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CERT

Certara, Inc.
NASDAQ · TECHNOLOGY · SERVICES-PREPACKAGED SOFTWARE
10.33
+0.24 +2.38%
USD · close Oct 23
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MKT CAP $1.6BP/E —DIV YIELD —FCF YIELD 5.10%REV TTM $408.4M +3.8%NET INCOME −$68.4M −957.1%NET DEBT $107.7M52W 4.48 – 12.51SEC XBRL · TTM TO Invalid Date

How CERT rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
65%
of sentences unchanged
Added
197
new sentences
Dropped
149
sentences removed
Length
+1,811
words, now 28,706

New in FY2025

  • The following should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in Part I, “Item 1A- Risk Factors” in this Annual Report. • Deceleration in, or resistance to, the acceptance of model-informed biopharmaceutical discovery and development could reduce the demand for our products and services. • We compete in a competitive and highly fragmented market. • Changes or delays in government regulation relating to the biopharmaceutical industry could decrease the need for some of the services we provide. • Reduction in research and development (“R&D”) spending by our customers, as well as delays in the drug discovery and development process, may reduce demand for our products and services. • Operational disruptions, funding constraints and policy changes at the FDA and other government agencies could adversely affect regulatory activity and our business. • Consolidation within the biopharmaceutical industry may reduce the pool of potential customers for our products and services or reduce the number of licenses for our software products. • Our continued revenue growth depends on our ability to successfully increase our customer base, expand our relationships and the products and services we provide, and enter new markets. • We depend on key personnel and may not be able to retain these employees or recruit additional qualified personnel, which could harm our business. • If our independent contractors are characterized as employees, we could be subject to material adverse effects on our business and employment and withholding liabilities. • Delays or defects in the release of new or enhanced software or other biosimulation tools may result in increased cost to us, delayed market acceptance of our products, diminished demand for our products, delayed or lost revenue, and liability. • Issues relating to the implementation, use and development of artificial intelligence (“AI”) and machine learning in our products and services may result in reputational harm, regulatory action, or legal liability, and any failure to adapt to such technological developments or industry trends could adversely affect the competitiveness of our business. • If our existing customers do not renew their software licenses, do not buy additional solutions from us or renew at lower prices, our business and operating results will suffer. • We have government customers and have received government grants, which subject us to risks including early termination, audits, investigations, sanctions, or penalties. • We regularly evaluate potential acquisitions and other strategic transactions that we deem beneficial and strategic to our long-term growth and profitability, which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results. • Our estimated addressable market is subject to inherent challenges and uncertainties. • Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity. • We are subject to economic, political and other risks associated with the operation of a global business that could negatively affect our business, results of operations and financial condition. • Our failure to comply with trade compliance and economic sanctions laws and regulations could materially adversely affect our reputation and results of operations. • If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations, we could be liable for significant costs or penalties and our reputation could be harmed. • The loss of one or more of our major customers could materially and adversely affect our business, results of operations and/or financial condition. • Our bookings might not accurately predict our future revenue, and we might not realize all or any part of the anticipated revenue reflected in our bookings. • We are subject to the Foreign Corrupt Practices Act (“FCPA”) and the U.K.
  • Bribery Act”) and similar anti-corruption laws and regulations in other countries. • Our business may be subject to risks arising from catastrophic events, including natural disasters, significant or extreme weather events, outbreaks of war or terrorism, epidemic diseases, pandemics, and public health crises. • We rely upon third-party providers of cloud-based infrastructure to host our software solutions.
  • Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use could adversely affect our business. • If our cybersecurity measures are breached or unauthorized access to customer or other proprietary data is otherwise obtained, customers may reduce the use of or stop using our solutions and we may incur significant liabilities and/or loss of customer confidence. • We are subject to numerous privacy and data security laws and related contractual requirements and our failure to comply with those obligations could cause us significant harm. • If we are not able to reliably meet our data storage and management or other information technology requirements, or if we experience any technology failures in the delivery of our services over the internet or in the administration of our business, customer satisfaction and our reputation could be harmed and customer contracts may be terminated. • Some of our software solutions utilize third-party open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business. • We may be unable to adequately enforce or defend our ownership and use of our intellectual property and other proprietary rights. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, which could have a material adverse effect on our business. • Our indebtedness could materially adversely affect our financial condition and our ability to operate our business. • Impairment of goodwill and other tangible assets may adversely impact future results of operations.
