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Certara (CERT) investor relations material
Certara Stephens Annual Investment Conference summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Demand environment and customer trends
Tier 3 biotech customers showed strong double-digit growth in biosim services, offsetting some weakness in Tier 1 large pharma due to delays and slower decision-making, especially in regulatory and biosim services.
Weakness in Tier 1 persisted into Q4, but close rates improved in late November.
Q4 is expected to be strong, with sequential booking increases, though seasonality is less pronounced due to Tier 1 slowness.
Software versus services and market conditions
Software revenue remains stable with high renewal rates and less volatility, while services bookings are more volatile and influenced by market sentiment.
Conversion from bookings to revenue in services takes a couple of quarters, with backlog conversion remaining strong.
Market recovery in CROs is expected to be a tailwind, with Certara's performance typically lagging by 1-2 quarters.
Regulatory environment and policy impact
Mixed regulatory backdrop with FDA uncertainty and fewer drug approvals, impacting regulatory and biosim services.
FDA's directive on non-animal methodologies (NAMs) in April provided a tailwind, especially for Simcyp and QSP businesses.
Awaiting further FDA guidance to support higher growth rates in NAMs-related areas.
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