Q1 2026 Certara Inc Earnings Call

May 11, 2026

Speaker #1: After the speaker's presentation, there'll be a question-and-answer session to ask a question during the session you'll need to press star 101 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 101 again. Please be advised today's conference is being recorded.

Speaker #1: I would now like to end the conference over to your speaker today, David Deichler of Certara. Please go ahead.

Speaker #2: Good morning, everyone. Thank you all for participating in today's conference call. I'm the call from Certara. We have John Resnick, Chief Executive Officer and John Gallagher, Chief Financial Officer.

Speaker #2: Earlier today, Certara released financial results for the quarter ended March 31st, 2026. A copy of the press release is available on the company's website.

Speaker #2: Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements, and actual results may differ materially from those expressed or implied in the forward-looking statements.

Speaker #1: Good day, and thank you for standing by.

Speaker #1: by. Welcome to the Certara First Quarter

Speaker #1: 2026 Earnings Conference Call. At this

Speaker #1: time, all participants are on a listen-only

Speaker #1: mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a

Speaker #2: Please refer to slide 2 in the accompanying materials for additional information, which you can find on the company's investor relations website. In their remarks and responses to questions, management may mention some non-GAAP financial measures.

Speaker #1: During the session, you'll need to press *101. Good morning, everyone.

Speaker #1: your telephone. You will then hear an automated

Speaker #1: Message advising your hand is raised. To

Speaker #1: To withdraw your question, please press *101.

Speaker #1: again. Please be advised today's conference is

Speaker #2: Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are available in the recent earnings press release available on the company's website.

Speaker #1: Being recorded. I would now like to end the conference over.

Speaker #1: to your speaker today, David Deuchler of

Speaker #1: Certara. Please go

Speaker #1: ahead.

Speaker #2: Please refer to the reconciliation tables in the accompanying materials for additional information. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 11th, 2026.

Speaker #2: Good

Speaker #2: morning, everyone. Thank you all for

Speaker #2: Thank you for participating in today's conference call. I'm the call...

Speaker #2: from Certara. We have John Resnick, Chief

Speaker #2: Executive Officer and John Gallagher, Chief

Speaker #2: Financial Officer. Earlier today,

Speaker #2: Certara released financial results for the quarter ended March.

Speaker #2: Certara disclaims any obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

Speaker #2: 31st,

Speaker #2: 2026. A copy of the press release is available on the

Speaker #2: company's website. Before we begin, I would like

Speaker #2: to remind you that management will make statements during this

Speaker #2: And with that, I will turn the call over to John.

Speaker #2: call that include forward-looking statements

Speaker #2: and actual results may differ materially from

Speaker #3: Good morning. Thank you all for joining today's call. Since we last spoke, I have crossed over the 100-day mark at Certara, and I continue to be incredibly impressed by many things within the company.

Speaker #2: those expressed or implied in the forward-looking

Speaker #2: statements. Please refer to slide 2 in the

Speaker #2: accompanying materials for additional

Speaker #2: information, which you can find on the company's investor

Speaker #2: relations website. In their remarks and

Speaker #2: responses to questions, management may

Speaker #2: mention some non-GAAP financial

Speaker #3: We are differentiated by our world-leading scientists, institutional knowledge, regulatory leadership, and our fit-for-purpose technology. That is embedded in customer and regulator's workflows. Our clinical intelligence capability is the logic built into our technology: mining the latest science and drawing on what our experts know are interactions with regulators over decades.

Speaker #2: measures, reconciliations of these non-GAAP

Speaker #2: financial measures to the most directly comparable GAAP

Speaker #2: measures, or available in the recent

Speaker #2: earnings press release available on the company's

Speaker #2: website. Please refer to the reconciliation

Speaker #2: tables in the accompanying materials for additional

Speaker #2: information. This conference call contains

Speaker #2: time-sensitive information and is accurate only as of

Speaker #2: the live broadcast today, May

Speaker #2: 11th, 2026. Certara

Speaker #2: disclaims any obligation except as required by

Speaker #2: Law to update or revise any financial.

Speaker #2: projections, forward-looking statements, whether

Speaker #3: And what thousands of drug development successes and failures have taught us. Certara products and services are integral to the drug development process and increasingly scalable to the use of AI technologies.

Speaker #2: because of new information or future events or

Speaker #2: otherwise. And with that, I will turn the

Speaker #2: call over to John.

Speaker #3: Good morning. Thank you all for

Speaker #3: joining today's call. Since

Speaker #3: we last spoke, I have crossed

Speaker #3: over the 100-day mark at

Speaker #3: Certara, and I continue to be

Speaker #3: Having exited the listening and learning phase, my attention has transitioned to helping Certara reach its full potential. First quarter performance was in line with our expectations.

Speaker #3: incredibly impressed by many things

Speaker #3: within the company. We are

Speaker #3: differentiated by our world-leading

Speaker #3: scientists, institutional

Speaker #3: knowledge, regulatory leadership,

Speaker #3: But does not reflect the company's potential. I am focused on driving long-term, durable growth across the organization by reshaping our business and portfolio strategy, while instilling increased organizational and operational rigor.

Speaker #3: and our fit-for-purpose

Speaker #3: technology. That is embedded in

Speaker #3: customer and regulator's

Speaker #3: workflows. Our clinical

Speaker #3: intelligence capability, the

Speaker #3: logic built into our

Speaker #3: technology, mining the latest science,

Speaker #3: and drawing on what our experts

Speaker #3: Today, we will discuss our markets and outline the steps we are taking to position the company for long-term success before wrapping up with our first quarter performance.

Speaker #3: know are interactions with

Speaker #3: regulators over decades. And what

Speaker #3: thousands of drug development

Speaker #3: successes and failures have taught

Speaker #3: us.

Speaker #3: Let me start by updating you on our end markets. Across the board, customers are increasing investment in AI and tech-enabled drug discovery capabilities. Today, there are over 200 AI-designed molecules and clinical development, up from just a few 10 years ago.

