Certara Reports Second Quarter 2024 Financial Results
Certara (Nasdaq: CERT) reported its Q2 2024 financial results, showing mixed performance. Revenue increased 3% year-over-year to $93.3 million, driven by 13% growth in software revenue to $38.2 million. However, services revenue declined 3% to $55.1 million. The company reported a net loss of $12.6 million, compared to a net income of $4.7 million in Q2 2023. Adjusted EBITDA decreased to $26.3 million from $32.4 million last year.
Despite challenges in services due to cautious spending among large biopharma customers, Certara reiterated its full-year 2024 guidance. The company expects revenue between $385-400 million, adjusted EBITDA margin of 31-33%, and adjusted diluted EPS of $0.41-$0.46.
Certara (Nasdaq: CERT) ha riportato i risultati finanziari per il secondo trimestre del 2024, evidenziando una performance mista. I ricavi sono aumentati del 3% rispetto all'anno precedente, raggiungendo i 93,3 milioni di dollari, grazie a una crescita del 13% nei ricavi software, pari a 38,2 milioni di dollari. Tuttavia, i ricavi dei servizi sono diminuiti del 3%, attestandosi a 55,1 milioni di dollari. L'azienda ha registrato una perdita netta di 12,6 milioni di dollari, rispetto a un utile netto di 4,7 milioni di dollari nel secondo trimestre del 2023. L'EBITDA rettificato è sceso a 26,3 milioni di dollari, rispetto ai 32,4 milioni dell'anno scorso.
Nonostante le difficoltà nei servizi a causa di spese caute da parte dei grandi clienti biopharma, Certara ha confermato le previsioni per l'intero anno 2024. L'azienda prevede ricavi tra 385 e 400 milioni di dollari, una margine EBITDA rettificato del 31-33% e un utile per azione diluito rettificato tra 0,41 e 0,46 dollari.
Certara (Nasdaq: CERT) presentó sus resultados financieros del segundo trimestre de 2024, mostrando un rendimiento mixto. Los ingresos aumentaron un 3% interanual, alcanzando los 93,3 millones de dólares, impulsados por un crecimiento del 13% en los ingresos por software, que sumaron 38,2 millones de dólares. Sin embargo, los ingresos por servicios disminuyeron un 3%, totalizando 55,1 millones de dólares. La compañía reportó una pérdida neta de 12,6 millones de dólares, en contraste con un ingreso neto de 4,7 millones de dólares en el segundo trimestre de 2023. El EBITDA ajustado bajó a 26,3 millones de dólares, desde los 32,4 millones del año pasado.
A pesar de los desafíos en servicios debido al gasto cauteloso de los grandes clientes biofarmacéuticos, Certara reiteró su guía para todo el año 2024. La compañía espera ingresos entre 385 y 400 millones de dólares, un margen EBITDA ajustado del 31-33% y un EPS ajustado diluido de 0,41 a 0,46 dólares.
Certara (Nasdaq: CERT)는 2024년 2분기 재무 결과를 발표했으며, 혼합된 성과를 보여주었습니다. 매출은 전년 대비 3% 증가하여 9330만 달러에 달했으며, 소프트웨어 매출은 13% 증가하여 3820만 달러에 이르렀습니다. 그러나 서비스 매출은 3% 감소하여 5510만 달러에 그쳤습니다. 회사는 2023년 2분기에 470만 달러의 순이익을 올렸던 것과 달리 1260만 달러의 순손실을 기록했습니다. 조정된 EBITDA는 지난해 3240만 달러에서 2630만 달러로 감소했습니다.
대형 생명공학 고객의 신중한 지출로 인해 서비스 부문에 어려움이 있었음에도 불구하고, Certara는 2024년 전년 지침을 재확인했습니다. 회사는 3억 8500만 달러에서 4억 달러 사이의 매출, 31-33%의 조정된 EBITDA 마진, 그리고 0.41-0.46 달러의 조정된 희석 EPS를 예상하고 있습니다.
Certara (Nasdaq: CERT) a publié ses résultats financiers du deuxième trimestre 2024, montrant des performances contrastées. Les revenus ont augmenté de 3 % par rapport à l'année précédente, atteignant 93,3 millions de dollars, soutenus par une croissance de 13 % des revenus logiciels à 38,2 millions de dollars. Cependant, les revenus de services ont baissé de 3 % pour s'établir à 55,1 millions de dollars. L'entreprise a enregistré une perte nette de 12,6 millions de dollars, contre un bénéfice net de 4,7 millions de dollars au deuxième trimestre 2023. L'EBITDA ajusté a diminué à 26,3 millions de dollars, contre 32,4 millions de dollars l'année précédente.