  • Our Company We are a global leader in biosimulation science, technology, and consulting services for using Model-Informed Drug Development (“MIDD”) in the global biopharmaceutical and biotech industry.
  • MIDD is an approach that utilizes biological and statistical models derived from preclinical, clinical, and evidence data to inform decision-making in drug research and development, and commercialization.
  • Biosimulation and hereby MIDD can increase the probability of success in bringing a new drug to market, accelerate its development and decrease the costs of drug development.
  • There are many examples of currently approved drugs where models were successfully used in discovery, preclinical, first-in-human dose predictions, clinical trial simulations and protocol design, and for drug interaction label claims.
  • In addition, MIDD strategies are increasingly utilized to help predict commercial success, a critical part of the drug research and development process as new products must be both approved by regulators and adopted by the market.
  • Our organization has been purposefully designed to include all these capabilities to collectively enable a new model of drug research and development for our clients.
  • Our goal is to enable the life sciences industry to use data, modeling, and analytics to make better decisions during drug research, development and commercialization to increase productivity rates and vastly reduce development costs.
  • The pharmaceutical industry spends more than $290 billion annually on research and development.
  • Our technology and scientists incorporate modern advances in scientific understanding, drug research and development experience, data analysis, and AI, resulting in significant opportunities to decrease the cost and increase the odds of new drug approval and commercial success.
  • Our approach to AI is grounded in our long-standing expertise in mechanistic and empirical modeling.
  • We deploy AI capabilities within validated scientific frameworks and expert-led workflows, rather than as standalone automated systems.
  • This expert-in-the-loop model allows us to leverage native AI capabilities in a manner that is consistent with regulatory expectations for transparency, reproducibility, and explainability.
  • To do this, we have developed scientifically based solutions for the collection, standardization, validation, storage, and analysis of the preclinical, clinical and evidence data needed for MIDD.
  • These data solutions are used internally and industry wide by life sciences companies.
  • The scientific principles underlying our work must be transparent and fully explainable during the regulatory process, so we have developed expertise in incorporating data, references and results into regulatory documents.
  • Our software and regulatory scientific services streamline the creation of regulatory filings and speed regulatory data flow to maximize the chances of successful commercialization.
  • Native AI and machine learning technologies are being incorporated across our technology and consulting services portfolios, providing opportunities to expand the number of data sources utilized, better predict outcomes, and streamline reporting.
  • For example, we are using machine learning to automate and speed the process of biosimulation, and we have created generative AI applications to aid in drafting regulatory documents from scientific analyses and clinical data.
  • We apply AI capabilities within established modeling environments and under the supervision of experienced scientists and regulatory experts.
  • Our modeling platforms, curated datasets, and regulatory experience position us to incorporate emerging AI techniques in a controlled and scientifically rigorous manner.
  • While AI can enhance productivity and insight generation, our solutions continue to rely on validated models and expert interpretation to support decision-making in regulated environments.
  • Food and Drug Administration (the “FDA”) from 2014 through 2025.
  • We have worked with more than 2,600 life sciences companies and academic institutions and have collaborated on more than 10,000 customer projects in the last decade across a wide variety of therapeutic areas ranging from cancer and hematology to diabetes and hundreds of rare diseases.
  • Our software products are licensed by more than 160,000 users and are also used by 20 global drug regulatory agencies, including the FDA, Japan’s Pharmaceuticals and Medical Devices Agency (the “PMDA”), and China’s Center for Drug Evaluation (the “CDE”) within the National Medical Product Administration (the “NMPA”).
  • Our Solutions We offer differentiated and comprehensive solutions for MIDD, which include science, technology and consulting services.
  • Customers leverage our solutions to implement MIDD with the aim of improving certainty, accuracy, commercial success and the speed at which decisions can be made during the drug research and development process.
  • Our AI capabilities are unified into this broader modeling and regulatory framework.
  • Unlike general-purpose AI tools, our applications are designed to operate within scientific data environments and established pharmacometric and regulatory methodologies.
