Jeff Garro: Great. Thanks for taking the question.
Operator: Thank you. Our next question comes from the line of Michael Cherny with Leerink Partners. Your line is open.
Michael Cherny: Good afternoon and thanks for all the details so far. I appreciate the color on the organic growth. Can you just give us a little sense on how you expect it to trend between software and services? I mean, I know it especially [ph] falls from the bookings. But just want to make sure we have a good understanding on very different growth rates, both organic and inorganic contribution against the backdrop of your margin commentary for the year.
John Gallagher: Yes. Yes. So, the way to think about it as a sort of cadence through the year would be that we would see some acceleration across both software and services Q1 through into Q4. I’d say for software, that there’s less of that. And then I think there’s really more of a story on first half, second half on the services side of the business. But even when you look at that, it’s probably a couple of hundred basis points, north and south of 50%, when you look at services accelerating into the back half. Coinciding with that also would be from a margin perspective, since historically, we have had a strong Q4 then, and because of the ramp that we’d see going as we progress through the year, then we’d expect the margin to progress in that fashion as well.
Michael Cherny: Margin progressing alongside services, which I assume would come in at a lower gross margin or some other–
John Gallagher: I meant total — I meant in that regard, total company margin and the progression during the course of the year. Our margin would typically be lower in Q1 than it would be in Q4, where we’ve historically, including this past Q4, had strong revenues.
Michael Cherny: Okay, got it. And then when you think about where you sit right now, obviously, having completed the recent M&A, building into QSP. How do you think about that next leg of pipeline for inorganic growth? This is obviously a business that’s had great contributions as you built out that portfolio. At what point in time do you feel like service-wise, critical mass has essentially been achieved? Or is this going to continually be, especially as you get back into the market with more demand, a perpetual growth opportunity for more and more bolt-ons like we’ve seen — recently been successfully?
William Feehery: Yes. So, this is Bill. I’ll take this one. So, we’ve been fortunate to have a history of a fair number of very successful bolt-on acquisitions to help us create the company. But we’ve said from the beginning that — I guess, the first point is we’re in an interesting space where there’s a lot of interesting technologies and companies available, but we don’t think about the world as we expect or have to do inorganic deals. Most of the deals we’ve done have been companies that we’ve worked with very closely, we knew them really well, and it made a lot of sense for them to come to a bigger platform, and we’ve been successful with that. As we go forward, we’re always looking at things. But if we do — the way I feel like this is if we do no deals, that will be fine, there’s plenty of organic opportunities in Certara.
But sometimes you see technologies where you add one on one and you get more than two. And when we see those types of things, I think it’s really good that we have the ability and the track record of moving successfully to integrate them into Certara.
Michael Cherny: All right. Thanks so much.
Operator: Thank you. Our next question comes from the line of Vikram with Morgan Stanley. Your line is open.
Vikram Purohit: Hi, good afternoon. This is Vikram. Thanks for taking our questions. We had two. My first one was a follow-up to your commentary on the health of the biotech markets. I just wanted to clarify one item on your guidance here. So, does your current revenue guidance for 2024 contemplate a certain level of recovery in the second half of the year? Or would that present 4% upside to your current guidance? And then as a follow-up, I was hoping to get your latest thoughts on geographic expansion and whether there are any ex-U.S. geographies that represent particular areas of focus for you? Thanks.
John Gallagher: Yes, sure. So, as far as the biotech market itself, then we do — we have a stable the way that we presented our guidance and the way that we think about it. So, as we exit — as we looked at Q3, we saw stability there. We exited Q4 with stability, and our guidance contemplates stability throughout the year. Of course, we read the same thing everybody else does. So, we know that there is the possibility of an improving market, and perhaps that happens more in the back half, but that’s not the way that we built the guidance in this case. And then your — the second part of your question was related to ex-U.S. I mean, some of the investments that we’re making outside of the U.S. are areas that we see for growth, including Asia-Pacific. We have a strong base of business in Europe. But I’d tell you that the growth profile of what we’re looking for here in the guidance is centered mainly in the U.S. and in the European markets for 2024.
Vikram Purohit: Understood. Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Max Smock with William Blair. Your line is open.
Max Smock: Hey, good afternoon guys. Thanks for taking our questions. Maybe just asking a little bit of a longer term one here on the margins. And just getting your thoughts on the long-term trajectory, in particular, I know during the IPO process, you mentioned getting up to high 30% longer term. Just wondering if that is still kind of the long-term target here and how we should think about the margin trajectory beyond 2024?
William Feehery: Yes. So, I’ll start, and I’ll let John chime in. The way we think about this is we can easily run this company at mid-30s EBITDA margin. Right now at this period of time, we have significant opportunities to make investments in our software and our AI, some of the things we talked about. We’re going to do that through 2024. At the end of 2024, we could certainly have the option to go right back to where we were, but we’ll evaluate and see what the opportunities are for our company and our shareholders at that point.