Malgré les défis dans les services en raison de dépenses prudentes de la part des grands clients biopharmaceutiques, Certara a réaffirmé ses prévisions pour l'année 2024. L'entreprise prévoit des revenus compris entre 385 et 400 millions de dollars, une marge EBITDA ajustée de 31 à 33 %, et un bénéfice par action dilué ajusté de 0,41 à 0,46 dollar.
Certara (Nasdaq: CERT) hat die finanziellen Ergebnisse für das zweite Quartal 2024 veröffentlicht, die eine gemischte Leistung zeigen. Der Umsatz stieg im Jahresvergleich um 3 % auf 93,3 Millionen US-Dollar, was durch ein Umsatzwachstum im Softwarebereich von 13 % auf 38,2 Millionen US-Dollar vorangetrieben wurde. Der Umsatz aus Dienstleistungen hingegen ging um 3 % auf 55,1 Millionen US-Dollar zurück. Das Unternehmen berichtete von einem Nettoverlust von 12,6 Millionen US-Dollar, verglichen mit einem Nettoergebnis von 4,7 Millionen US-Dollar im zweiten Quartal 2023. Das bereinigte EBITDA sank von 32,4 Millionen US-Dollar im Vorjahr auf 26,3 Millionen US-Dollar.
Trotz der Herausforderungen im Dienstleistungssektor aufgrund vorsichtiger Ausgaben großer Biopharma-Kunden bestätigte Certara die Jahresprognose für 2024. Das Unternehmen erwartet einen Umsatz zwischen 385 und 400 Millionen US-Dollar, eine bereinigte EBITDA-Marge von 31-33 % und einen bereinigten verwässerten Gewinn pro Aktie von 0,41 bis 0,46 US-Dollar.
- Software revenue grew 13% year-over-year to $38.2 million
- Total bookings increased 15% to $98.9 million
- Software bookings grew 17% to $41.8 million
- Company reiterated full-year 2024 financial guidance
- Services revenue declined 3% year-over-year to $55.1 million
- Net loss of $12.6 million compared to net income of $4.7 million in Q2 2023
- Adjusted EBITDA decreased to $26.3 million from $32.4 million last year
- Adjusted diluted EPS decreased to $0.07 from $0.12 in Q2 2023
Insights
Certara's Q2 2024 results present a mixed picture. While overall revenue grew
The company's adjusted EBITDA decreased from
Certara's Q2 results reflect broader industry trends. The strong performance in software, particularly in biosimulation and Pinnacle 21, aligns with the increasing adoption of AI and digital tools in drug development. However, the decline in services revenue due to cautious spending among large biopharma customers signals potential industry-wide budget constraints.
The planned acquisition of Chemaxon to expand into drug discovery biosimulation is a strategic move to capitalize on the growing market. The integration of AI across Certara's portfolio positions the company well for future growth. However, the challenge lies in balancing investments for long-term growth with short-term profitability, as evidenced by the increased operating expenses and net loss this quarter.
Certara's focus on integrating AI across its portfolio and expanding into drug discovery biosimulation through the Chemaxon acquisition demonstrates a forward-thinking approach. The 13% growth in software revenue underscores the increasing importance of biosimulation in drug development.
However, the company faces challenges in its services segment, which could be partly due to the shift towards software solutions. The investment in AI and new product launches, while pressuring short-term profitability, is important for long-term competitiveness. Investors should watch for the successful integration of Chemaxon and the impact of AI enhancements on future software adoption and services demand. The balance between software and services revenue will be a key indicator of Certara's strategic success in the evolving drug development landscape.
Reiterates Full Year 2024 Financial Guidance
RADNOR, Pa., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Certara, Inc. (Nasdaq: CERT), a global leader in model-informed drug development, today reported its financial results for the second quarter of fiscal year 2024.
Second Quarter Highlights:
- Revenue was
$93.3 million , compared to$90.5 million in the second quarter of 2023, representing growth of3% .- Software revenue was
$38.2 million , compared to$33.7 million in the second quarter of 2023, representing growth of13% . - Services revenue was
$55.1 million , compared to$56.7 million in the second quarter of 2023, representing a decline of3% .
- Software revenue was
- Net loss was
$12.6 million , compared to a net income of$4.7 million in the second quarter of 2023. - Adjusted EBITDA was
$26.3 million , compared to$32.4 million in the second quarter of 2023.
