CERT - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Certara Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Deuchler of Investor Relations. ahead. go Please

David Deuchler

Thank call. everyone. for in participating Good you conference today's afternoon, all

On William we Officer; Certara, the from call have Gallagher, Financial and Chief Feehery, Officer. John Executive Chief

full released results Copy Certara the is company's release on press December today, Earlier of for the XX, year financial XXXX. the website. available ended

find implied I actual to during or management non-GAAP remind to begin, press which that the includes the results can company's call those the this questions, differ in may forward-looking In mention that measures website. from most management directly some we website. the financial additional you Please Slide measures comparable measures. Investor available Before earnings the and statements. you would these recent like statements, on GAAP may materially accompanying information, statements in non-GAAP the refer Relations of release to remarks and will in X are forward-looking make on responses materials financial available company's expressed Reconciliations to for the

[indiscernible] today, as the any XX, refer new update financial as accompanying information. statements, additional because of future for forward-looking accurate contains whether in live revise and conference tables of required information, call the by broadcast Please law, materials or This time-sensitive Certara only except the XXXX. information reconciliation any or to obligation, is February otherwise. to projections or events

to the turn over will William. I call that, with And

William Feehery

then strong take results Thank November. Earnings software Fourth John services were begin Call. the Thank we remarks, consistent with pleased as will to we in with commercial across execution you, Quarter both and financial We and we for outlined your Good with David. expectations and afternoon, deliver Year finish will XXXX the questions. everyone. and Full you Certara's I joining prepared year

prior year, million, XX% We XX%. bookings driven XX% quarter services of of versus the reported bookings software million growth of The represented $XXX.X finished a of with growth X% growth revenue Star's versus XXXX and representing growth $XXX.X XXXX. fourth bookings by

we performance development from our healthy fourth their developers and the to biosimulation as optimize the Tier a use drug biosimulation quarter, around software to During processes. saw world Tier and customers continue X X services bookings

services which had a return our a good solid quarter, Additionally, growth. delivering business regulatory represented bookings, to

by and We XXXX are finish our focused now goals. executing encouraged the strong our to year on are squarely

probability of and to insights is to Bio X includes uses commercialization. phase are while population component simulation understand simulation development a market, models accomplished a and Phoenix and is an in drug PinnacleXX, At MIDD Model-Informed is the which increase tool biosimulation costs. key biological Drug the in or global biological body uses human preclinical approach Certara, and enabling development of development or derived MIDD, and statistical the of a discovery, biopharmaceutical in drug industry. that to of critical inform that a drug processes action in decision-making computer-aided systems platform, mathematical clinical data from success we humans and property can brings pillars: decreasing also in most a new of Chemaxon, recent this bringing a which data which MIDD the software, development. our Simcyp-TBPK our PK/PD software to through software, our We chemical acquisition, standardization discovery of drug MIDD

drug as customers cautious uncertainty. funding they our grapple behavior spending Medicare to geopolitical price negotiations exhibit and XXXX, In with continue constraints

be and continue demand through particularly environment, internal to the grow our to predictable, while services. to customers. Decision-making was time due for lines challenging continued discussions business less were our software elongated at regulatory Our in services

and expectations. services slightly bookings During uncertainties, ahead the despite fourth market quarter, our were of our team end well software executed that driving

into XXXX. end our in sentiment our markets to customer different change us While any that see performance. suggests we heading did that are with We pleased are not materially

guidance such, spending. be that assume will ranges similar As to for year our R&D clinical a XXXX XXXX

investments and past strategic industry. to the position take preferred for time goals partner progress to to as mind: global our into a our updates; and XXXX. we software, of Certara a intelligence platform. R&D like of the I'd our the discuss Certara over to software some Now integration Certara In of we accelerate vision biopharmaceutical steps enhance begin XXXX, made existing generative expand to in in the infrastructure took year. to Throughout artificial new three products with into development to products; integrating process product in unified the and

we relationships writing Another focus product. example as as of and was area we our coauthor key this our We strategic seek the from our feedback customers. was commercial account strengthen of regulatory from such successful marketing investment top quarter began positive the XXXX second team, received among early during added managers coauthor users. talent to launch senior-level where One initial

product uses to also projects. launch team effort. our services regulatory increase efficiency We marketing development coauthor and sales a and regulatory team successful Our calibrated to in attribute the their writing

the Beyond on internal successfully and Biomass Chemaxon Prometic the and or [ we investments, ] of organization, in Applied acquisition completed into of October integrating ABM, focused we XXXX.