Speaker #3: Certara products and services are

Speaker #3: integral to the drug development

Speaker #3: process and increasingly scalable to

Speaker #3: the use of AI

Speaker #3: technologies. Having

Speaker #3: exited the listening and learning

Speaker #3: phase, my attention has transitioned to helping

Speaker #3: Certara reach its full

Speaker #3: potential. First quarter performance

Speaker #3: Eli Lilly has partnered with NVIDIA to build a dedicated AI lab, and Roche Genentech is launching a hybrid cloud AI factory to scale their discovery and development efforts.

Speaker #3: was in line with our

Speaker #3: expectations. But does not reflect the

Speaker #3: company's potential. I am focused

Speaker #3: on driving long-term, durable

Speaker #3: growth across the

Speaker #3: organization by reshaping our business and

Speaker #3: Amazon has also announced a biodiscovery product through AWS, additionally OpenAI and Anthropic have announced LLMs for life science. The expansion of the use case in AI is consistent with Certara's approach using analytical techniques embedded in customers' workflow to accelerate the drug discovery and development processes, while reducing the reliance on living subjects.

Speaker #3: portfolio strategy, while

Speaker #3: instilling increased organizational

Speaker #3: and operational

Speaker #3: Rigor. Today, we will discuss our markets.

Speaker #3: and outline the steps we are taking to

Speaker #3: position the company for long-term

Speaker #3: success before wrapping up with our

Speaker #3: first quarter

Speaker #3: performance. Let me start by updating

Speaker #3: you on our end

Speaker #3: markets. Across the board,

Speaker #3: customers are increasing investment in

Speaker #3: AI and tech-enabled drug discovery

Speaker #3: As AI-driven drug development helps the industry deliver more molecules and innovation, demand will increase for Certara's core business: model-informed drug development, or MIDD. As customers race to turn drug candidates into approved treatments for patients, accelerating data analytics processes becomes more important than ever as the decades-long goal of reducing drug application timelines comes within reach.

Speaker #3: capabilities. Today, there are

Speaker #3: over 200 AI-designed

Speaker #3: molecules in clinical development, up from just

Speaker #3: a few 10 years

Speaker #3: ago. Eli Lilly has partnered with NVIDIA

Speaker #3: to build a dedicated AI

Speaker #3: lab, and Roche Genentech is launching a

Speaker #3: hybrid cloud AI

Speaker #3: factory to scale their discovery and

Speaker #3: development efforts.

Speaker #3: Amazon has also announced a biodiscovery.

Speaker #3: product through AWS,

Speaker #3: additionally OpenAI and Anthropic have

Speaker #3: In February, the ICH released ICH-M15, providing guidance of the general principles for model-informed drug development. Which establishes an overarching set of principles for the acceptance of MIDD applications by regulators globally.

Speaker #3: announced LLMs for life

Speaker #3: science. The

Speaker #3: expansion of the use case in

Speaker #3: AI is consistent with Certara's

Speaker #3: approach using analytical

Speaker #3: techniques embedded in customers'

Speaker #3: workflow to accelerate the drug

Speaker #3: discovery and development

Speaker #3: processes, while reducing the reliance on living

Speaker #3: In March, the FDA published guidance on the general consideration for the use of new approach methodologies, or NAMs, in drug development. And more recently, in April, the FDA announced a major initiative to implement real-time clinical trials.

Speaker #3: subjects. As

Speaker #3: AI-driven drug development helps the industry

Speaker #3: deliver more molecules and

Speaker #3: innovation, demand will increase for

Speaker #3: model-informed drug development, or

Speaker #3: MIDD.

Speaker #3: As customers race to ICH-M15, turn drug candidates into approved

Speaker #3: A shift to eliminate the delays that have historically slowed regulatory decisions. As FDA leadership has said, the agency has been conducting clinical trials the same way for decades.

Speaker #3: treatments for

Speaker #3: patients, accelerating data analytics

Speaker #3: processes becomes more important than

Speaker #3: ever as the decades-long

Speaker #3: goal of reducing drug application

Speaker #3: timelines comes within

Speaker #3: Where key data signals and lag time have delayed regulatory decisions unnecessarily. Which has slowed down drug development timelines. These tailwinds present a clear opportunity for Certara to tackle historically arduous drug development processes.

Speaker #3: reach. In February, the

Speaker #3: ICH released

Speaker #3: ICH-M15, providing guidance

Speaker #3: of the general principles for

Speaker #3: model-informed drug development.

Speaker #3: Which establishes an overarching set of

Speaker #3: principles for the acceptance of MIDD

Speaker #3: Certara has an incredible legacy. We believe we are unrivaled in MIDD today because of what was required to build it. We have more than two decades of published scientific literature, 2,600 customers around the world.

Speaker #3: applications by regulators

Speaker #3: globally. In March, the FDA published guidance on the

Speaker #3: General considerations for the use of new

Speaker #3: approach methodologies, or

Speaker #3: NAMs, in drug development, and more.

Speaker #3: recently, in April, the FDA

Speaker #3: announced a major initiative to implement

Speaker #3: I've run over 10,000 projects and have more than 160,000 users of our technology. Including the FDA and Japan's pharmaceutical and medical devices agency. Pinnacle 21 has been used to validate more than 36 trillion data points and support of over 500 approved treatments.

Speaker #3: real-time clinical trials. A

Speaker #3: shift to eliminate the delays that have

Speaker #3: historically slowed regulatory

Speaker #3: decisions. As FDA

Speaker #3: leadership has said, the agency has

Speaker #3: been conducting clinical trials the same

Speaker #3: way for

Speaker #3: decades. Where key data

Speaker #3: Signals and lag time have delayed.

Speaker #3: regulatory decisions

Speaker #3: And we are a team of world-class scientists and are proud to have 10 scientists recognized in Elsevier's top 2% of the world's most cited scientists.