  • This integration reflects our view that AI is most effective when combined with domain expertise (“expert-in-the-loop”), validated models, and regulatory-grade data processes.
  • By offering science, technology and consulting services solutions, we provide flexible offerings for life sciences companies of all sizes and requirements.
  • Certara.AI is a secure, scalable, reliable and flexible platform for deploying life science-specific Generative Pre-Trained Transformers (“GPTs”) across an organization’s data, enabling faster search, connectivity, and content generation.
  • Our customers use biosimulation results to simulate clinical trials, to improve the design of clinical trials, reduce trial size and complexity, and in some cases obtain clinical trial waivers to replace clinical studies.
  • Phoenix has four modules that support pharmacometrics and workflow. • Phoenix WinNonlin – A platform for non-compartmental analysis, PK/PD, and TK modeling with a regulatory proven 30-year history and extensive use across the biopharmaceutics industry. • Phoenix Cloud – Our next generation cloud version of Phoenix, which provides a secured and validated Certara Amazon Web Services (“AWS”) workspace allowing for much quicker transit time from compliant data sources.
  • It enhances productivity and supports compliance requirements by managing complex time-based drug data, the foundation for all PK/PD modeling. • Phoenix NLME – A population modeling and simulation software for nonlinear mixed effects (“NLME”) models, a type of pharmacometric model often used by pharmacometricians to model absorption effects. • Pirana Modeling Workbench – A workbench providing modelers with a structure to facilitate the iterative processes used to create population PK/PD models and perform simulations using AI and machine learning resulting in more efficient model selection and analysis.
  • Used by research scientists globally, Chemaxon software helps to digitize the design, make, test and analyze discovery lifecycle to select the best new chemical leads.
  • The acquisition strategically positions Certara in the drug discovery biosimulation market and complement Certara’s existing biosimulation portfolio which is widely used in later phases of drug development.
  • The application is foundational to manage IP for the life science industry.

and 157 more.

Gone since FY2024

  • The following should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in Part I, “Item 1A- Risk Factors” in this Annual Report. • Deceleration in, or resistance to, the acceptance of model-informed biopharmaceutical discovery and development could reduce the demand for our products and services. • We compete in a competitive and highly fragmented market. • Changes or delays in government regulation relating to the biopharmaceutical industry could decrease the need for some of the services we provide. • Reduction in research and development (“R&D”) spending by our customers, as well as delays in the drug discovery and development process, may reduce demand for our products and services. • Consolidation within the biopharmaceutical industry may reduce the pool of potential customers for our products and services or reduce the number of licenses for our software products. • Our continued revenue growth depends on our ability to successfully increase our customer base, expand our relationships and the products and services we provide, and enter new markets. • We depend on key personnel and may not be able to retain these employees or recruit additional qualified personnel, which could harm our business. • If our independent contractors are characterized as employees, we could be subject to material adverse effects on our business and employment and withholding liabilities. • Delays or defects in the release of new or enhanced software or other biosimulation tools may result in increased cost to us, delayed market acceptance of our products, diminished demand for our products, delayed or lost revenue, and liability. • Issues relating to the implementation, use and development of artificial intelligence (“AI”) and machine learning in our products and services may result in reputational harm, regulatory action, or legal liability, and any failure to adapt to such technological developments or industry trends could adversely affect the competitiveness of our business. • If our existing customers do not renew their software licenses, do not buy additional solutions from us or renew at lower prices, our business and operating results will suffer. • We have government customers and have received government grants, which subject us to risks including early termination, audits, investigations, sanctions, or penalties. • Our historic growth rates may not be sustainable or indicative of future growth. • We regularly evaluate potential acquisitions and other strategic transactions that we deem beneficial and strategic to our long-term growth and profitability, which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results. • Our estimated addressable market is subject to inherent challenges and uncertainties. • Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity. • We are subject to economic, political and other risks associated with the operation of a global business that could negatively affect our business, results of operations and financial condition. • We are subject to the Foreign Corrupt Practices Act (“FCPA”) and the U.K.