in the seamlessly which integrated QSP Cancer. During successful with Certara a umbrella, leading team, the ABM's a first was that the XXXX, project team included year Nature to published Satara under

combined that to positive additional customers. our Medic user were XX For products our receiving efficiencies with Pinnacle fraud bringing feedback software and complementary offering, quickly

throughout to of allowed We as $XXX,XXX. Chemaxon these with more companies us And which the can had alongside we scale. customers, customer recently, leveraged life of X,XXX to a to Certara to December of cutting-edge we over our existing an XXX to growth see suite software synergistic as has over be brings enter Chemaxon insights investments sciences these selection value the contract XX% customers lead candidate discovery biosimulation software base at drug the products, And discovery, expanded of bring XX. optimization. highly more began market representing XXXX. Among annual impact year. than and

value contract versus an of annual with million, more customers XXXX. XX than customers had which grew in $X also We XX

Despite investments at initiatives world backdrop, around which market strategy Certara. companies the biosimulation, turbulent biopharma growth expanding strategic is attributed a are use and their Our to of be can working. the

is ahead even XXXX, to can position our growth. be development plan Satara further to we initiatives. the best for done product Looking in investments future accelerate there that make in This to year, more software

will artificial priority development be products discovery main of capabilities software phase, Our the optimization Certara existing for and the Chemaxon's leveraging technologies lead and alongside intelligence.

clinical differentiated unique for the with products into with that phase and Drug Certara the the discovery significantly can of impact believe large been that insights market have predictive associated products that whereas to a addressable rate the our development. and We analysis on technology focused discovery potential develop represents we bring historically will stages. success drug and will cost be MIDD,

of In addition and biosimulation invest including and to in features, QST cutting-edge software, prediction. the to Discovery, ad we areas new [ meat ] models will continue property

elevating to Cloud. we platform on continue integrated by the Outside of Certara development, an new building products focus product software new to will

because We X,XXX we of example commercial experts cited XXXX, researchers which several tremendous to are XXX list and scientist In over our with members ability recent our leading continue XX were prioritize more confident developers, We XXXX, expertise the commercial our to software most scientific the hiring of team in of year of with the execute than employees, degrees. team's senior includes top and ranking including our X% An ended and manner R&D in talent. inclusion team. globally. top Stanford extreme goals our list. Elsevier's named advanced colleagues in was the subject

approval development XXXX. outlining Certara's of of strategies impact team I of processes. researchers in and and contributed on streamline execution during and biosimulation our accomplishments to the continued year. looking the drug forward of the XXX to application past and publications over I'm technologies proud showcasing to the submission am the success drug different

a of wanted our provide wrapping the writing to brief I regulatory review on up, update Before business. strategic

nicely, Our on review are we outcomes process our strategy. potential and impact internal evaluate has go-forward progressed continuing to and their

any We be not making will the review decision have any made comments regarding call. on further not this as

we'll We decision soon near have expect and additional as the to details a share we as reach them. plan to term, in

quarter. leverage transactions performance enhance in competitive Certara the made the investment execution was fourth as strategic services, In positioning. we organic across and software to had past solid has our driving important summary, commercial Progress we very and successful year over

a subdued adoption has While number invest our strong, XXXX, of using customers the basis, technology historical in performance been In our to we offering. the markets the breadth which exemplified of of our end our biosimulation expand scale. software the remains by on of at software increasing remain business to continue will and

advance forward, With to to and to in hand more opportunities well greater discuss positioned biosimulation unlocking I to and excited beyond. in growth John commercial results over detail. things XXXX will continue for leaving financial that, our I'm us