Speaker #3: unnecessarily, which has slowed down drug

Speaker #3: development timelines. These

Speaker #3: tailwinds present a clear opportunity for

Speaker #3: Certara to tackle historically

Speaker #3: arduous drug development

Speaker #3: processes. Certara has an incredible

Speaker #3: This is not a position that can be replicated overnight. It is the product of decades of scientific rigor, regulatory trust, and deep customer partnership that many underestimate.

Speaker #3: legacy. We believe we are

Speaker #3: unrivaled in MIDD today because of

Speaker #3: what was required to build

Speaker #3: it. We have more than two

Speaker #3: decades of published scientific

Speaker #3: literature, 2,600 customers around

Speaker #3: For example, the qualification of our SIMCIP software for the prediction of drug-to-drug interactions in the EMA required two years of engagement with participants representing all 27 member states.

Speaker #3: the world. I've run over

Speaker #3: 10,000 projects and have

Speaker #3: more than 160,000

Speaker #3: users of our

Speaker #3: technology. Including the FDA and

Speaker #3: Japan's pharmaceutical and medical devices

Speaker #3: agency. Pinnacle 21 has been used to validate more

Speaker #3: Our most experienced scientists work directly with EMA reviewers to evaluate 25 years' worth of data code and process documentation to gain approval from the EMA.

Speaker #3: than 36 trillion data

Speaker #3: points and support of over

Speaker #3: 500 approved

Speaker #3: treatments. And we are a team of world-class

Speaker #3: To our knowledge, SIMCIP is the only mechanistic modeling software qualified in Europe at this critical level. Building on this legacy, we have developed and continue to invest in category-leading products that are truly distinguished in the market.

Speaker #3: scientists and are proud to

Speaker #3: have 10 scientists recognized in

Speaker #3: Elsevier's top 2% of the

Speaker #3: world's most cited

Speaker #3: scientists. This is not a position that can be

Speaker #3: replicated overnight. It

Speaker #3: is the product of decades of scientific

Speaker #3: Maxim, SIMCIP, Pinnacle 21, and Phoenix are purpose-built, validated, and deeply embedded in the workflows of the world's leading drug developers and regulators. What makes these valuable to our customers is the cutting-edge science, proprietary data, intellectual property, thousands of validated biological parameters, unmatched computational precision, and auditable transparency that regulated science demands.

Speaker #3: rigor, regulatory trust,

Speaker #3: and deep customer

Speaker #3: partnership that many

Speaker #3: underestimate. For example, the

Speaker #3: qualification of our SIMCIP software for the

Speaker #3: prediction of drug-to-drug

Speaker #3: interactions in the EMA required two years of engagement with participants representing all 27.

Speaker #3: As we move the company forward, there is a window of opportunity for us to drive value from connectivity across our clinical intelligence capabilities. We are building an AI-integrated platform that sits on top of and complements our existing portfolio.

Speaker #3: This next-generation platform will give researchers the ability to interrogate Certara's full body of knowledge, cross products, data sets, and scientific expertise, to get accurate, trusted answers to increasingly complex questions.

William Feehery: Deeply embedded in the workflows of the world's leading drug developers and regulators. What makes these valuable to our customers is the cutting-edge science, proprietary data, intellectual property, thousands of validated biological parameters, unmatched computational precision, and auditable transparency that regulated science demands. As we move the company forward, there's a window of opportunity for us to drive value from connectivity across our clinical intelligence capabilities. We are building an AI-integrated platform that sits on top of and complements our existing portfolio. This next-generation platform will give researchers the ability to interrogate Certara's full body of knowledge across products, datasets, and scientific expertise to get accurate, trusted answers to increasingly complex questions. We have created an AI native team, allocated the investment resources needed for this effort, and are engaging lighthouse customers.

Jon Resnick: Deeply embedded in the workflows of the world's leading drug developers and regulators. What makes these valuable to our customers is the cutting-edge science, proprietary data, intellectual property, thousands of validated biological parameters, unmatched computational precision, and auditable transparency that regulated science demands. As we move the company forward, there's a window of opportunity for us to drive value from connectivity across our clinical intelligence capabilities. We are building an AI-integrated platform that sits on top of and complements our existing portfolio. This next-generation platform will give researchers the ability to interrogate Certara's full body of knowledge across products, datasets, and scientific expertise to get accurate, trusted answers to increasingly complex questions. We have created an AI native team, allocated the investment resources needed for this effort, and are engaging lighthouse customers.

Speaker #3: We have created an AI-native team allocated the investment resources needed for this effort and are engaging Lighthouse customers. Our annual certainty conference in Boston illustrated our scientific and technological leadership and provided clear evidence that our customers are looking for us to innovate.

what makes these valuable to our customers is The Cutting Edge science, proprietary data, intellectual property, thousands of validated biological parameters, unmatched computational, precision and auditable, transparency, that regulated, science demands,

Speaker #3: And front of more than 400 attendees, we showcased the latest in MIDD and AI-enabled technology capabilities for more than a dozen products leveraging demos, and user groups to collect valuable feedback.

As we move the company forward, there's a window of opportunity for us to drive value from connectivity, across our clinical intelligence capabilities.

Speaker #3: Moving to delivery, let me share a few highlights from the quarter. Our technology and scientific experts supported numerous drug approvals. One notable example was a complex generic of Tazeratine, a dermal product used in the treatment of acne and psoriasis.

We are building an AI-integrated platform that sits on top of and complements our existing portfolio. This next-generation platform will give researchers the ability to interrogate Sara's full body of knowledge across product data sets and scientific expertise.

To get accurate, trusted answers to increasingly complex questions.

Speaker #3: Certara's PBPK in silicone modeling data was accepted in lieu of a clinical endpoint bioequivalent study. This is only the second time ever that PBPK modeling has been used to enable of running clinical trials.

