changes - Fourth quarter bookings totaled $144.5 million, a 22% increase from the previous year, with software bookings growing by 38% [9][31] - The software net retention rate was 106% for the fourth quarter and 108% for the full year, consistent with long-term growth profiles [35] Company Strategy and Development Direction - Certara is focused on enabling Model-Informed Drug Development (MIDD) in the biopharmaceutical industry, emphasizing the integration of generative artificial intelligence into existing products [10][14] - The company plans to invest further in software development, particularly for the discovery and lead optimization phases, leveraging Chemaxon's capabilities [21][22] - Certara aims to build an integrated software platform to enhance its competitive positioning in the market [20][22] Management's Comments on Operating Environment and Future Outlook - Management noted that customer sentiment remains cautious due to funding constraints and geopolitical uncertainties, with expectations for 2025 to mirror 2024 in terms of clinical R&D spending [12][13] - The company anticipates total revenue for 2025 to be in the range of $415 million to $425 million, representing growth of 8% to 10% compared to 2024 [46] Other Important Information - Certara expanded its customer base to over 2,400 life sciences companies by the end of 2024, with 431 customers having an annual contract value exceeding $100,000 [18][19] - The company completed the acquisition of Chemaxon in October 2024, which is expected to enhance its capabilities in the discovery biosimulation market [17][26] Q&A Session Summary Question: What drives the 2025 revenue guidance? - Management indicated that the guidance is influenced by spending patterns among Tier 1 and Tier 3 customers, with potential improvements in end markets pushing towards the higher end of the range [55] Question: What are the incremental R&D investments planned for 2025? - The company plans to invest in R&D to maintain momentum in its software portfolio and integrate Chemaxon, which is expected to impact margins [57][58] Question: How is the CoAuthor product performing? - CoAuthor has multiple paying customers and is expected to significantly reduce the time required to create regulatory documents, with revenue expectations in the millions for the year [110][112] Question: What is the outlook for regulatory services? - Regulatory services returned to growth in the fourth quarter, primarily driven by Tier 1 customers, which is expected to positively impact revenue moving into 2025 [106] Question: How does the company view the competitive landscape for Chemaxon? - Chemaxon operates in a fragmented discovery space with unique tools, and the company believes it has a strong competitive position in this area [87]