John Gallagher

everyone. Hello, William. you, Thank

XXXX, of December XX our performance representing presentation, fourth revenue our basis. full through highlight year. XXXX quarter walk guidance, a provides and I to the the for our XX, color Before basis organic wanted currency XX% of Slide I results was ended for which $XXX.X X Total financial revenue million, in on year-over-year a the and and reported on on accompanying constant growth months

For $XXX.X total year-over-year the full currency X% year million, a of on X% basis. representing constant was and reported XXXX, of a revenue on growth basis

million, XX% Total were basis. XX-month a bookings on quarter on fourth period $XXX.X reported from million, increased basis. $XXX.X a the prior reported increasing which year bookings were XX% Trailing in the

a year XX. over period quarter, basis. currency Pinnacle reported on Software Organic by in in quarter constant the and which the revenue a the fourth was was basis and $XX.X software on biosimulation million driven XX% prior growth increased

which our software and the to quarter Additionally, period. accounted $X.X Chemaxon our million year contributed revenue of down from in subscription expectations. of ahead reported XX% Ratable in for fourth XX% prior revenues, came revenue,

a by decrease driven software. in Chemaxon, term was subscription mix mix higher license has of which The

XX% revenue up basis full XX% currency was and year $XXX.X for software basis. reported on from Ratable in a constant accounted XXXX. which year, revenues, software million, full the subscription For grew a and XX% on revenue of

include XX% the Software fourth Fourth the quarter, bookings $XX of period. million prior million in bookings year were quarter which booking. increased from Chemaxon $XX.X

software year, XXX% rate long-term in growth up and XX-month XX% our software were was which consistent the is $XXX.X XXX% Trailing the quarter bookings with net retention year-over-year. profile. The million, on

the software Tier software. continued we X Looking performance adoption both very and of by Tier in driven X our throughout at Tier saw strong and by year, full a in our fourth bookings customers quarter the performance

the basis million prior up a period versus Now quarter, turning on year on to in basis. currency reported fourth $XX.X and a revenue, X% constant services the was which

of our customers. Our recover following business among to has spending a services continued period cautious

compared XXXX XXXX. grew fourth million For quarter Technology-driven and compares regulatory revenue to services increased services the prior were the services $XX.X to bookings which in tiers. $XX.X X $XX.X with million, million, $XXX.X in on full Trailing was growth services up of basis year. from our reported year, as In which the constant double-digit XX-month saw revenue biopharma currency a XX% biosimulation which writing includes the million, all year period. in X% we in customer the were across a million, $XXX.X Services quarter, bookings basis. X% growth of bookings revenue on prior

Biosimulation in services bookings the low X Tier in XX. strongest growing were

services growth Regulatory grew year, up bookings mid-single X. in versus Tier declines XX% fourth the driven For biosimulation solid offset X Tier full prior X and moderately quarter, period, returned in and bookings year in the that the were by to writing by bookings digits

increase employee-related the of was in fourth million the costs XXXX, $XX.X million, declined quarter $XX.X digits. capitalized of fourth an primarily XXXX of from For year, higher the bookings for Total increase the and revenue regulatory full software an amortization. in due double quarter in to cost