William Feehery: Our annual Certainty conference in Boston illustrated our scientific and technological leadership and provided clear evidence that our customers are looking for us to innovate. In front of more than 400 attendees, we showcased the latest in MIDD and AI-enabled technology capabilities for more than a dozen products, leveraging demos and user groups to collect valuable feedback. Moving to delivery, let me share a few highlights from the quarter. Our technology and scientific experts supported numerous drug approvals. One notable example was a complex generic of tazarotene, a dermal product used in the treatment of acne and psoriasis. Certara's PBPK in silico modeling data was accepted in lieu of a clinical endpoint bioequivalence study. This is only the second time ever that PBPK modeling has been used to enable approval of a generic drug in lieu of running clinical trials.

Jon Resnick: Our annual Certainty conference in Boston illustrated our scientific and technological leadership and provided clear evidence that our customers are looking for us to innovate. In front of more than 400 attendees, we showcased the latest in MIDD and AI-enabled technology capabilities for more than a dozen products, leveraging demos and user groups to collect valuable feedback. Moving to delivery, let me share a few highlights from the quarter. Our technology and scientific experts supported numerous drug approvals. One notable example was a complex generic of tazarotene, a dermal product used in the treatment of acne and psoriasis. Certara's PBPK in silico modeling data was accepted in lieu of a clinical endpoint bioequivalence study. This is only the second time ever that PBPK modeling has been used to enable approval of a generic drug in lieu of running clinical trials.

We have created an AI-native team allocated. The investment resources needed for this effort are entering Lighthouse customers.

Our annual certainty conference. In Boston Illustrated, our scientific and technological leadership, and provide a clear evidence that our customers are looking for us to innovate.

Speaker #3: In another example, Certara also demonstrated the real-world impact of MIDD and regulatory success for the leukemia therapy Osimodin, SIMCIP supported the evidence generation journey and approval with the FDA accepting the PBPK modeling results in lieu of clinical studies for at least 10 human trials.

In front of more than 400 attendees. We showcased the latest in MDD in AI enabled. Technology capabilities for more than a dozen products leveraging demos and user groups to collect valuable feedback.

Moving to delivery. Let me share a few highlights from the quarter.

Speaker #3: Significantly reducing development time and cost. Certara scientists published nearly 100 peer-reviewed papers this year. Spanning dose optimization, pediatric development, virtual bioequivalent, and next-generation MIDD frameworks.

Our technology and scientific experts supported numerous drug approvals.

1 notable example was a complex generic of to their team, a dermal, product used in the treatment of acne and psoriasis.

Speaker #3: Which align with the recently published ICM M15 guidance. Focused on the multidisciplinary principles of MIDD. Among these, a publication co-authored with the FDA and MHRA scientists highlighted the expanding role of MIDD in pediatric drug development, showing PBPK as a potential to reduce timelines and costs for pediatric trials by informing dosing.

Sara's pbpk in silico, modeling data was accepted in lieu of a clinical endpoint bioequivalent study.

William Feehery: In another example, Certara also demonstrated the real-world impact of MIDD and regulatory success for their leukemia therapy, osimertinib. Simcyp supported the evidence generation journey and approval, with the FDA accepting the PBPK modeling results in lieu of clinical studies for at least 10 human trials, significantly reducing development time and cost. Certara scientists published nearly 100 peer-reviewed papers this year spanning dose optimization, pediatric development, virtual bioequivalence, and next-generation MIDD frameworks, which align with the recently published ICH M15 guidance focused on the multidisciplinary principles of MIDD. Among these, a publication co-authored with the FDA and MHRA scientists highlighted the expanding role of MIDD in pediatric drug development, showing PBPK has potential to reduce timelines and costs for pediatric trials by informing dosing, study design, extrapolation, and label extension, while reducing unnecessary studies in children.

Jon Resnick: In another example, Certara also demonstrated the real-world impact of MIDD and regulatory success for their leukemia therapy, osimertinib. Simcyp supported the evidence generation journey and approval, with the FDA accepting the PBPK modeling results in lieu of clinical studies for at least 10 human trials, significantly reducing development time and cost. Certara scientists published nearly 100 peer-reviewed papers this year spanning dose optimization, pediatric development, virtual bioequivalence, and next-generation MIDD frameworks, which align with the recently published ICH M15 guidance focused on the multidisciplinary principles of MIDD. Among these, a publication co-authored with the FDA and MHRA scientists highlighted the expanding role of MIDD in pediatric drug development, showing PBPK has potential to reduce timelines and costs for pediatric trials by informing dosing, study design, extrapolation, and label extension, while reducing unnecessary studies in children.

This is only the second time ever that pbk modeling has been used to enable approval of a generic drug in lieu of running clinical trials.

And another example sirara also, demonstrated the real world impact of MDD and Regulatory success for the leukemia therapy. Asimit

Speaker #3: Study design, extrapolation, and label extension while reducing unnecessary studies in children. In addition, one of Certara's leading scientists serves as the editor-in-chief of clinical pharmacology and therapeutics journal, a position she took over from another leading Certara scientist.

Supported the evidence generation journey and approval with the FDA accepting the pbpk modeling results in lie of clinical studies or at least 10 human trials.

Significantly reducing development, time and cost.

For Tara scientists published nearly 100 peer-reviewed papers this year.

Speaker #3: We had several technology advancements in the quarter with AI increasing the productivity of our developers and the value of our technology. There were multiple new releases of our software, including a new version of D360 to help discovery scientists accelerate therapeutic peptide design and optimization, new functionality in Pinnacle 21 to accelerate clinical study startup, and extended reporting functionality in Phoenix Cloud.

Spanning dose optimization pediatric, development virtual bioequivalent and Next Generation, migd Frameworks.

Which will align with the recently published ICM M15 guidance.

Focused on the multi-disciplinary principles of MDD.