  • Bribery Act”) and similar anti-corruption laws and regulations in other countries. • Our failure to comply with trade compliance and economic sanctions laws and regulations could materially adversely affect our reputation and results of operations. • If we fail to perform our services in accordance with contractual requirements, regulatory standards and ethical considerations, we could be liable for significant costs or penalties and our reputation could be harmed. • The loss of one or more of our major customers could materially and adversely affect our business, results of operations and/or financial condition. • Our bookings might not accurately predict our future revenue, and we might not realize all or any part of the anticipated revenue reflected in our bookings. • Our business may be subject to risks arising from catastrophic events, including natural disasters, significant or extreme weather events, outbreaks of war or terrorism, epidemic diseases, pandemics, and public health crises. • We rely upon third-party providers of cloud-based infrastructure to host our software solutions.
  • Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use could adversely affect our business. • If we are not able to reliably meet our data storage and management or other information technology requirements, or if we experience any technology failures in the delivery of our services over the internet or in the administration of our business, customer satisfaction and our reputation could be harmed and customer contracts may be terminated. • Our software solutions utilize third-party open source software, and any failure to comply with the terms of one or more of these open source licenses could adversely affect our business. • If our cybersecurity measures are breached or unauthorized access to customer or other proprietary data is otherwise obtained, customers may reduce the use of or stop using our solutions and we may incur significant liabilities and/or loss of customer confidence. • We are subject to numerous privacy and data security laws and related contractual requirements and our failure to comply with those obligations could cause us significant harm. • We may be unable to adequately enforce or defend our ownership and use of our intellectual property and other proprietary rights. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, which could have a material adverse effect on our business. • Our indebtedness could materially adversely affect our financial condition and our ability to operate our business. • Impairment of goodwill and other tangible assets may adversely impact future results of operations.
  • Our Company We are a global leader in biosimulation technology and solutions for using Model-Informed Drug Development (“MIDD”) in the global biopharmaceutical industry.
  • MIDD is an approach that utilizes biological and statistical models derived from preclinical and clinical data to inform decision-making in drug development and commercialization.
  • Biosimulation and MIDD can increase the probability of success in bringing a new drug to market and decrease the costs of drug development.
  • There are many examples of currently approved drugs where models were successfully used in discovery, preclinical, first-in-human dose predictions, clinical trial design, and for drug interaction label claims.
  • In addition, MIDD strategies are increasingly utilized to help predict commercial success, a critical part of the drug development process as new products must be both approved by regulators and adopted by the market.
  • Our organization has been purposefully designed to include all of these capabilities to collectively enable a new model of drug development for our clients.
  • Our goal is to enable the life sciences industry to use data, modeling, and analytics to make better decisions during drug development and commercialization to increase productivity rates and vastly reduce development costs.
  • The pharmaceutical industry spends more than $270 billion annually on research and development.
  • Our software and scientists incorporate modern advances in scientific understanding, drug development experience, data analysis, and AI, resulting in significant opportunities to decrease the cost and increase the odds of new drug approval and commercial success.
  • To do this, we have developed solutions for the collection, standardization, validation, storage, and analysis of the preclinical and clinical data needed for MIDD.
  • These data solutions are used internally and by global life sciences companies.
  • The scientific principles underlying our work must be transparent and fully explainable during the regulatory process, so we have developed expertise in incorporating data and results into regulatory documents.
  • Our software and regulatory services streamline the creation of regulatory filings and speed regulatory data flow to maximize the chances of successful commercialization.
  • AI and machine learning technologies are being incorporated across our software and services portfolios, providing opportunities to expand the number of data sources utilized, better predict outcomes, and streamline reporting.
  • For example, we are using machine learning to automate and speed the process of biosimulation, and we have created an AI application to aid in drafting regulatory documents from scientific analyses and clinical data.
  • We believe that AI predictive models will continue to enhance the accuracy and usefulness of biosimulation models and will be utilized broadly across drug development.
  • Food and Drug Administration (the “FDA”) from 2014 through 2024.
  • We have worked with more than 2,400 life sciences companies and academic institutions and have collaborated on more than 9,000 customer projects in the last decade across a wide variety of therapeutic areas ranging from cancer and hematology to diabetes and hundreds of rare diseases.
  • Our software products are licensed by more than 94,000 users and are also used by 23 global drug regulatory agencies, including the FDA, Japan’s Pharmaceuticals and Medical Devices Agency (the “PMDA”), and China’s National Medical Products Administration (the “NMPA”).