$XX.X to from $XX.X primarily million of and by decrease Total XXXX, versus the software $XX.X value a fourth and fourth In fair operating due million quarter which seen the expand in in good development a initial the where were contingent was of marketing the made amortization. accelerate year investments prior million, and we for period. the research development in XXXX to XXXX consideration have we intangible efforts, quarter of expenses expense success. in asset a offset and change decrease higher sales

our software. plan to new continue development to and R&D in further discussed, Bill we integrate product XXXX in investing As drive

and EBITDA with and moderate XXXX. quarter in expectations. XXXX from fourth the sales $XX.X expect in quarter line quarter million, margin in $XX.X of in growth marketing EBITDA million XX%, increase Adjusted We in the Adjusted the was was our an in of XXXX. G&A fourth to

million to income in million representing XXXX, last some discussed the of compared reprioritized XX%. up better quarter cost year, margin we a full and our end of investments in for a Alongside taken of $X.X sales was to the marketing quarter, of adjusted actions As income of EBITDA with for markets. Wrapping million $XXX.X of align XXXX. XXXX statement. loss in earlier the the fourth our net $XX.X fourth Net I delivered we quarter

of of $XX.X income million earnings XXXX for Diluted million fourth to Reported a $X.XX last $X.XX earnings XXXX. compared fourth per share to quarter per of XXXX. for XXXX of $X.XX of in XXXX the year. quarter the of diluted quarter was quarter in of per for the the Adjusted compared $XX.X adjusted share the net loss fourth to was quarter was fourth fourth share for quarter compared fourth the $X.XX

to Moving We equivalents. quarter the sheet. the with cash in cash million finished balance $XXX.X and

of million our revolving outstanding term full of As credit XXXX, on facility. December loan availability $XXX.X under borrowings XX, had we and our

XXXX. walk our Now would you like to I full for methodology year through guidance

what observed to guidance previously, discussed end that our similar Bill markets As XXXX be XXXX. in in assumes we will

markets, guidance. into in factored which are have several We our XXXX developments our monitoring

discussed XXXX, deal. between and our exposure modest than Which the to impact widened was some have Among spending of cliffs, commercial businesses. IRA customers, when for patent and anticipated. varying slower X our activity a of to throughout which levels funding X resulted saw a software capital customer our company's both has based to each services As the gap close our we Tier we in deploy team were on we and relative impending previously, received customers when able Tier

XX% to year. end revenue with Our we of guidance $XXX growth trends assumes assumptions, continue these in $XXX of total million, X% the XXXX. through to these compared range will of the representing this million in expect Factoring

Chemaxon to million $XX contribute $XX of expect million. to We revenue

guidance be margin XX%. We expect to of progresses. in at a XX% a lower commercial EBITDA year anticipate our investments revenue adjusted our margins and at year, we EBITDA margin research EBITDA to guidance will This on our end lower performance managed the the development, the Similar revenue which between and of last based higher end by will guidance. driven discretionary as higher our be

and range the to $X.XX in share, to million now will per million of EPS adjusted tax over in the back range fully rate William of a in to I Feehery our $XXX remarks. expect We shares diluted of turn range XX% $XXX for $X.XX call CEO, the the XX%. to closing

William Feehery

growth To be we profitability John. open focused today, developments our we pleased many exciting the at you, and the remain Certara in our There's biosimulation innovative questions? a can on Thank about goals at with quarter executing the message are advance in with line our summarize as fourth to technologies. excited and XXXX. Operator, for Certara please lot you

Operator

[Operator Instructions].

coming be will Jeff Garro question Stephens first of Our from Corp.

Jeffrey Garro

kind several end off start the typical question up what the of maybe strong end further guidance? the help on result the Maybe low understand market high to kind end Yes. you And the gets pretty of just XXXX revenue a of us balanced or fronts. range? on the of And against bookings QX is view

John Gallagher

fourth attribute the quarter Jeff, to with the start execution it's by we mean, first. and part results, performance the pleased John. were team. last the I'd I with we

building end know, through remains the we've to the pretty and see happy been markets. commercial year, of we in in face team as the QX execution what were So the you challenging