Speaker #2: Good day, and thank you for standing by. Welcome to the Certara First Quarter 2026 Earnings Conference Call. At this time, all participants are on a listen-only mode.

Speaker #3: And the release of SIMCIP with expanded simulation and virtual bioequivalent capabilities. To capitalize on these opportunities and prepare to scale, we are taking several decisive actions.

Among these a publication co-authored with the FDA and mhra scientists highlighted, the expanding role of MDD and pediatric drug development showing pbpk as potential to reduce timelines and costs for Pediatric trials by informing dosing.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 101 on your telephone.

William Feehery: In addition, one of Certara's leading scientists serves as the editor-in-chief of Clinical Pharmacology & Therapeutics Journal, a position she took over from another leading Certara scientist. We had several technology advancements in the quarter, with AI increasing the productivity of our developers and the value of our technology. There were multiple new releases of our software, including a new version of D360 to help discovery scientists accelerate therapeutic peptide design and optimization, new functionality in Pinnacle 21 to accelerate clinical study, startup, and extended reporting functionality in Phoenix Cloud, and the release of Simcyp with expanded simulation and virtual bioequivalence capabilities. To capitalize on these opportunities and prepare to scale, we are taking several decisive actions. First, we're focusing our business on accelerating long-term growth by exiting medical writing.

Jon Resnick: In addition, one of Certara's leading scientists serves as the editor-in-chief of Clinical Pharmacology & Therapeutics Journal, a position she took over from another leading Certara scientist. We had several technology advancements in the quarter, with AI increasing the productivity of our developers and the value of our technology. There were multiple new releases of our software, including a new version of D360 to help discovery scientists accelerate therapeutic peptide design and optimization, new functionality in Pinnacle 21 to accelerate clinical study, startup, and extended reporting functionality in Phoenix Cloud, and the release of Simcyp with expanded simulation and virtual bioequivalence capabilities. To capitalize on these opportunities and prepare to scale, we are taking several decisive actions. First, we're focusing our business on accelerating long-term growth by exiting medical writing.

Study design extrapolation and label extension. While it's reducing unnecessary studies in children.

Speaker #3: First, we're focusing our business in accelerating long-term growth by exiting medical writing. Second, we're reorganizing and aligning the company around two distinct growth areas: MIDD and discovery, which we call MID3, and accelerated clinical evidence, which we call ACE.

Speaker #2: You will then hear an automated message advising your hand is raised. To withdraw your question, please press

Speaker #2: star 101 again. Please be advised

Speaker #2: today's conference is being recorded. I would now like

In addition 1 of Sara's leading scientists serves as the editor and chief clinical pharmacist pharmacology and therapeutic Journal a position. She took over from another leading Sitara scientist.

Speaker #2: To end the conference, over to your speaker today, David.

Speaker #2: Deichler of Certara. Please go

Speaker #2: ahead.

Speaker #3: Thank you all for participating in today's conference.

We had several technology advancements in the quarter with AI, increasing the productivity of our developers and the value of our technology.

Speaker #3: Third, we're creating a stronger center of gravity for AI across the company. Formalizing leadership with a chief AI officer and increasing investment in our next-generation Certara platform.

Speaker #3: call. I'm the call from Certara. We have John

Speaker #3: Resnick, Chief Executive Officer. And John,

Speaker #3: Gallagher, Chief Financial Officer. Earlier

Speaker #3: today, Certara released financial results for the

Speaker #3: quarter ended March 31st,

Speaker #3: 2026. A copy of the press release is

Speaker #3: Fourth, we're extending our capabilities and reach with strategic collaborations and partnerships highlighted by NVIDIA and Altasciences. Fifth, we're reviewing opportunities to leverage our existing clinical intelligence capabilities into new use cases, and sixth, improving execution and efficiency.

Speaker #3: available on the company's website. Before

Speaker #3: We begin, I would like to remind you that management will make

Speaker #3: statements during this call that include

Speaker #3: Forward-looking statements and actual results may

There were multiple new releases of our software, including a new version of D360 to help discovery scientists accelerate therapeutic peptide design and optimization, new functionality in Pinnacle 21 to accelerate clinical study start-ups, and extended reporting functionality in Phoenix Cloud, and the release of Simpson.

Speaker #3: differ materially from those expressed or implied in the

Speaker #3: forward-looking statements. Please refer to

Tip with expanded simulation and virtual bioequivalence capabilities.

Speaker #3: slide 2 in the accompanying materials for additional

Speaker #3: information, which you can find on the company's

Speaker #3: investor relations website. In

To capitalize on these opportunities and prepare to scale, we are taking several decisive actions.

Speaker #3: their remarks and responses to questions,

Speaker #3: Focusing on the first action, on Friday, we closed the divestiture of the regulatory writing and medical writing business to Veristat. This transaction allows us to sharpen our focus in areas we have defined competitive and scientific advantage, results in a nearly one-to-one alignment between our expert services and our technology, where our value proposition is the strongest.

Speaker #3: management may mention some non-GAAP

William Feehery: Second, we're reorganizing and aligning the company around two distinct growth areas, MIDD and discovery, which we call MID3 and accelerated clinical evidence, which we call ACE. Third, we're creating a stronger center of gravity for AI across the company, formalizing leadership with a chief AI officer and increasing investment in our next-generation Certara platform. Fourth, we're extending our capabilities and reach with strategic collaborations and partnerships highlighted by NVIDIA and Altasciences. Fifth, we're reviewing opportunities to leverage our existing clinical intelligence capabilities into new use cases. Sixth, improving execution and efficiency. Focusing on the first action, on Friday, we closed the divestiture of the regulatory writing and medical writing business to Veristat.