"Certara’s financial results were driven by strong performance in software and by improved biotech customer activity, offset by slowing demand in large biopharma customers in services," said William F. Feehery, Chief Executive Officer. “We’ve recently announced several exciting developments related to our portfolio, including product updates and new product launches, that strengthen Certara’s offering to customers in discovery, clinical, and regulatory. In July, we announced our intention to acquire Chemaxon, expanding our biosimulation portfolio to serve the drug discovery biosimulation market at scale. We’ve made continued progress in the first half of 2024, strengthening our software and integrating AI, to best position Certara as biosimulation becomes more widely used across the drug development industry."
"Our strong financial performance in software continued in the second quarter, while our services business performed slightly below our expectations. Achieving our 2024 financial targets remains the key priority while also focusing investment on our software platforms including integrating AI across our portfolio," said John Gallagher, Chief Financial Officer.
Second Quarter 2024 Results
Total revenue for the second quarter of 2024 was
Software revenue for the second quarter of 2024 was
Services revenue for the second quarter of 2024 was
Total Bookings for the second quarter of 2024 were
Software Bookings for the second quarter of 2024 were
Services Bookings for the second quarter of 2024 were
Total cost of revenue for the second quarter of 2024 was
Total operating expenses for the second quarter of 2024 were
Net loss for the second quarter of 2024 was
Diluted loss per share for the second quarter 2024 was
Adjusted EBITDA for the second quarter of 2024 was
Adjusted net income for the second quarter of 2024 was
| THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Key Financials | (in millions, except per share data) | |||||||||||||
| Revenue | $ | 93.3 | $ | 90.5 | $ | 190.0 | $ | 180.8 | ||||||
| Software revenue | $ | 38.2 | $ | 33.7 | $ | 77.5 | $ | 66.7 | ||||||
| Service revenue | $ | 55.1 | $ | 56.7 | $ | 112.5 | $ | 114.0 | ||||||
| Total bookings | $ | 98.9 | $ | 85.9 | $ | 204.7 | $ | 198.6 | ||||||
| Software bookings | $ | 41.8 | $ | 35.7 | $ | 74.9 | $ | 66.4 | ||||||
| Service bookings | $ | 57.1 | $ | 50.2 | $ | 129.7 | $ | 132.2 | ||||||
| Net income (loss) | $ | (12.6 | ) | $ | 4.7 | $ | (17.3 | ) | $ | 6.1 | ||||
| Diluted earnings per share | $ | (0.08 | ) | $ | 0.03 | $ | (0.11 | ) | $ | 0.04 | ||||
| Adjusted EBITDA | $ | 26.3 | $ | 32.4 | $ | 55.5 | $ | 64.7 | ||||||
| Adjusted net income | $ | 11.4 | $ | 18.4 | $ | 27.9 | $ | 37.7 | ||||||
| Adjusted diluted earnings per share | $ | 0.07 | $ | 0.12 | $ | 0.17 | $ | 0.24 | ||||||
| Cash and cash equivalents | $ | 224.6 | $ | 245.2 | ||||||||||
2024 Financial Outlook
Certara is reiterating its 2024 outlook, and expects the following:
- Full year 2024 revenue to be in the range of
$385 million to$400 million . - Full year adjusted EBITDA is expected to grow with expected margin to be in the range of 31 -
33% . - Full year adjusted diluted earnings per share is expected to be in the range of
$0.41 -$0.46 . - Fully diluted shares are expected to be in the range of 160 million to 162 million.
Webcast and Conference Call Details
Certara will host a conference call today, August 6, 2024, at 5:00 p.m. ET to discuss its second quarter 2024 financial results. Investors interested in listening to the conference call are required to register online in advance of the call. A live and archived webcast of the event will be available on the “Investors” section of the Certara website at https://ir.certara.com.
About Certara
Certara accelerates medicines using proprietary biosimulation software, technology and services to transform traditional drug discovery and development. Its clients include nearly 2,400 biopharmaceutical companies, academic institutions, and regulatory agencies across 66 countries.
Please visit our website at www.certara.com. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.