So on end us coming end. or back to what also would you back to brings the comes high what too. the the to your bring low question markets, That end

patterns to by well bookings. customers, that and as at at we just when X us bring firms, them think layoffs portfolio those prioritization our for taking are to decision-making new look spending we Tier longer continue then looking see I in on at impacted as

that dynamic Xs XXXX. a in seen with Tier that's we've So

finding year environment longer we've that at we X. then Tier pull-through but last in when dynamic the QX we You saw -- Similarly, the taken some biotech, XXXX. continue did biotechs see once to funding past. look progress we in decision-making are the the despite for that execution, on you in are that than has in it's expect the And the seen or what the and results funded,

when then saw would from end. we if if we'd higher obviously or then so some in improvement in those at end range. deterioration see And markets, be the And I some take that you the we XXXX, together, were of lower think where end that push us we all the

Jeffrey Garro

hit commentary Understood. help a more That give XXXX looking you're you the integration could existing of technology and in side side. us really also the the to whether to building just incremental on helps. guidance scalability And investments Maybe maybe a to discovery the on or your with just EBITDA R&D make or in product to in assets us profitability little further what Chemaxon, the more understand that's purely investments related space. out

John Gallagher

Jeff. Thanks, Yes.

be you portfolio calling does well about with AI. observed. as we're That margin the And we've necessary investment for and investment. momentum to Yes, the software talking XX% XX% seen represent the between as we've some the investment and additional to strong said So had the continue to been as in

seeing to you're what is us so it And make and investment XXXX. the making in that in continuing margin

be component of were other a QX to Chemaxon obviously, the our we're on expect beginning working Chemaxon on thrilled year, say, in going the starting is we 'XX. QX in is of The we integration Chemaxon year of business at the We QX on I'd it But and having just it, too, into margins. modest bring but and now brought and piece exiting this Chemaxon. the is to throughout

Operator

of next will question be from Leerink Our Partners. coming Michael Cherny

Michael Cherny

a the to put little I if can market. about fully trajectory talk relative the place Maybe outlook. in understand quarter dynamics the the you in I bit just and tough the

Bill, about You but the a see little perspective? highlighted very share Can give what data wallet points, the from you driven you're bookings bit seeing color, strong through and guidance, as the customers' think quarter. in the how deals. think came I garner that do what's all we quarter wallet? a But of more you is underlying your through you much of to in bigger formats you think large being able of some the a piece both it the

William Feehery

the for question. Thanks Yes.

an there's of element that think I in there.

of we're in but of Pinnacle which whole We team, parts new I go of XX, we in were available got to that's the Like company now. are I to sales think last invest, products about. right -- to products, there of this I of which there was customers the we're kind have in as a taking there's of in maybe wasn't investment some in, investments the additional the and of of of them of Simcyp updates execution think, invested into years them. chunk the core and several led like as terms as kind for reasons fourth couple we're that that well around and XXXX, you're up very continuing feedback themselves with, pharma from fourth lot in good a making us of bit to us why new models few what a John had products think addressable the little just share invest resulted our where quarter. bookings we're over quarter have or have said, it to from I in the careful talking by do products more some in positive one mean, particularly think, taking the in to opening I as opportunity front we continue AI emphasizing software suite like the tremendous into doing in us and And

Michael Cherny

one. I kind picture question, then an of important guess And but another big

administration, do based relative new public opportunities the incoming But all confirmations people's new waiting risks what least backgrounds the and on through as see where administration to to the commentary, see we're at think you in? obviously, As you the coming lie.

William Feehery

getting we get since like is figuring was I that questions them. Yes. would everybody

out watching some But potential that. think or to risks right any be watching opportunities say some pronouncements I that all as in pretty are make new, discussed. kind have out just see being carefully. well what's There you'd before as we are potential are plans think how it's we're of to fair, things and to settle now, I we

Operator

Max from coming be Smock William will question of next Blair. Our

Christine Rains

on Max. Christine Rains It's for

biotech pharma the to cohorts drivers of you behind noticed a XQ wondering between can reflection you if leading we pharma your So large demand net speak we've is there in rate the just the change downtick any overall while. Hoping more in has expectation your if comment software seen down large in choppy to both this? retention lowest in win the been tick indicators little rate, broadly, in XXXX. can the for delta And and demand. on and strength in growth a if small And

