Summary
Certara's fiscal 2024 third quarter revenue was $94.8 million, up 10.8% from the prior-year quarter. Operating income was $2.6 million, up from the prior-year quarter. Net income was a loss of $1.4 million, up from the prior-year quarter, and diluted EPS was -$0.01. Operating margin was 2.7%, up 64.4 percentage points from the prior-year quarter. Those GAAP results came alongside non-GAAP adjusted EBITDA of $33.1 million, up 15% from $28.8 million, and adjusted diluted EPS of $0.13 compared with $0.11. Adjusted net income was $20.3 million compared with $17.1 million. Total operating expenses declined, helped by the absence of the prior-year goodwill impairment charge. The quarter showed revenue growth and a sharp improvement in operating profitability.
The top line was supported by bookings and software strength. Total bookings were $96.1 million, up 13%. Software bookings were $34.8 million, up 28%, while services bookings were $61.3 million, up 6%. The net retention rate was 107.6% in the quarter, compared with 107.4% in the prior-year quarter. Management pointed to strength in biosimulation software and Pinnacle 21. The services business was mixed. Biosimulation services grew, but weaker performance in regulatory services offset that growth. Large biopharma customers remained cautious with spending. Bookings growth was stronger in software than in services, and net retention was slightly above the prior-year quarter.
On a year-to-date basis, revenue was $284.8 million, up 6.9% from the prior-year period. Net loss was $18.6 million, and diluted EPS was -$0.12. Operating margin was -2.7%, up 9.4 percentage points from the prior-year period. Operating cash flow was $17.0 million in the quarter, down 45.9% from the prior-year quarter, and $31.1 million year to date, down 47.7%. Deferred revenue was $60.5 million, up 23.0% from the prior-year quarter. Remaining performance obligations were $123.4 million. The decline in operating cash flow came even as revenue grew, a pattern management attributed to lower cash-adjusted net income and working capital changes.
Certara updated its full year 2024 outlook. The company expects full year adjusted EBITDA of $120 million to $124 million and full year adjusted diluted earnings per share of $0.41 to $0.44. Fully diluted shares are expected to be 160 million to 162 million. The guidance is for the full fiscal year, not the next quarter. Management said it will keep managing the expense structure to support demand for core biosimulation software and services. The Chemaxon transaction has closed, and integration is a focus. The company has not reconciled forward-looking adjusted EBITDA or adjusted diluted EPS to GAAP because it cannot do so without unreasonable effort.
Risks remain. Demand from large biopharma customers could stay cautious. Regulatory services are under pressure. The company depends on bookings and net retention for future revenue. Competition is intense and fragmented, and regulatory changes could affect demand. Macroeconomic conditions, foreign currency swings, and acquisition integration add uncertainty. The prior-year quarter included a large goodwill impairment charge, which makes year-over-year GAAP comparisons volatile. Certara also carries debt and lease obligations that require cash. Still, the quarter showed revenue growth, a return to operating profit, and adjusted EBITDA growth of 15%. The company serves nearly 2,400 biopharmaceutical companies, academic institutions, and regulatory agencies across 66 countries.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $94.8M | $93.3M | +1.6% | $85.6M | +10.8% |
| Research & development | $8.3M | $9.1M | -8.8% | $9.0M | -7.9% |
| Sales & marketing | $11.3M | $12.2M | -7.1% | $7.2M | +56.8% |
| General & administrative | $22.0M | $28.1M | -21.5% | $27.8M | -20.6% |
| Total operating expenses | $55.0M | $62.5M | -12.0% | $102.5M | -46.3% |
| Operating income (loss) | $2.6M | -$9.0M | +128.7% | -$52.8M | +104.9% |
| Operating margin | 2.7% | -9.7% | +12.4 pp | -61.7% | +64.4 pp |
| Net income (loss) | -$1.4M | -$12.6M | +89.1% | -$49.0M | +97.2% |
| Net margin | -1.4% | -13.5% | +12.0 pp | -57.2% | +55.8 pp |
| Diluted EPS | -$0.01 | -$0.08 | +$0.07 | -$0.31 | +$0.30 |
| Customers | 2,014 | 2,014 | ±0.0% | 2,014 | ±0.0% |
Risks
MD&A states that changes in government or regulatory policy, or a reversal in the trend toward increasing acceptance of in silico data in the drug approval process, could decrease demand for products and services.
MD&A cites uncertain macroeconomic conditions including higher inflation, rising interest rates, instability in the financial system, geopolitical conflicts, and pandemics as challenges to the business.
MD&A describes the biosimulation market as competitive and highly fragmented, with principal competitive factors including functionality and quality of models, regulator acceptance, and depth of drug development experience.
Operating cash flow declined 47.7% for the nine months ended September 30, 2024 to $31.1 million from $59.4 million in the prior-year period, driven by lower cash-adjusted net income and increases in accounts receivable.
As of September 30, 2024, the company had $299.3 million outstanding on a floating rate term loan, exposing it to interest rate risk and requiring significant future principal and interest payments.
MD&A states bookings have varied and will continue to vary significantly from quarter to quarter and year to year; Q3 2024 bookings were $96.1 million versus $84.8 million in Q3 2023.
SaaS KPIs
All quarters →Services Bookings
Software Bookings
Total Bookings
Total customers
Net Revenue Retention
Summary, forecast, risks and KPIs are extracted from Certara, Inc.'s SEC filings for Q3 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.