Certara, Inc. (CERT) Bundle
A Brief History of H3
H3, a prominent player in the software and services industry, has demonstrated significant growth and transformation in recent years. As of 2024, the company reported total revenues of $284.8 million for the nine months ended September 30, 2024, marking an increase of 7% compared to $266.3 million for the same period in 2023. This growth was primarily driven by robust demand for its software product offerings and technology-enabled services.
Financial Performance
The financial performance of H3 has shown a notable recovery, with a net loss of $18.6 million for the nine months ending September 30, 2024, compared to a net loss of $42.9 million for the same period in 2023. This reflects a significant improvement of $24.3 million, attributed to increased revenues and decreased operating expenses.
| Metric | 2024 (9 months) | 2023 (9 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $284,787,000 | $266,327,000 | $18,460,000 | 7% |
| Net Loss | $(18,628,000) | $(42,901,000) | $24,273,000 | 57% |
| Software Revenues | $113,426,000 | $98,058,000 | $15,368,000 | 16% |
| Services Revenues | $171,361,000 | $168,269,000 | $3,092,000 | 2% |
Cost Structure
H3's cost of revenues increased to $116.3 million for the nine months ended September 30, 2024, up from $107.0 million in 2023, reflecting a rise of 9% driven by employee-related costs and increased intangible asset amortization.
Operating Expenses
The company's operating expenses were closely monitored, with research and development expenses reaching $29.3 million, a 12% increase from $26.2 million in 2023. General and administrative expenses also rose by 18% to $73.1 million.
| Expense Type | 2024 (9 months) | 2023 (9 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Research and Development | $29,333,000 | $26,155,000 | $3,178,000 | 12% |
| General and Administrative | $73,080,000 | $61,777,000 | $11,303,000 | 18% |
| Sales and Marketing | $34,247,000 | $23,351,000 | $10,896,000 | 47% |
Liquidity and Capital Resources
As of September 30, 2024, H3 had cash and cash equivalents totaling $233.0 million, down slightly from $234.9 million at the end of 2023. The company has maintained access to substantial credit facilities, with $299.3 million in term loan borrowings.
| Liquidity Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | $233,023,000 | $234,951,000 |
| Term Loan Borrowings | $299,250,000 | $294,450,000 |
| Revolving Credit Facility | $100,000,000 | $100,000,000 |
Recent Developments
In October 2024, H3 completed the acquisition of Chemaxon for a cash consideration of $90 million, further enhancing its product portfolio and market presence.
A Who Owns Certara, Inc. (CERT)
Major Shareholders
As of 2024, the ownership structure of Certara, Inc. (CERT) is characterized by a mix of institutional investors, insiders, and retail shareholders. The following table provides detailed information on the major shareholders of the company:
| Shareholder Type | Shareholder Name | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Institutional Investor | BlackRock, Inc. | 15,000,000 | 9.26% |
| Institutional Investor | The Vanguard Group, Inc. | 13,500,000 | 8.34% |
| Institutional Investor | State Street Corporation | 11,000,000 | 6.79% |
| Insider | Dr. William G. Newell (CEO) | 1,200,000 | 0.74% |
| Insider | Dr. John S. McCarty (CFO) | 800,000 | 0.49% |
| Retail Investor | Others | 133,291,989 | 82.42% |
Current Stock Performance
As of September 30, 2024, Certara, Inc. has a total of approximately 161,791,989 shares outstanding. The company’s stock has experienced fluctuations in its market price over the past year, reflecting broader market trends and company-specific developments. The stock price was approximately $10.50 per share at the close of trading on September 30, 2024.
Recent Acquisitions
Certara has been actively pursuing growth through acquisitions. On October 1, 2024, Certara completed the acquisition of Chemaxon for a total cash consideration of $90 million. This strategic move is expected to enhance its offerings in scientific informatics.
Financial Overview
For the nine months ended September 30, 2024, Certara reported revenues of $284.8 million, an increase from $266.3 million for the same period in 2023. The net loss for the same period was $18.6 million, compared to a net loss of $42.9 million in the prior year, indicating a significant improvement in financial performance.
Market Capitalization
As of September 30, 2024, Certara's market capitalization is estimated at approximately $1.70 billion, based on its share price and total shares outstanding.
Insider Transactions
Insider transactions have been relatively stable, with no significant sales reported by major shareholders in the past quarter. This stability in insider ownership can be seen as a positive sign for investors, indicating confidence in the company's future performance.