John Gallagher

question. your for Thanks Yes.

retention full net was rate million. the was $XXX year million. So $XXX XQ for The

So we it year do was point, Tier QX attribute your in full lower to a it do, We on customer basis. that X to than patterns. spending was

sort decision-making, reductions So lower those on slower -- before renewals of and the guidance, was when guidance. reprioritization, upper then, a Pinnacle. impacted Phoenix end patterns, to or to and the the of in of describing have extent, And portfolio when the all, in some our customer I end spending extent, headcount product lesser

So there there. is dynamic a

X Tier on we've biosim customers. Tier -- seen Alternatively, on then strong Xs, and on the performance services, both specifically the software services

Christine Rains

That was helpful really commentary.

Just growth a organic XXXX bit more little and digging expectations. into

the about midpoint from year. XXXX. think like implies $XX then XXXX is growth in I in year, total midpoint, in contribution So organic in versus your about this of in X/X implies Chemaxon of That this million inorganic million guide The X% about X.X% revenue around inorganic. $XX which if

last think same is way year. that First, you're wondering you expecting be year. just environment right this about this the organic this year And growth the versus if the mentioned to to

we think organic midpoint or around X% versus So X%. behind guide should X% drivers this the calling delta year growth of how to for about about in the

John Gallagher

Yes.

growth. reported organic to X%. would said organic think it, X% to based to be growth guidance, the So so X% guide cut through on that our underlying The the was we XX% I

Christine Rains

expectation organic demand about and a really step step then the X% you the in so there the stable to behind up That's think given kind drivers how do relatively your given for environment. XXXX, And helpful. up Great. Okay. X%, rate growth of the versus

John Gallagher

Right.

in there services, within drivers within low a to of embedded underlying laid which XXXX, out decline is and key where a the flat in regulatory our we is our business I we've digits. reg guide had think that's assumption one single

Operator

David will Jefferies. Windley next from coming from Our question be

David Windley

wanted the the on of Chemaxon kind How would ad? guidance should think much questions. we the to margin differential possible quantify I how to how follow margin inorganic much about margin that? be or the from alternatively Chemaxon it John, drag in

John Gallagher

Yes.

So Dave, half that way is about to the off Chemaxon, about related incremental to think down related other by that basis XXX Approximately XXXX of of and we points. half is the is stepped to investments.

David Windley

Okay. to And perhaps then maybe discovery more broadly from landscape that position it PK/PD in And on is PB/PK on your Chemaxon. for What's has space? the and Chemaxon how that different capabilities competitive the that in competitive

William Feehery

Yes. fragmented. is discovery space The Thanks, pretty David.

both and Chemaxon chemical some predictors a large cover then that get of of cycle, analyze also searching and the make that have tools they So into a suite test design things they like has tools chemicals. for have suite other databases

really. not not have So but -- second a competitors, And there's those like out the all there's there, are I a guess embedded they industry. individual like Chemaxon across

David Windley

see cloud. of your of to your a the I Okay. And think, the go little acquisitions or then back cases out a if is buy we how these the client I benefit of synergistic course, also you to of, that portfolio in think say, investment has portfolio of helping 'XX, terms in even, kind and, underpinnings if some broaden in for one can Pinnacle acquisition bit, build the I of but of kind do data across of MIDD enable to showing formatic, simulation your Pinnacle better pioneer and evolving? its you those is with as using up development? see intensive you essentially to benefits make model-informed helping XX their client approachable, kind more to better to -- the maybe those and more and kinds manage interacting possible it that kind case use Do drug clients helping of of own capabilities,