  • Our Solutions We offer differentiated and comprehensive solutions for MIDD, which include software and technology-enabled services.
  • Customers use our solutions to implement MIDD with the aim of improving certainty, accuracy, commercial success and the speed at which decisions can be made during the drug development process.
  • By offering both software and services solutions, we provide flexible offerings for life sciences companies of all sizes and requirements.
  • Certara.AI is a secure, flexible platform for deploying life science-specific Generative Pre-Trained Transformers (“GPTs”) across an organization’s data, enabling faster search, connectivity, and content generation.
  • Our customers use biosimulation results to improve the design of clinical trials, reduce trial size and complexity, and in some cases obtain clinical trial waivers to replace clinical testing.
  • Phoenix has four modules that support pharmacometrics and workflow. • Phoenix WinNonlin – A platform for non-compartmental analysis, PK/PD, and TK modeling with a proven 30-year history and extensive use across the biopharmaceutics industry. • Phoenix Hosted – A hosted (i.e., online) version of Phoenix, which provides a secured and validated Certara Amazon Web Services (“AWS”) workspace allowing for much quicker transit time from compliant data sources.
  • It enhances productivity and supports compliance requirements by managing complex time-based drug data, the foundation for all PK/PD modeling. • Phoenix NLME – A population modeling and simulation software for nonlinear mixed effects (“NLME”) models, a type of pharmacometric model often used by pharmacometricians to model absorption effects. • Pirana Modeling Workbench – A workbench providing modelers with a structure to facilitate the iterative processes used to create population PK/PD models and perform simulations using AI and machine learning resulting in more efficient analysis.
  • Used by research scientists globally, Chemaxon software helps to digitize the design, make, test and analyze lifecycle to discover the best new chemical leads.
  • The acquisition strategically positions Certara in the drug discovery biosimulation market and is intended to complement Certara’s existing biosimulation portfolio which is widely used in later phases of drug development.
  • Chemaxon Design Hub – A compound design and tracking platform for drug discovery teams and their external collaborators that connects scientific hypotheses, candidate compound selection and computational capabilities.
  • Design Hub has been integrated with the Certara D360 solution for more than eight years to provide an optimal end user experience throughout the lead optimization stage of discovery.
  • Certara D360™ Software – D360 is a scientific informatics system for small molecule and biologics discovery research.
  • It provides researchers with self-service data access, integrated data visualizations, analysis and collaboration tools for prioritization, development of Structure Activity Relationship (“SAR”) and many other scientific data workflows to improve the effectiveness of data-driven research.
  • Our principal clinical data suite is the Pinnacle 21™ family of products. • Pinnacle 21 – A cloud-based platform for clinical data automation, standardization, and validation with industry standards.
  • We support two versions of Pinnacle 21 – a fully featured enterprise version, which contains workflow and reporting tools needed by large-scale drug development customers, and a more basic free community version designed for small organizations who want to try the software. • Pinnacle 21 Data Exchange – Allows sponsors and data providers to define data standards and specifications (metadata) and ensure that data adheres to these specifications to make the process of acquiring external data from laboratory and clinical sources more efficient and predictable. • Metadata Repository – A cloud-based Clinical Metadata Repository & Study Data Tabulation Model automation suite to enable faster study design using controlled and standardized data.
  • Regulatory Science Our comprehensive regulatory science solutions help provide our customers the coordinated technology-enabled regulatory submission and regulatory writing expertise they need to accelerate the regulatory writing and filing process. • CoAuthor™ Software – Structured and Assisted Content Authoring with Generative AI – Approval for a new drug or biologic requires expert development of numerous regulatory documents, which is a time intensive process often requiring inputs from a variety of data sources and types.
  • CoAuthor powers efficient and expedited creation of regulatory documents and medical communications.
  • Combining data integration, structured content authoring and AI, CoAuthor enables writers to create and assemble regulatory submissions and medical publications faster and with confidence in the quality of their results. • GlobalSubmit™ eCTD Submissions Management – T he Electronic Common Technical Document (“eCTD”) is a standard format required for submitting applications to regulatory authorities.

and 109 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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