Such disclosures will be included in the Investor Relations section of our website at https://ir.certara.com. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
Forward-Looking Statements
This press release contains certain statements that constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, with respect to the Company’s full-year guidance and other statements about the Company’s future business and financial performance, revenue, margin, and bookings. These statements typically contain words such as “believe,” “may,” “potential,” “will,” “plan,” “could,” “estimate,” “expects” and “anticipates” or the negative of these words or other similar terms or expressions. Any statement in this press release that is not a statement of historical fact is a forward-looking statement and involves significant risks and uncertainties. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot provide any assurance that these expectations will prove to be correct. You should not rely upon forward-looking statements as predictions of future events and actual results, events, or circumstances. Actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control, including the Company’s ability to compete within its market; any deceleration in, or resistance to, the acceptance of model-informed biopharmaceutical discovery; changes or delays in relevant government regulation; increasing competition, regulation and other cost pressures within the pharmaceutical and biotechnology industries; economic conditions, including inflation, recession, currency exchange fluctuation and adverse developments in the financial services industry; trends in research and development (R&D) spending; delays or cancellations in projects due to supply chain interruptions or disruptions or delays to pipeline development and clinical trials experienced by our customers; consolidation within the biopharmaceutical industry; reduction in the use of the Company’s products by academic institutions; pricing pressures; the Company’s ability to successfully enter new markets, increase its customer base and expand its relationships with existing customers; the impact of acquisitions and our ability to successfully integrate such acquisitions; the occurrence of natural disasters and epidemic diseases; any delays or defects in the release of new or enhanced software or other biosimulation tools; failure of our existing customers to renew their software licenses or any delays or terminations of contracts or reductions in scope of work by its existing customers; our ability to accurately estimate costs associated with its fixed-fee contracts; our ability to retain key personnel or recruit additional qualified personnel; risks related to the mischaracterization of our independent contractors; lower utilization rates by our employees as a result of natural disasters and epidemic diseases; risks related to our contracts with government customers; our ability to sustain recent growth rates; our ability to successfully operate a global business; our ability to comply with applicable laws and regulations; risks related to litigation; the adequacy of its insurance coverage and ability to obtain adequate insurance coverage in the future; our ability to perform in accordance with contractual requirements, regulatory standards and ethical considerations; the loss of more than one of our major customers; future capital needs; the ability of our bookings to accurately predict future revenue and our ability to realize revenue on bookings; disruptions in the operations of the third-party providers who host our software solutions or any limitations on their capacity; our ability to reliably meet data storage and management requirements, or the experience of any failures or interruptions in the delivery of our services over the internet; our ability to comply with the terms of any licenses governing use of third-party open source software; any breach of its security measures or unauthorized access to customer data; risks relating to the use of artificial intelligence and machine learning in our products and services; our ability to adequately enforce or defend ownership and use of our intellectual property and other proprietary rights; any allegations of infringement, misappropriation or violations of a third party’s intellectual property rights; our ability to meet obligations under indebtedness and have sufficient capital to operate our business; any limitations on our ability to pursue business strategies due to restrictions under our current or future indebtedness; any additional impairment of goodwill or other intangible assets; our ability to use our net operating losses and R&D tax credit carryforwards; the accuracy of management’s estimates and judgments relating to critical accounting policies and changes in financial reporting standards or interpretations; any inability to design, implement, and maintain effective internal controls or inability to remediate any internal controls deemed ineffective; the costs and management time associated with operating as a publicly traded company; and the other factors detailed under the captions “Risk Factors” and “Special Note Regarding Forward-Looking Statements” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, and reports, including the Form 10-K filed by the Company with the Securities and Exchange Commission on February 29, 2024, and subsequent reports filed with the SEC. Any forward-looking statements speak only as of the date of this release and, except to the extent required by applicable securities laws, we expressly disclaim any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events.
A Note on Non-GAAP Financial Measures
This press release contains “non-GAAP measures” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, the Company makes use of the non-GAAP financial measures adjusted EBITDA, adjusted net income (loss), adjusted diluted earnings per share, and constant currency (“CC”) revenue, which are not recognized terms under GAAP. These measures should not be considered as alternatives to net income (loss) or GAAP diluted earnings per share or revenue as measures of financial performance or any other performance measure derived in accordance with GAAP and should not be considered a measure of discretionary cash available to the Company to invest in the growth of its business. The presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the Company’s results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.
You should refer to the footnotes below as well as the “Non-GAAP Financial Measures” section in this press release below for a further explanation of these measures and reconciliations of these non-GAAP measures in specific periods to their most directly comparable financial measure calculated and presented in accordance with GAAP for those periods.
Management uses various financial metrics, including total revenues, income (loss) from operations, net income (loss), and certain non-GAAP measures, including those discussed above, to measure and assess the performance of the Company’s business, to evaluate the effectiveness of its business strategies, to make budgeting decisions, to make certain compensation decisions, and to compare the Company’s performance against that of other peer companies using similar measures. In addition, management believes these metrics provide useful measures for period-to-period comparisons of the Company’s business, as they remove the effect of certain non-cash expenses and other items not indicative of its ongoing operating performance.
