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• Revenue: $106 million, 10% year-over-year growth.

• Bookings: $118.2 million, 12% year-over-year growth.

• Software Revenue: $46.4 million, 18% year-over-year growth.

• Chemaxon Contribution: $5.9 million in revenue and $4.9 million in bookings.

• Services Revenue: $59.6 million, 4% year-over-year growth.

• Adjusted EBITDA: $34.8 million, 33% margin.

• Net Income: $4.7 million compared to a net loss of $4.7 million in the prior year.

• Adjusted Net Income: $22.4 million compared to $16.5 million in the prior year.

• Diluted EPS: $0.03 compared to a loss of $0.03 per share in the prior year.

• Adjusted Diluted EPS: $0.14 compared to $0.10 in the prior year.

• Cash and Cash Equivalents: $179.1 million.

• Outstanding Borrowings: $294.8 million on the term loan.

• Share Repurchase Authorization: $100 million, with $25 million repurchased to date.

• Guidance for 2025: Revenue of $415 million to $425 million, adjusted EBITDA margins of 30% to 32%, adjusted EPS of $0.42 to $0.46.

• Warning! GuruFocus has detected 6 Warning Signs with ACEL.

Release Date: May 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Certara Inc (NASDAQ:CERT) reported a 10% year-over-year revenue growth for Q1 2025, reaching $106 million.

• The company achieved a 12% increase in bookings, with software bookings growing by 23% and services bookings by 7%.

• Certara's Non-Animal Navigator solution has generated significant interest following the FDA's announcement to phase out animal testing.

• The company launched the 24 version of its Simcyp simulator, featuring numerous new enhancements and features.

• Certara announced a $100 million share repurchase authorization, reflecting confidence in its strategic growth initiatives.

Negative Points

• Certara faces continued headwinds from IRA price controls and an erratic capital-raising environment for biotech.

• There is softness in demand from Tier 1 customers for biosimulation services.

• The software net retention ratio was lower than historical averages, at 102% for the quarter.

• The company anticipates a challenging end market environment, with biotech funding and Tier 1 pharma decision-making slowness.

• Certara's primary use of capital remains focused on M&A and organic strategic investments, which may limit flexibility in other areas.

Q & A Highlights

Q: What kind of interest have you received for the Non-Animal Navigator, and what is the expected net revenue retention (NRR) for Certara in the current business environment? A: We've seen significant interest from customers trying to understand the FDA's stance on phasing out animal testing and the potential for replacing animal models. Regarding NRR, it was 102% this quarter, lower than usual due to expected timing of organic software revenue achievement. We anticipate an increase over the course of 2025 as software revenue grows. - William Feehery, CEO, and John Gallagher, CFO