Certara (CERT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 11% year-over-year to $94.8 million, driven by strong biosimulation software and services, client expansions, and acquisitions including Chemaxon.

• Net loss narrowed to $1.4 million from $49 million in Q3 2023, mainly due to the absence of a prior-year $47 million goodwill impairment.

• Adjusted EBITDA rose 15% to $33.1 million, with a 35% margin, reflecting improved operating performance.

• Software segment drove strong performance, with 15% revenue growth and 28% bookings growth; Chemaxon acquisition expands offerings into discovery and molecule selection.

• Regulatory services underperformed, prompting a strategic review and resource reallocation.

Financial highlights

• Software revenue was $35.9 million, up 15% year-over-year; services revenue was $58.9 million, up 9%.

• Adjusted EBITDA was $33.1 million (35% margin), up from $28.8 million last year.

• Net loss for Q3 2024 was $1.4 million, compared to a $49 million loss in Q3 2023 (impacted by prior goodwill impairment).

• Adjusted net income was $20.3 million, up from $17.1 million; adjusted EPS was $0.13, up from $0.11.

• Ended Q3 with $233 million in cash and $296–299 million in term loan borrowings.

Outlook and guidance

• 2024 revenue guidance updated to $380–$385 million (7–9% growth); excluding Chemaxon, growth expected at 6–7%.

• Adjusted EBITDA expected at $120–$124 million; adjusted EPS at $0.41–$0.44.

• Guidance reflects Chemaxon acquisition, more cautious regulatory services outlook, and fully diluted shares expected between 160–162 million.