Management believes that adjusted EBITDA, adjusted net income (loss), adjusted diluted earnings per share, and CC revenue are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical periods. In addition, each of these measures is frequently used by analysts, investors, and other interested parties to evaluate and assess performance. Furthermore, our business has operations outside the United States that are conducted in local currencies. As a result, the comparability of the financial results reported in U.S. dollars is affected by changes in foreign currency exchange rates. We adjust revenues for constant currency to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations and we believe it is helpful for investors to present operating results on a comparable basis period over period to evaluate its underlying performance.
Please note that the Company has not reconciled the adjusted EBITDA or adjusted diluted earnings per share forward-looking guidance included in this press release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to costs related to acquisitions, financings, and employee stock compensation programs, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
| (1) | CC revenue excludes the effects of foreign currency exchange rate fluctuations by assuming constant foreign currency exchange rates used for translation. Current periods revenue reported in currencies other than U.S. Dollars are converted into U.S. Dollars at the average exchange rates in effect for the comparable prior periods. | |
| (2) | Adjusted EBITDA represents net income excluding interest expense, provision (benefit) for income taxes, depreciation and amortization expense, intangible asset amortization, equity-based compensation expense, goodwill impairment, change in fair value of contingent consideration, acquisition and integration expense and other items not indicative of our ongoing operating performance. | |
| (3) | Adjusted net income and adjusted diluted earnings per share exclude the effect of equity-based compensation expense, amortization of acquisition-related intangible assets, goodwill impairment, change in fair value of contingent consideration, acquisition and integration expense, and other items not indicative of our ongoing operating performance as well as income tax provision adjustment for such charges. | |
In evaluating adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share, you should be aware that in the future the Company may incur expenses similar to those eliminated in this presentation and this presentation should not be construed as an inference that future results will be unaffected by unusual items.
Contacts:
Investor Relations Contact:
David Deuchler
Gilmartin Group
ir@certara.com
Media Contact:
Alyssa Horowitz
Pan Communications
certara@pancomm.com
| CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||
| (IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) | THREE MONTHS ENDED JUNE 30 | SIX MONTHS ENDED JUNE 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Total revenues | $ | 93,313 | $ | 90,450 | $ | 189,967 | $ | 180,751 | ||||||||
| Cost of revenues | 39,809 | 36,224 | 79,064 | 71,080 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 12,213 | 8,111 | 22,900 | 16,113 | ||||||||||||
| Research and development | 9,067 | 7,888 | 21,062 | 17,175 | ||||||||||||
| General and administrative | 28,071 | 14,245 | 51,050 | 34,017 | ||||||||||||
| Intangible asset amortization | 12,743 | 10,582 | 25,336 | 21,117 | ||||||||||||
| Depreciation and amortization expense | 451 | 361 | 883 | 772 | ||||||||||||
| Total operating expenses | 62,545 | 41,187 | 121,231 | 89,194 | ||||||||||||
| Income (loss) from operations | (9,041 | ) | 13,039 | (10,328 | ) | 20,477 | ||||||||||
| Other income (expenses): | ||||||||||||||||
| Interest expense | (5,578 | ) | (5,668 | ) | (11,329 | ) | (11,143 | ) | ||||||||
| Net other income | 2,350 | 1,010 | 3,954 | 1,516 | ||||||||||||
| Total other expenses | (3,228 | ) | (4,658 | ) | (7,375 | ) | (9,627 | ) | ||||||||
| Income (loss) before income taxes | (12,269 | ) | 8,381 | (17,703 | ) | 10,850 | ||||||||||
| Provision (benefit) for income taxes | 305 | 3,675 | (446 | ) | 4,786 | |||||||||||
| Net income (loss) | $ | (12,574 | ) | $ | 4,706 | $ | (17,257 | ) | $ | 6,064 | ||||||
