Certara, Inc. Q2 FY2025 earnings call

• Financial Performance: Second quarter revenue was $104.6 million (12% Y/Y growth) and bookings were $112 million (13% Y/Y growth). The company is reiterating full-year guidance. - Product Updates: Certara Simcyp received EMA qualification for a PBPK Modeling Platform. The company is launching CertaraIQ, an AI-enabled QSP software solution. Updates were made to the Phoenix PK/PD platform and Pinnacle21 product suite. - R&D and Acquisitions: Investment in a next-generation AI-enabled MIDD platform, with the acquisition of Applied BioMath in late 2023 and collaboration with Merck on Pinnacle21. A strategic review of the regulatory business is ongoing.

Software: Revenue was $46.7 million, growing 22% on a reported basis and 9% organically, led by Simcyp with additional contribution from Chemaxon ($5.1 million). Bookings were strong in Tiers 2 and 3, with Tier 1 experiencing timing-related softness. Services: Revenue was $57.9 million, up 5% on a reported basis. Bookings grew across all customer tiers, driven by strength in Tier 1 for biosimulation and regulatory services. Biosimulation services bookings were boosted by QSP and Simcyp services, while regulatory bookings also saw growth.

• Total revenue is expected to be in the range of $415 million to $425 million, representing 8% to 10% growth compared to 2024. - Chemaxon is expected to contribute software revenue of $23 million to $25 million. - Adjusted EBITDA margins are expected to be between 30% to 32%. - Adjusted EPS is expected to be in the range of $0.42 to $0.46 per share, with a tax rate of 25% to 30%.

• Geopolitical and macroeconomic uncertainty is causing large pharma companies to be cautious, affecting decision-making timelines. - The biotech funding environment remains below trend. - There was timing-related softness in Tier 1 software bookings.

Q: Maybe just following up on an earlier question around QSP, and you flagged the 50% of new engagements tied to mAbs just kind of a proxy for, the uptick in demand you think you've seen since the FDA guidance is released. But just wonder if you can give some more context around what the breakdown of therapeutic modality looked like for QSP pre-FDA guidance?

A: QSP has been working heavily on mAbs for some time. There's been somewhat of an uptick since the FDA made their announcement, but it's been a process where companies have been exploring the possibility and meaning of the FDA's talk, leading to increased interest in QSP modeling.