William Feehery

smaller while, working for That's in in We've biosimulation, know, Yes. long the but you within been known a a question. -- we've for space, smaller a and known we're in pharma. we're as time been groups on great known

in of drawn the and an where plans development apply think lot multiple platform of the creating a I and news can integrated has stages reality attention. starting this So drug you across the discovery

investment together. we Certara have Cloud. pull pointed pretty a made But tools as go still we to Now forward with good you of make as these to out, all start we've

helping levels that's continue. I our senior of -- And think think the intend to more as at mean that's pharma. I we that's And discussions plan based I

a we we integrated So platform want process add lot finish. to great more and development whole a I to tools you've value tools, that, from a it a across we'll we've think if from great where And but take more as start got -- we'll a great accomplish the to of value. we lot molecule capture

David Windley

and And than Right. leverages second time maybe SG&A half. was maybe the answer investments question half talked a the that last for pressured were evolving R&D more at time, this a is, think that about I at in we talking me about that year, first last to cloud approach

about of on you're capabilities as investors probably before margin thought be I what of evolving things about pressure you and half adding come weathered How a additional go-forward think What think of additional we that? some get that might might second of your some like toward reasonable in and platform call, margin is margin 'XX kind think surprise. think duration should might in step-off the, excess as you investment point I the the there? to and the kind investment pressure was 'XX and

William Feehery

is So significant rate this that, can margin. way there if opportunity we a good we years. and for put is up that is we've quite a profits growth those few a is of software. high profit But some over growth think can Satara take to we a demonstrated we run the I to I next here, opportunity at the -- the think there's the think profitable And company our do back into and growing the plan of company, about

of to answer pipeline points a your are -- it's like got coming. precision we've because decimal some products So hard looks question, a of price

several coming this new things year. have We out

out look have not, of you then kind basically what things new in that pipeline and features, around pour X we'll that's into regular hope go get slated to back after it things to be existing I'm how just where did XXXX. a I've we to products. that probably a to and not want telling there years And got X upgrades we that are right situation I a do plan our as out will we and out. features, and I'm of us a or AI-enabled is So lead of starting that products other mean We XXXX, I cadence about for years going guess coming money And that's that in go? runs hey, after now now. sit see, some right? like that

So to to revenues we expecting we're we're them as go from see going along.

Operator

Instructions]. [Operator

will Securities. Our Davides from Citizens next come question of Constantine

Constantine Davides

highlight more Chemaxon ramp or the Just think there year. call just the I the in the quarter pretty that strong is that modeling of mindful Is John, follow-up. there kind I margin if typically guess the like cadence you'd software quarterly standpoint guess else thinking for in that of in to first obviously, ,just asset from But steps be quarter of a of way of XXXX. quarterly you'd we tailwinds headwinds terms does. out anything from progression? of one first, you And fourth into terms I'm throughout anything that should that down

John Gallagher

the us weighted to see when quarter. continues I second and seen would this does half, that in we think you I historically half out case us expect play the seasonality first half, second more think -- be fourth typical for year about I you've as the that mean, be

second addition Constantine, in you So think remember first to about what half, I too. half the just to balance said,

Constantine Davides

process maybe you you the I you're address does uptick? what in rebound missed on, forward little can of apologize moving but expand know kind you're can services on quarter, on just a maybe but that. change that then And of know how thinking limited that, one with the about with bit but regulatory uptick, only going I and And I the there? sort just Great. that's it's I if

John Gallagher

piece. performance the with start I'll Well,

then as we So said coming the a to quarter. in to we X. Tier X that Tier bookings Tier offset the of customers in and that growth obviously some too, is -- fourth and both see returned were and X in softness performance, remarks, by business the and prepared from lot in partially revenue regulatory And in the pleased

to think those we customers those We what saw us large business as a going tells X return is, from impact on to an I good have we move And the 'XX. support being growth. So revenue there. have still services bookings are business, obviously, Tier into that our bookings

So coming were back X. X happy bounce off with QX, we and of that

Operator

coming Our Bank next from America. Moss question Andrew be of of will

Andrew Moss

to potential how the might noted expectations you the offering. any William, the on high AI expand traction CoAuthor the and So, ahead and you've be the CoAuthor provide the current for color offering? large expand Can in year to opportunity

William Feehery

That's question. good a

we which on -- very just a product I customers, months paying think market. which multiple after track much is have couple we of So view the being as that on