| Net income (loss) per share attributable to common stockholders: | ||||||||||||||||
| Basic | $ | (0.08 | ) | $ | 0.03 | $ | (0.11 | ) | $ | 0.04 | ||||||
| Diluted | $ | (0.08 | ) | $ | 0.03 | $ | (0.11 | ) | $ | 0.04 | ||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 160,505,223 | 158,955,822 | 160,014,746 | 158,568,575 | ||||||||||||
| Diluted | 160,505,223 | 159,906,972 | 160,014,746 | 159,817,688 | ||||||||||||
| CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
| (IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) | JUNE 30, 2024 | DECEMBER 31, 2023 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 224,599 | $ | 234,951 | ||||
| Accounts receivable, net of allowances for credit losses of | 90,378 | 84,857 | ||||||
| Prepaid expenses and other current assets | 22,099 | 20,393 | ||||||
| Total current assets | 337,076 | 340,201 | ||||||
| Other assets: | ||||||||
| Property and equipment, net | 2,805 | 2,670 | ||||||
| Operating lease right-of-use assets | 14,127 | 9,604 | ||||||
| Goodwill | 715,524 | 716,333 | ||||||
| Intangible assets, net of | 463,155 | 487,043 | ||||||
| Deferred income taxes | 4,236 | 4,236 | ||||||
| Other long-term assets | 2,690 | 3,053 | ||||||
| Total assets | $ | 1,539,613 | $ | 1,563,140 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,801 | $ | 5,171 | ||||
| Accrued expenses | 55,613 | 56,779 | ||||||
| Current portion of deferred revenue | 60,989 | 60,678 | ||||||
| Current portion of long-term debt | 3,000 | 3,020 | ||||||
| Other current liabilities | 4,720 | 4,375 | ||||||
| Total current liabilities | 129,123 | 130,023 | ||||||
| Long-term liabilities: | ||||||||
| Deferred revenue, net of current portion | 1,190 | 1,070 | ||||||
| Deferred income taxes | 37,524 | 50,826 | ||||||
| Operating lease liabilities, net of current portion | 11,150 | 6,955 | ||||||
| Long-term debt, net of current portion and debt discount | 293,683 | 288,217 | ||||||
| Other long-term liabilities | 23,542 | 39,209 | ||||||
| Total liabilities | 496,212 | 516,300 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity | ||||||||
| Preferred shares, | — | — | ||||||
| Common shares, | 1,618 | 1,603 | ||||||
| Additional paid-in capital | 1,201,009 | 1,178,461 | ||||||
| Accumulated deficit | (133,487 | ) | (116,230 | ) | ||||
| Accumulated other comprehensive loss | (8,328 | ) | (7,593 | ) | ||||
| Treasury stock at cost, 882,883 and 436,615 shares at June 30, 2024 and December 31, 2023, respectively | (17,411 | ) | (9,401 | ) | ||||
| Total stockholders' equity | 1,043,401 | 1,046,840 | ||||||
| Total liabilities and stockholders' equity | $ | 1,539,613 | $ | 1,563,140 | ||||
| CERTARA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
| SIX MONTHS ENDED JUNE 30 | ||||||||
| (IN THOUSANDS) | 2024 | 2023 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (17,257 | ) | $ | 6,064 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization of property and equipment | 883 | 772 | ||||||
| Amortization of intangible assets | 32,142 | 26,286 | ||||||
| Amortization of debt issuance costs | 749 | 765 | ||||||
| Loss on extinguishing debt | 196 | — | ||||||
| (Recovery of) provision for credit losses | 807 | (172 | ) | |||||
| Loss on retirement of assets | 13 | 29 | ||||||
| Equity-based compensation expense | 18,856 | 12,153 | ||||||
| Change in fair value of contingent considerations | 5,661 | 2,559 | ||||||
| Lease abandonment expense | 29 | — | ||||||
| Deferred income taxes | (13,415 | ) | (10,237 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (6,606 | ) | (272 | ) | ||||
| Prepaid expenses and other assets | (305 | ) | 494 | |||||
| Accounts payable, accrued expenses, and other liabilities | (8,305 | ) | (8,343 | ) | ||||
| Deferred revenues | 662 | (2,083 | ) | |||||
| Net cash provided by operating activities | 14,110 | 28,015 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (1,046 | ) | (588 | ) | ||||
| Capitalized software development costs | (8,651 | ) | (6,270 | ) | ||||
| Investment in intangible assets | — | (54 | ) | |||||
| Business acquisitions, net of cash acquired | — | (7,550 | ) | |||||
| Net cash used in investing activities | (9,697 | ) | (14,462 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from borrowings on term loan debt | 6,305 | — | ||||||
