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 ...

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]

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]

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]

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]

Core Insights - The market has experienced volatility due to unexpected tariff policy changes, leading to uneven recovery among firms, with some stocks emerging as high-momentum plays [1][2] Group 1: Software-Based Drug Development - Certara Inc. has seen a 30% year-to-date increase in stock price, driven by strong outlook and a $100 million share buyback program [3][6] - Certara's revenue guidance for 2025 is projected between $415 million and $425 million, with adjusted earnings per share expected to be between 42 cents and 46 cents [4] - Schrödinger Inc. has also experienced a 25% year-to-date increase, attributed to FDA policy shifts favoring human-relevant testing and a legal settlement [9][10] Group 2: Modular Furniture Industry - The Lovesac Co. reported a 23% increase in stock price following an earnings beat and the launch of new product platforms, with EPS exceeding expectations by 33 cents [12][14] - Lovesac's modular design allows for increased supply chain flexibility, enabling the company to adapt to geopolitical changes [14] - Analysts project a 57.86% upside for Lovesac's stock, with a current price of $20.06 and a 12-month forecast of $31.67 [13][14]