We pipeline have good a pretty well. as

itself product whole meeting So need. the will I seems think competitive we've what -- we documents regulatory a from there's out of standpoint, We're be have put there. time. a -- we're product to The over a lot a finding together solid expand and that

all document you addresses year and add first piece types software, do along, coming features like particular to new new versions a and obviously, which we're keep to new of this we it. The version going as it,

I here of terms what XX% time a you think draft. by create north lot, least maybe first in of reduce amount can new is we're at document to at the a of So looking a

it that handling You itself the things tables, place. read upfront databases and it's well. have of edit like getting of to can't The takes really a product document a lot regulatory Obviously, connectivity all data, it, to the than as the just in people writing, the out more loop. take other of the out but does the still humans read cost a

So it has -- kind CoPilot than it's or just applying more writing. chatGPT regulatory to of

hard it's to is moving be and and it's so AI it it quickly. it's of we how a to far is revenue say, as a moving product, the it's get revenue far expectations, so long this won't As in tell quickly, goes the but this about because dollars a of let's that for going always in product specific I significant generator. than any have year. go, real millions product one Where little can more run,

as take now. lot got it's where it a opportunities right we is So after it forward of even

Operator

from coming be will Kyle question next UBS. Our of Crews

Kyle Crews

in for information you almost color just revenues more expecting could digit Could the organic implies business around you a the piece I for services of software high business segment flat on think year. line? single-digit growth low growth maybe guidance. rate organic for to earlier that, each regulatory software And believe the guidance. if with single this business? provide said maybe a decline you that help that you're I us

John Gallagher

sure. Yes,

see digits on said on embedded me XXXX we come question single in is regulatory. the component to is your first flat that business But the of clarify sort guidance X% by I services. we earlier company growth. to then was Let back I low you for our expect parts in software What mentioned XX% when regulatory X% to to increase. could said digits. and had here, services single would was that to be the X% that organic low the split total so reported you

it of X%. think X% as So to

organic to Chemaxon, growth the to XX% including a X% to be software point, and XX% Kyle, Software, growth. in But of your be organic the would range X%. would

is that what aligned earlier. saying with were So you

Kyle Crews

to Great. some your other on software the color maybe outside of consortium efforts you could Simcyp core expand customers? And provide the then to

John Gallagher

Yes.

delivering We have multiple routes for Simcyp.

which going very, have been obviously, have it's around our We -- core consortium, strong. we very has and

a small the of customers we'll too couple uses over grower we the outside -- internal of which for has also basically years. significant not a growing. might to group that's do We have have projects also directly sell software been that people or it. been consortium a last for number do the that And to customers just be capabilities

multiple we've of So we've kind deliver think one different we're got as I thought -- customer it. tool about ways and segments, of to it

in the consulting idea addition, that core forward, go in in going already QSP, started we additional of from Simcyp. with core a investing heavily type been we've we've the think but to that's a a we're we've business, lead our primarily because built starting base advantage underlying this interface was Simcyp lot when to we And underlying -- expand the modeling to parts got opportunities software we've got there. with I to the the Now got QSP software. as that's

come started as to And go and there'll forward out, be additional that so this we investments that's year. in

Operator

be Stanley. will Morgan And our coming last Vikram Purohit from question of

Unknown Analyst

on Park This Vikram. for is

AI Just you BD Could company and fold you're on of point? investments in your of you interesting at this could kind in to current guys touched software. view and on profile making provide the assets to which be us like

John Gallagher

Yes.

have constantly M&A obviously, sheet been towards look balance looking So we continue at -- we we're that we opportunities there. and We've to we the said clear software.

additional given We able done to the be number want the recently, do that. we to have we've of to are busy tuck-ins capacity acquisitions should do but we

Operator

participating. today's concludes this conference call. And for you Thank

may You disconnect. now

Certara (CERT) 26 Feb 252024 Q4 Earnings call transcript