What guidance did Certara's management provide for the next earnings period?

Did Certara beat or miss consensus estimates last quarter?

What is Certara's latest dividend and current dividend yield?

What is Certara's gross profit margin?

What is the market's earnings forecast for Certara next quarter?

What factors drove the changes in Certara's revenue and profit?

What does Certara do and what are its main business segments?

What were the key takeaways from Certara's earnings call?

- **Revenue resilience**: Q3 revenue up 10% YoY to $104.6 million, with adjusted EBITDA margin of 34%.
- **Investment in growth**: R&D up 24% YoY, driving new product launches like Certara IQ (QSP modeling) and Phoenix Cloud.
- **Tiered customer dynamics**: Tier one services bookings down 9% YoY due to caution, while tier three biotech growth (+double digits) offsets weakness.
- **Margin expansion**: Gross profit boosted by software mix (65% ratable/subscriptions) and cost productivity, with EBITDA margin guidance raised to 32%.
- **2025 outlook**: Narrowed revenue range ($415-$420 million) reflects cautious tier one environment, but software growth and share buybacks support EPS guidance of $0.45-$0.47.

**【CEO Summary Section】**
- Q3 2025 revenue of $104.6 million, up 10% YoY, with adjusted EBITDA of $35.2 million (34% margin). R&D investment grew 24% YoY to 10% of revenue.
- Bookings of $96.6 million (+1% YoY) underperformed due to tier one customer caution, with 1% growth in software bookings and 9% decline in services.
- New product launches (Certara IQ, Phoenix Cloud) show early success, with QSP services growing ahead of the rest of the business.
- 2025 revenue guidance narrowed to $415-$420 million, with adjusted EBITDA margin raised to high end of guidance range (32%).

**【CFO Financial Commentary】**
- Software revenue: $43.8 million (+22% YoY), driven by Simcyp and Chemaxon ($5.6 million contribution). Services revenue: $60.8 million (+3% YoY), with QSP growth offsetting regulatory softness.
- Gross profit improved due to software mix (65% of software revenue from ratable/subscriptions) and cost productivity. Adjusted EPS: $0.14 vs. $0.13 YoY.
- Balance sheet: $172.7 million cash, $293.1 million term loan. Share buybacks: $41 million YTD.
- 2025 guidance: $415-$420 million revenue, 32% EBITDA margin, $0.45-$0.47 EPS.

**【Q&A Highlights】**
- **Tier 1 Customer Behavior**: Slowed decision-making in Q3 continued into Q4, with deals pushed to Q4 and 2026. Tier 3 biotech growth offset tier one weakness.
- **Gross Margin**: Productivity gains (e.g., services cost reductions) and software mix (Chemaxon licenses) drove margin expansion.
- **AI & Product Innovation**: Certara IQ (QSP modeling) and Phoenix Cloud (cloud migration) well-received, with QSP becoming a key growth driver.
- **Macro Impact**: Pharma onshoring and MFN pricing clarity may stabilize 2026 budgets, but near-term tier one caution persists.
- **Regulatory Services**: Inconsistent performance but cash generative; strategic review nearing conclusion.


Certara, Inc. (CERT) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CERT

CERT fundamentals

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