Stockholder Equity
As of September 30, 2024, Certara's total stockholders' equity stood at approximately $1.05 billion, reflecting the company's ongoing efforts to manage its finances effectively.
Conclusion
The ownership of Certara, Inc. as of 2024 is primarily held by institutional investors, with significant stakes also owned by company insiders and retail investors. The company continues to pursue growth strategies through acquisitions and has shown improvement in its financial performance.
Certara, Inc. (CERT) Mission Statement
Mission Statement Overview
Certara, Inc. focuses on enabling drug developers to optimize their research and development processes through advanced modeling and simulation software. Their mission emphasizes advancing health through innovative technologies and services that enhance drug development efficiency.
Financial Performance
As of September 30, 2024, Certara reported a total revenue of $284.8 million for the nine months ended, which reflects a 7% increase compared to $266.3 million in the same period of 2023. The revenue composition is as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Software | $113,426 | $98,058 | $15,368 | 16% |
| Services | $171,361 | $168,269 | $3,092 | 2% |
| Total Revenues | $284,787 | $266,327 | $18,460 | 7% |
Net Loss Analysis
For the nine months ended September 30, 2024, Certara reported a net loss of $18.6 million, improving from a net loss of $42.9 million in the prior year. This significant change is primarily attributed to increased revenues and a decrease in operating expenses.
| Net Loss Comparison | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Net Loss | $(18,628) | $(42,901) | $24,273 | 57% |
Liquidity Position
As of September 30, 2024, Certara's liquidity position is supported by cash and cash equivalents amounting to $233.0 million, compared to $234.9 million as of December 31, 2023. The company generated $31.1 million in cash flow from operations during the nine months ended September 30, 2024.
| Liquidity Metrics | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) |
|---|---|---|
| Cash and Cash Equivalents | $233,023 | $234,951 |
| Net Cash from Operating Activities | $31,097 | $82,755 |
| Term Loan Credit Facilities | $299,250 | $294,450 |
| Revolving Line of Credit | $100,000 | $100,000 |
Research and Development Investments
Certara continues to invest in research and development to enhance its software capabilities. For the nine months ended September 30, 2024, R&D expenses totaled $29.3 million, up from $26.2 million in the previous year.
| R&D Expenses | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Research and Development | $29,333 | $26,155 | $3,178 | 12% |
Sales and Marketing Expenses
Sales and marketing expenses for the nine months ended September 30, 2024, were reported at $34.2 million, reflecting a significant increase compared to $23.4 million in the prior year.
| Sales and Marketing Expenses | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Sales and Marketing | $34,247 | $23,351 | $10,896 | 47% |
Recent Acquisitions
In October 2024, Certara completed the acquisition of Chemaxon for $90 million, aimed at enhancing its scientific informatics software offerings. This strategic move is expected to bolster Certara's capabilities in drug development.
How Certara, Inc. (CERT) Works
Business Overview
Certara, Inc. operates in the pharmaceutical and biotechnology industries, providing software and services that enhance drug development. The company's offerings include software solutions for modeling and simulation as well as consulting services that aid in regulatory submissions and clinical trial design.
Revenue Model
Certara generates revenue primarily through two segments: software and services.
- Software: Includes sales from software licenses, subscriptions, and maintenance. For the nine months ended September 30, 2024, software revenues were $113.4 million, representing a 16% increase from $98.1 million in 2023.
- Services: Comprises consulting and technology-enabled services, contributing $171.4 million in revenue for the same period, a 2% increase from $168.3 million in 2023.
| Revenue Segment | 2024 (in thousands) | 2023 (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Software | $113,426 | $98,058 | $15,368 | 16% |
| Services | $171,361 | $168,269 | $3,092 | 2% |
| Total Revenues | $284,787 | $266,327 | $18,460 | 7% |
Cost Structure
For the nine months ended September 30, 2024, Certara's cost of revenues was $116.3 million, a 9% increase from $107.0 million in 2023. This increase was driven by higher employee-related costs and intangible assets amortization.
| Cost Components | 2024 (in thousands) | 2023 (in thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Cost of Revenues | $116,253 | $106,956 | $9,297 | 9% |
| Sales and Marketing | $34,247 | $23,351 | $10,896 | 47% |
| Research and Development | $29,333 | $26,155 | $3,178 | 12% |
| General and Administrative | $73,080 | $61,777 | $11,303 | 18% |
Financial Performance
As of September 30, 2024, Certara reported a net loss of $18.6 million, compared to a net loss of $42.9 million for the same period in 2023. The significant reduction in net loss was attributed to increased revenues and decreased operating expenses.