Jon Resnick: Second, we're reorganizing and aligning the company around two distinct growth areas, MIDD and discovery, which we call MID3 and accelerated clinical evidence, which we call ACE. Third, we're creating a stronger center of gravity for AI across the company, formalizing leadership with a chief AI officer and increasing investment in our next-generation Certara platform. Fourth, we're extending our capabilities and reach with strategic collaborations and partnerships highlighted by NVIDIA and Altasciences. Fifth, we're reviewing opportunities to leverage our existing clinical intelligence capabilities into new use cases. Sixth, improving execution and efficiency. Focusing on the first action, on Friday, we closed the divestiture of the regulatory writing and medical writing business to Veristat.

Speaker #3: financial measures, reconciliations of

First, we're focusing our business and accelerating long-term growth by exiting medical writing.

Speaker #3: these non-GAAP financial measures to the most directly

Speaker #3: comparable GAAP measures, are available in

Speaker #3: the recent earnings press release available on the

Speaker #3: company's website. Please refer to the

Speaker #3: reconciliation tables in the accompanying materials for

Speaker #3: additional information. This conference

Second where we organizing and aligning the company around 2, distinct growth areas MDD and discovery which we call M3 and accelerated clinical evidence which we call Ace.

Speaker #3: call contains time-sensitive information and is

Speaker #3: Accurate only as of the live broadcast.

Speaker #3: today, May 11th,

Third, you're creating a stronger center of gravity for AI across the company.

Speaker #3: 2026. Certara disclaims any obligation

Speaker #3: Improves the predictability of our revenue and unlocks approximately $150 basis points of incremental growth in 2027 and beyond. Second, we are reorganizing the company into two groups to accelerate growth and better service our customers.

Speaker #3: except as required by law to update or revise

Speaker #3: any financial projections or

Speaker #3: forward-looking statements, whether because of new information or

Formalizing leadership with the chief AI officer and increasing investment in our next Generation certara platform.

Speaker #3: future events or otherwise. And with

Speaker #3: With that, I will turn the call over to

Speaker #3: John.

Speaker #4: Good morning. Thank you

Speaker #4: all for joining today's

Forth. We're extending our capabilities and reach with strategic collaborations and Partnerships highlighted by Nvidia and Alta Sciences.

Speaker #4: call. Since we last spoke, I

Speaker #3: MID3 and ACE. Within MID3, we have merged our technology and expert services into one organization, creating a flywheel for technology innovation and customer engagement.

Speaker #4: have crossed over the 100-day

Speaker #4: mark at Certara, and I continue to

Speaker #4: be incredibly impressed by

Speaker #4: many things within the

New use cases and 6 improving, execution and efficiency.

Speaker #4: company. We are differentiated by our

Speaker #4: world-leading scientists,

Speaker #3: ACE's mission is to reduce data timelines along the full lifecycle from design through and beyond submission. While maintaining or improving quality at every step in the process.

Speaker #4: institutional knowledge,

William Feehery: This transaction allows us to sharpen our focus in areas we have defined competitive and scientific advantage, results in a nearly 1-to-1 alignment between our expert services and our technology, where our value proposition is the strongest, improves the predictability of our revenue, and unlocks approximately 150 basis points of incremental growth in 2027 and beyond. Second, we are reorganizing the company into 2 groups to accelerate growth and better service our customers, MID3 and ACE. Within MID3, we have merged our technology and expert services into one organization, creating a flywheel for technology, innovation, and customer engagement.

Jon Resnick: This transaction allows us to sharpen our focus in areas we have defined competitive and scientific advantage, results in a nearly 1-to-1 alignment between our expert services and our technology, where our value proposition is the strongest, improves the predictability of our revenue, and unlocks approximately 150 basis points of incremental growth in 2027 and beyond. Second, we are reorganizing the company into 2 groups to accelerate growth and better service our customers, MID3 and ACE. Within MID3, we have merged our technology and expert services into one organization, creating a flywheel for technology, innovation, and customer engagement.

Speaker #4: regulatory leadership, and our fit-for-purpose

Speaker #4: technology. That is embedded

Speaker #4: in customer and regulator's

Speaker #4: workflows. Our

Speaker #4: clinical intelligence

Speaker #3: Both groups will be supported by a chief product officer, reporting to me, who will oversee product development across the organization. We are engaged in an active search for this position.

Speaker #4: capability is the logic built into our

Speaker #4: technology: mining the latest

Focusing on the first action on Friday. We closed the divestiture of the regulatory writing and medical writing business to verify that this transaction allows us to sharpen our focus in areas. We have defined competitive and scientific Advantage results in a nearly 1 to 1 alignment between our expert services, and our technology.

Speaker #4: science and drawing on what our

Where our value proposition is the strongest.

Speaker #4: experts know, our interactions

Speaker #4: with regulators, over decades,

Speaker #3: Third, we have appointed Dr. Chris Bouton as our chief AI officer. Further evidence of our commitment to drive innovative solutions that turn decades of cross-program scientific and regulatory intelligence into market-leading AI-integrated capabilities.

Speaker #4: and what thousands of drug

Speaker #4: development successes and failures have

Speaker #4: taught

Speaker #4: us. Certara products and services

Improves the predictability of our revenue and unlocks approximately 150 basis points of incremental growth in 2027 and beyond.

Speaker #4: are integral to the drug development

Speaker #4: process and increasingly

Speaker #4: scalable through the use of AI

Second, we are reorganizing the company into two groups to accelerate growth and better serve our customers.

Speaker #4: technologies.

Speaker #3: Chris also serves as our chief technology officer and led Certara's AI implementation efforts. In his expanded role, Chris will drive the acceleration of Certara's next-generation platform.

Speaker #4: Having exited the listening and learning

Speaker #4: phase, my attention has

Speaker #4: transitioned to helping Certara reach its full

Speaker #4: potential. First

Speaker #4: quarter performance was in line with our

William Feehery: ACE's mission is to reduce data timelines along the full lifecycle from design through and beyond submission while maintaining or improving quality at every step in the process. Both groups will be supported by a Chief Product Officer, reporting to me, who will oversee product development across the organization. We are engaged in an active search for this position. Third, we have appointed Dr. Chris Bouton as our Chief AI Officer. Further evidence of our commitment to drive innovative solutions that turn decades of cross-program scientific and regulatory intelligence into market-leading AI integrated capabilities. Chris also serves as our Chief Technology Officer and led Certara's AI implementation efforts. In his expanded role, Chris will drive the acceleration of Certara's next generation platform. Fourth, we are taking a new approach to partnerships.