| Payment of debt issuance costs | (1,216 | ) | — | |||||
| Payments on long-term debt and finance lease obligations | (755 | ) | (1,535 | ) | ||||
| Payments for business acquisition related contingent consideration | (10,426 | ) | — | |||||
| Payment of taxes on shares withheld for employee taxes | (8,010 | ) | (5,735 | ) | ||||
| Net cash provided by (used in) financing activities | (14,102 | ) | (7,270 | ) | ||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (663 | ) | 2,239 | |||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (10,352 | ) | 8,522 | |||||
| Cash, cash equivalents, and restricted cash, at beginning of year | 234,951 | 239,688 | ||||||
| Cash, cash equivalents, and restricted cash, at end of year | $ | 224,599 | $ | 248,210 | ||||
| NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| The following table reconciles net income to adjusted EBITDA: | ||||||||||||||||
| THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income (loss)(a) | $ | (12,574 | ) | $ | 4,706 | $ | (17,257 | ) | $ | 6,064 | ||||||
| Interest expense(a) | 5,578 | 5,668 | 11,329 | 11,143 | ||||||||||||
| Interest income(a) | (2,486 | ) | (2,210 | ) | (5,060 | ) | (3,564 | ) | ||||||||
| (Benefit from) provision for income taxes(a) | 305 | 3,675 | (446 | ) | 4,786 | |||||||||||
| Depreciation and amortization expense(a) | 451 | 361 | 883 | 772 | ||||||||||||
| Intangible asset amortization(a) | 16,146 | 13,173 | 32,142 | 26,286 | ||||||||||||
| Currency (gain) loss(a) | 104 | 1,120 | 980 | 2,014 | ||||||||||||
| Equity-based compensation expense(b) | 9,783 | 3,610 | 18,856 | 12,153 | ||||||||||||
| Change in fair value of contingent consideration(d) | 2,783 | 1,298 | 5,661 | 2,559 | ||||||||||||
| Acquisition-related expenses(e) | 1,073 | 692 | 2,787 | 1,884 | ||||||||||||
| Integration expense(f) | — | 55 | — | 157 | ||||||||||||
| Transaction - related expenses (g) | 2,753 | — | 2,753 | — | ||||||||||||
| Severance expense(h) | 183 | — | 183 | — | ||||||||||||
| Reorganization expense(i) | 2,163 | — | 2,214 | — | ||||||||||||
| Loss on disposal of fixed assets(j) | 13 | 25 | 13 | 29 | ||||||||||||
| Executive recruiting expense(k) | 43 | 200 | 423 | 396 | ||||||||||||
| Adjusted EBITDA | $ | 26,318 | $ | 32,373 | $ | 55,461 | $ | 64,679 | ||||||||
The following table reconciles net income to adjusted net income:
| THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income (loss) (a) | $ | (12,574 | ) | $ | 4,706 | $ | (17,257 | ) | $ | 6,064 | ||||||
| Currency (gain) loss(a) | 104 | 1,120 | 980 | 2,014 | ||||||||||||
| Equity-based compensation expense(b) | 9,783 | 3,610 | 18,856 | 12,153 | ||||||||||||
| Amortization of acquisition-related intangible assets(c) | 13,342 | 11,259 | 26,690 | 22,515 | ||||||||||||
| Change in fair value of contingent consideration(d) | 2,783 | 1,298 | 5,661 | 2,559 | ||||||||||||
| Acquisition-related expenses(e) | 1,073 | 692 | 2,787 | 1,884 | ||||||||||||
| Integration expense(f) | — | 55 | — | 157 | ||||||||||||
| Transaction - related expenses (g) | 2,753 | — | 2,753 | — | ||||||||||||
| Severance expense(h) | 183 | — | 183 | — | ||||||||||||
| Reorganization expense(i) | 2,163 | — | 2,214 | — | ||||||||||||
| Loss on disposal of fixed assets(j) | 13 | 25 | 13 | 29 | ||||||||||||
| Executive recruiting expense(k) | 43 | 200 | 423 | 396 | ||||||||||||
| Income tax expense impact of adjustments(l) | (8,273 | ) | (4,602 | ) | (15,362 | ) | (10,097 | ) | ||||||||
| Adjusted net income | $ | 11,393 | $ | 18,363 | $ | 27,941 | $ | 37,674 | ||||||||
The following tables reconciles diluted earnings per share to adjusted diluted earnings per share:
| THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (In thousands except share and per share data) | ||||||||||||||||
| Diluted earnings per share(a) | $ | (0.08 | ) | $ | 0.03 | $ | (0.11 | ) | $ | 0.04 | ||||||
| Currency (gain) loss(a) | — | 0.01 | 0.01 | 0.01 | ||||||||||||
| Equity-based compensation expense(b) | 0.06 | 0.02 | 0.12 | 0.08 | ||||||||||||
| Amortization of acquisition-related intangible assets(c) | 0.08 | 0.07 | 0.17 | 0.14 | ||||||||||||
| Change in fair value of contingent consideration(d) | 0.02 | 0.01 | 0.03 | 0.02 | ||||||||||||
| Acquisition-related expenses(e) | 0.01 | 0.01 | 0.02 | 0.01 | ||||||||||||
