Certara (CERT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 3% year-over-year to $93.3 million, driven by strong software performance and improved biotech customer activity, while services revenue declined due to cautious spending by large biopharma clients.

• Net loss was $12.6 million, compared to net income of $4.7 million in Q2 2023, primarily due to increased operating expenses from investments in innovation, growth, and M&A.

• Adjusted EBITDA was $26.3 million (28% margin), down from $32.4 million in Q2 2023.

• Announced acquisition agreement with Chemaxon to expand biosimulation portfolio and strengthen offerings in drug discovery.

• Cost reduction and resource optimization actions were implemented to align with growth opportunities and improve profitability.

Financial highlights

• Software revenue reached $38.2 million, up 13% year-over-year; services revenue was $55.1 million, down 3%.

• Adjusted EBITDA was $26.3 million, down from $32.4 million in Q2 2023; adjusted net income was $11.4 million, down from $18.4 million.

• Diluted loss per share was $0.08; adjusted diluted EPS was $0.07, down from $0.12 last year.

• Bookings increased 15% year-over-year to $98.9 million, with software bookings up 17% and services bookings up 14%.

• Cash and cash equivalents stood at $224.6 million as of June 30, 2024; $296.7–$300 million in term loan borrowings.

Outlook and guidance

• Full-year 2024 revenue guidance reiterated at $385–$400 million (9–13% growth), tracking toward the lower half of the range.

• Adjusted EBITDA margin guidance maintained at 31–33%.

• Adjusted EPS expected at $0.41–$0.46; tax rate 25–30%; fully diluted shares 160–162 million.

• Guidance excludes ChemAxon impact; ChemAxon expected to close in Q4.

• Management expects continued investment in R&D, sales, and marketing to drive long-term growth.