Jon Resnick: ACE's mission is to reduce data timelines along the full lifecycle from design through and beyond submission while maintaining or improving quality at every step in the process. Both groups will be supported by a Chief Product Officer, reporting to me, who will oversee product development across the organization. We are engaged in an active search for this position. Third, we have appointed Dr. Chris Bouton as our Chief AI Officer. Further evidence of our commitment to drive innovative solutions that turn decades of cross-program scientific and regulatory intelligence into market-leading AI integrated capabilities. Chris also serves as our Chief Technology Officer and led Certara's AI implementation efforts. In his expanded role, Chris will drive the acceleration of Certara's next generation platform. Fourth, we are taking a new approach to partnerships.

M3 and Ace within M3. We have merged our technology and expert Services into 1 organization. Creating a flywheel for Technology. Innovation and customer engagement.

Speaker #4: expectations. But does not

Speaker #4: reflect the company's

Speaker #3: Fourth, we are taking a new approach to partnerships. In April, we entered into a strategic collaboration with NVIDIA to apply accelerated computing and AI to Certara's next-generation platform.

Speaker #4: potential. I am focused on driving

Speaker #4: long-term, durable growth across the

AC's mission is to reduce data timelines, along the full, life cycle, from design through and Beyond the submission.

Speaker #4: organization by reshaping our business

Speaker #4: and portfolio strategy,

While maintaining or improving quality at every step in the process?

Speaker #4: while instilling increased

Speaker #3: This partnership will reduce manual, time-intensive steps and shift biosimulation from sequential processes to parallel iterative workflows. This is particularly important for Certara's computationally intensive applications.

Speaker #4: organizational and operational

Speaker #4: rigor. Today, we will discuss our

Speaker #4: markets and outline the steps we

Speaker #4: are taking to position the company for

Both groups will be supported by a Chief Product Officer, reporting to me, who will oversee product development across the organization. We are engaged in an active search for this position.

Speaker #4: long-term success before

Speaker #4: wrapping up with our first quarter

Speaker #4: performance. Let me start by

Third, we have appointed Dr. Chris Bhutan as our chief AI officer.

Speaker #3: We've been hard at work at this collaboration and will communicate more details soon. We've also expanded our commercial collaboration. Most notably, through a new relationship with Altasciences, a forward-thinking integrated CRO CDMO, together we are advancing a model-first, fully integrated and resource-efficient approach to early drug development that accelerates the path to proof-of-concept for biotech innovators and investors and pharmaceutical companies across the globe.

Speaker #4: updating you on our end

Speaker #4: markets. Across

Speaker #4: the board, customers are increasing

Speaker #4: investment in AI and tech-enabled

Speaker #4: drug discovery capabilities.

Further evidence of our commitment to drive innovative solutions that turn decades across program scientific and Regulatory intelligence in the market leading AI integrated capabilities.

Speaker #4: Today, there are over 200 AI

Speaker #4: design molecules and clinical

Speaker #4: development, up from just a few 10 years ago

Speaker #4: ago. Eli Lilly has partnered

Speaker #4: with NVIDIA to build a dedicated AI

Speaker #4: lab, and Roche Genentech

Chris also serves as our Chief Technology Officer and led Sara's AI implementation efforts and its expanded role. Crystal drove the acceleration of Sara's next generation platform.

Speaker #4: is launching a hybrid cloud

William Feehery: In April, we entered into a strategic collaboration with NVIDIA to apply accelerated computing and AI to Certara's next generation platform. This partnership will reduce manual, time-intensive steps and shift biosimulation from sequential processes to parallel iterative workflows. This is particularly important for Certara's computationally intensive applications. We've been hard at work at this collaboration, and we'll communicate more details soon. We've also expanded our commercial collaboration, most notably through a new relationship with Altasciences, a forward-thinking integrated CRO/CDMO. Together, we are advancing a model-first, fully integrated, and resource-efficient approach to early drug development that accelerates the path to proof of concept for biotech innovators, investors, and pharmaceutical companies across the globe. These collaborations will strengthen Certara's underlying technology and enable us to bring value to new customers.

Jon Resnick: In April, we entered into a strategic collaboration with NVIDIA to apply accelerated computing and AI to Certara's next generation platform. This partnership will reduce manual, time-intensive steps and shift biosimulation from sequential processes to parallel iterative workflows. This is particularly important for Certara's computationally intensive applications. We've been hard at work at this collaboration, and we'll communicate more details soon. We've also expanded our commercial collaboration, most notably through a new relationship with Altasciences, a forward-thinking integrated CRO/CDMO. Together, we are advancing a model-first, fully integrated, and resource-efficient approach to early drug development that accelerates the path to proof of concept for biotech innovators, investors, and pharmaceutical companies across the globe. These collaborations will strengthen Certara's underlying technology and enable us to bring value to new customers.

Speaker #4: AI factory to scale their

Speaker #4: discovery and development

Speaker #4: efforts. Amazon has also announced a

Speaker #4: biodiscovery product through

Speaker #3: These collaborations will strengthen Certara's underlying technology and enable us to bring value to new customers. Fifth, after completing a review of our portfolio and market opportunities, we've identified several new potential use cases that build up our clinical intelligence capabilities.

Speaker #4: AWS, additionally OpenAI and

Speaker #4: Anthropic have announced LLMs for

Speaker #4: life

Speaker #4: science. The expansion of the

Speaker #4: Use case in AI is consistent with...