| Integration expense(f) | — | — | — | — | ||||||||||||
| Transaction - related expenses (g) | 0.02 | — | 0.02 | — | ||||||||||||
| Severance expense(h) | — | — | — | — | ||||||||||||
| Reorganization expense(i) | 0.01 | — | 0.01 | — | ||||||||||||
| Loss on disposal of fixed assets(j) | — | — | — | — | ||||||||||||
| Executive recruiting expense(k) | — | — | — | — | ||||||||||||
| Income tax expense impact of adjustments(l) | (0.05 | ) | (0.03 | ) | (0.10 | ) | (0.06 | ) | ||||||||
| Adjusted Diluted Earnings Per Share | $ | 0.07 | $ | 0.12 | $ | 0.17 | $ | 0.24 | ||||||||
| Basic weighted average common shares | 160,505,223 | 158,955,822 | 160,014,746 | 158,568,575 | ||||||||||||
| Effect of potentially dilutive shares outstanding (m) | 961,455 | 951,150 | 925,274 | 1,249,113 | ||||||||||||
| Adjusted diluted weighted average common | 161,466,678 | 159,906,972 | 160,940,020 | 159,817,688 | ||||||||||||
The following tables reconcile revenues to the revenues adjusted for constant currency:
| THREE MONTHS ENDED JUNE | Change | ||||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | |||||||||||||||||
| Actual | CC | Actual | Actual | Actual | CC Impact | Adjust for CC | |||||||||||||||||
| (GAAP) | (non-GAAP) | (GAAP) | (GAAP) | (GAAP) | (non-GAAP) | (non-GAAP) | |||||||||||||||||
| (in thousands except percentage) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Software | $ | 38,207 | $ | 38,267 | $ | 33,723 | $ | 4,484 | 13 | % | $ | 60 | 13 | % | |||||||||
| Services | 55,106 | 55,019 | 56,727 | (1,621 | ) | (3 | )% | (87 | ) | (3 | )% | ||||||||||||
| Total Revenue | $ | 93,313 | $ | 93,286 | $ | 90,450 | $ | 2,863 | 3 | % | $ | (27 | ) | 3 | % | ||||||||
| SIX MONTHS ENDED JUNE 30, | Change | ||||||||||||||||||||||
| 2024 | 2024 | 2023 | $ | % | $ | % | |||||||||||||||||
| Actual | CC | Actual | Actual | Actual | CC Impact | Adjust for CC | |||||||||||||||||
| (GAAP) | (non-GAAP) | (GAAP) | (GAAP) | (GAAP) | (non-GAAP) | (non-GAAP) | |||||||||||||||||
| (in thousands except percentage) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Software | $ | 77,514 | $ | 77,282 | $ | 66,728 | $ | 10,786 | 16 | % | $ | (232 | ) | 16 | % | ||||||||
| Services | 112,453 | 112,057 | 114,023 | (1,570 | ) | (1 | )% | (396 | ) | (2 | )% | ||||||||||||
| Total Revenue | $ | 189,967 | $ | 189,339 | $ | 180,751 | $ | 9,216 | 5 | % | $ | (628 | ) | 5 | % | ||||||||
| (a.) | Represents amounts as determined under GAAP. | |
| (b.) | Represents expense related to equity-based compensation. Equity-based compensation has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy. | |
| (c.) | Represents amortization costs associated with acquired intangible assets in connection with business acquisitions. | |
| (d.) | Represents expense associated with remeasuring fair value of contingent consideration of business acquisition. | |
| (e.) | Represents costs associated with mergers and acquisitions and any retention bonuses pursuant to the acquisitions. | |
| (f.) | Represents integration costs related to post - acquisition integration activities. | |
| (g.) | Represents costs associated with our public offerings that are not capitalized, as well as debt issuance costs that are not deferred or treated as a contra-liability directly deducted from the carrying value of the associated debt liability. | |
| (h.) | Represents charges for severance provided to former executives. | |
| (i.) | Represents expense related to reorganization, including legal entity reorganization and lease abandonment cost associated with the evaluation of our office space footprint. | |
| (j.) | Represents the gain/loss related to disposal of fixed assets. | |
| (k.) | Represents recruiting and relocation expenses related to hiring senior executives. | |
| (l.) | Represents the income tax effect of the non-GAAP adjustments calculated using the applicable statutory rate by jurisdiction. | |
| (m.) | Represents potentially dilutive shares that were included from our GAAP diluted weighted average common shares outstanding. |
FAQ
What was Certara's revenue for Q2 2024?
How did Certara's software and services segments perform in Q2 2024?
What is Certara's full-year 2024 revenue guidance?
How did Certara's net income change in Q2 2024 compared to Q2 2023?