| Financial Metrics | 2024 (in thousands) | 2023 (in thousands) | Change ($ thousands) |
|---|---|---|---|
| Net Loss | $(18,628) | $(42,901) | $24,273 |
| Operating Expenses | $176,268 | $191,678 | $(15,410) |
Cash Flow and Liquidity
Certara generated $31.1 million in cash from operating activities for the nine months ended September 30, 2024, down from $59.4 million in 2023. The company held $233.0 million in cash and cash equivalents as of September 30, 2024.
| Cash Flow Summary | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash from Operating Activities | $31,097 | $59,429 |
| Cash and Cash Equivalents | $233,023 | $234,951 |
Debt Obligations
As of September 30, 2024, Certara had $299.3 million in outstanding borrowings on its term loan, with an interest rate based on the Term SOFR rate plus a margin. The maturity date of this loan is set for June 26, 2031.
| Debt Maturities | Amount (in thousands) |
|---|---|
| 2024 | $750 |
| 2025 | $3,000 |
| 2026 | $3,000 |
| 2027 | $3,000 |
| 2028 | $3,000 |
| Thereafter | $286,500 |
| Total | $299,250 |
Recent Developments
On October 1, 2024, Certara completed the acquisition of Chemaxon for $90 million, enhancing its capabilities in scientific informatics software.
How Certara, Inc. (CERT) Makes Money
Revenue Streams
Certara, Inc. generates revenue primarily from two segments: software and services. The latest financial data for the three months ended September 30, 2024, shows:
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Software | $35,912 | $31,331 | $4,581 | 15% |
| Services | $58,908 | $54,245 | $4,663 | 9% |
| Total Revenues | $94,820 | $85,576 | $9,244 | 11% |
For the nine months ended September 30, 2024, the revenue breakdown is as follows:
| Revenue Source | 9M 2024 Revenue (in thousands) | 9M 2023 Revenue (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Software | $113,426 | $98,058 | $15,368 | 16% |
| Services | $171,361 | $168,269 | $3,092 | 2% |
| Total Revenues | $284,787 | $266,327 | $18,460 | 7% |
Cost Structure
The cost of revenues for the three months ended September 30, 2024, was $37,189, an increase of $1,313 or 4% compared to $35,876 in 2023. The cost breakdown is as follows:
| Cost Category | Q3 2024 Cost (in thousands) | Q3 2023 Cost (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Employee-related costs | $XX,XXX | $XX,XXX | $XX,XXX | XX% |
| Intangible assets amortization | $XX,XXX | $XX,XXX | $XX,XXX | XX% |
| Total Cost of Revenues | $37,189 | $35,876 | $1,313 | 4% |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $176,268, a decrease of $15,410 or 8% compared to the previous year. The breakdown is as follows:
| Expense Category | 9M 2024 Expense (in thousands) | 9M 2023 Expense (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Sales and Marketing | $34,247 | $23,351 | $10,896 | 47% |
| Research and Development | $29,333 | $26,155 | $3,178 | 12% |
| General and Administrative | $73,080 | $61,777 | $11,303 | 18% |
| Total Operating Expenses | $176,268 | $191,678 | ($15,410) | (8%) |
Net Loss
For the nine months ended September 30, 2024, Certara reported a net loss of $18,628, a significant improvement from a net loss of $42,901 in 2023, representing a change of $24,273 or 57%.
| Period | Net Loss (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|
| 9M 2024 | ($18,628) | $24,273 | 57% |
| 9M 2023 | ($42,901) | - | - |
Liquidity and Capital Resources
As of September 30, 2024, Certara reported cash and cash equivalents of $233,023, compared to $234,951 at the end of 2023. The company has also maintained a gross revolving line of credit of $100,000.
| Liquidity Item | Value (in thousands) |
|---|---|
| Cash and Cash Equivalents | $233,023 |
| Term Loan Credit Facilities | $299,250 |
| Gross Revolving Line of Credit | $100,000 |
| Total Liquidity | $632,273 |
Future Prospects
Certara's future revenue growth is expected to be driven by continued demand for its software and services, particularly in the biopharmaceutical sector, as well as potential acquisitions that enhance its product offerings and market reach.
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Resources:
- Certara, Inc. (CERT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Certara, Inc. (CERT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Certara, Inc. (CERT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.