Certara, Inc. (NASDAQ:CERT) Q4 2023 Earnings Call Transcript

John Gallagher: Yes. And then so to carry on to what Bill said, as we look at 2024, of course, we’re looking at 31% to 33% margin. There’s investments that we talked about that we’re making. I think some of those investments, as we mentioned, the sales force will start to kick in really at the very tail end of 2024 and then we’ll have a stronger impact in 2025. And so as Bill mentioned, it’s really within the management team’s control to evaluate the pace of those investments and the amount of those investments and be able to toggle our margin accordingly as we move through this year.

Max Smock: Got it. Thank you. Maybe just following up on the services piece. Can you remind us for 2023, as we move into 2024 here, how big of a piece regulatory services is within the broader services bucket? How that piece performed in total in 2023? And then what you have embedded in your guide for that regulatory services piece in 2024?

John Gallagher: Yes. So, Max, in Q4, the regulatory business represented 19% of total revenue. Of the services revenue, it represents about 30% of it. We — as we had mentioned, we anticipated that business contracting during 2023, it did. The signs of — the positive signs, though, that you heard us talking about were mainly centered in bookings, and came in Q4 where we had said that business is marked by often having large deal bookings come in, in Q4, and we saw that happen. So, we had a number of large-size bookings come in, in Q4, that’s going to turn to revenue during 2024. So, as we approach 2024 and what that business looks like inside of our guidance there, then we see it returning to growth, but that’s going to happen over a period of quarters.

Max Smock: Understood. Thanks again for taking our questions.

John Gallagher: Thank you.

Operator: Thank you. [Operator Instructions] I’m showing no further questions in the queue. I would now like to turn the call back over to William for closing remarks.

William Feehery: Thank you everybody for joining us tonight. We’re looking forward to a great 2024 for Certara and we’ll see you on the next call. Good evening.

Operator: Ladies and gentlemen, that concludes today’s conference call. Thank you for your participation. You may now disconnect.