Speaker #4: Certara's approach using analytical

Forth. We are taking a new approach to Partnerships in April. We entered into a strategic collaboration with Nvidia to apply accelerated Computing and AI to Sara's Next Generation platform. This partnership will reduce manual time-intensive steps and shift. Bio simulation from sequential processes to parallel iterative work flows.

Speaker #4: techniques embedded in

Speaker #4: customers' workflow to accelerate

Speaker #4: the drug discovery and development

Speaker #4: processes, while reducing the

Speaker #3: For example, clinical trial simulation and asset evaluation, to name just two. We are actively evaluating investment opportunities in these areas. There is excitement across the organization about these opportunities.

Speaker #4: reliance on living subjects.

This is particularly important for Sara's computationally intensive applications. We've been hard at work on this collaboration and will communicate more details soon.

Speaker #4: As AI-driven drug development helps

Speaker #4: the industry deliver more molecules and

Speaker #4: innovation, demand will

Speaker #4: increase for Certara's core

Speaker #4: business: model-informed drug development, or

Speaker #4: MIDD. As

Speaker #3: Finally, we are taking decisive steps on the operational side of the business to drive efficiency. Accountability and growth. We have deployed focused SWOT teams to address needed cultural shifts, simplify processes, accelerate technology development, and improve execution.

Speaker #4: customers race to turn drug candidates

Speaker #4: into approved treatments for

Speaker #4: patients, accelerating data

Speaker #4: analytics processes becomes

Speaker #4: more important than ever as the

Speaker #4: decades-long goal of reducing drug

Speaker #4: application timelines comes within

We have also expanded our commercial collaboration, most notably through a new relationship with all the Sciences, a forward-thinking integrated cro cdmo together. We are advancing and model first fully integrated and resource efficient approach to early drug development, that accelerates the path to proof of concept for biotech. Innovators investors and pharmaceutical companies across the globe.

Speaker #4: reach. In Certara's core business,

Speaker #3: We are aligning sales and marketing to our new structure to clarify accountability and drive customer centricity. We are taking a data-driven approach to leveraging AI to better target and identify opportunities.

Speaker #4: February, the ICH released

Speaker #4: providing guidance of the general

William Feehery: Fifth, after completing a review of our portfolio and market opportunities, we've identified several new potential use cases that build off our clinical intelligence capabilities. For example, clinical trial simulation and asset evaluation, to name just two. We are actively evaluating investment opportunities in these areas. There is excitement across the organization about these opportunities. Finally, we are taking decisive steps on the operational side of the business to drive efficiency, accountability, and growth. We have deployed focused SWAT teams to address needed cultural shifts, simplify processes, accelerate technology development, and improve execution. We are aligning sales and marketing to our new structure to clarify accountability and drive customer centricity. We are taking a data-driven approach to leveraging AI to better target and identify opportunities. Multiple efforts are underway to both review and optimize pricing, but also to explore more structural changes to how clients consume our solutions.

Jon Resnick: Fifth, after completing a review of our portfolio and market opportunities, we've identified several new potential use cases that build off our clinical intelligence capabilities. For example, clinical trial simulation and asset evaluation, to name just two. We are actively evaluating investment opportunities in these areas. There is excitement across the organization about these opportunities. Finally, we are taking decisive steps on the operational side of the business to drive efficiency, accountability, and growth. We have deployed focused SWAT teams to address needed cultural shifts, simplify processes, accelerate technology development, and improve execution. We are aligning sales and marketing to our new structure to clarify accountability and drive customer centricity. We are taking a data-driven approach to leveraging AI to better target and identify opportunities. Multiple efforts are underway to both review and optimize pricing, but also to explore more structural changes to how clients consume our solutions.

These collaborations will strengthen Sara's, underlying technology and enable us to bring value to new customers.

Speaker #4: principles for model-informed drug

Speaker #4: development. Which establishes an

Speaker #4: overarching set of principles for the acceptance

Speaker #4: of MIDD applications by

Speaker #3: Multiple efforts are underway to both review and optimize pricing, but also to explore more structural changes to how clients consume our solutions. We are also updating incentives to drive the right behaviors and encourage cross-functional collaboration.

Speaker #4: regulators globally. In

Speaker #4: March, the FDA published guidance

Speaker #4: on the general consideration for the

Speaker #4: use of new approach methodologies, or

Fifth, after completing a review of our portfolio and market opportunities, we've identified several new potential use cases that build up our clinical intelligence capabilities. For example, clinical trial simulation and asset evaluation, to name just two.

Speaker #4: NAMs, in drug development.

Speaker #4: And more recently, in April,

We are actively evaluating investment opportunities in these areas.

Speaker #4: the FDA announced a major initiative to

Speaker #3: And we're also rationalizing internal spend to shore up our cost-based and maximize investment efficiency. Let me turn to the first quarter results. The team's focus on technology resulted in improved performance over the second half of 2025, particularly in MIDD.

Speaker #4: implement real-time clinical

Speaker #4: trials. A shift to eliminate the

There is a excitement of the organization about these opportunities.

Speaker #4: delays that have historically slowed regulatory

Speaker #4: Decisions. As FDA leadership has said,

Speaker #4: the agency has been conducting clinical

Speaker #4: trials the same way for

Speaker #4: decades.

Finally, we are taking decisive steps on the operational side of the business, to drive efficiency, accountability, and growth. We have deployed focused SWAT teams to address needed cultural shifts.

Speaker #4: Where key data signals and lag time

Speaker #4: have delayed regulatory decisions

Speaker #3: This is a good start for the year, but we need to see consistent performance. Services performance in the quarter was mixed, after an extremely strong Q4.

Simplify processes, accelerate technology, development and improve execution.

Speaker #4: unnecessarily. Which has slowed

Speaker #4: down drug development timelines.

Speaker #4: These tailwinds present a clear

Speaker #4: opportunity for Certara to tackle

Speaker #3: The operational and commercial changes I outlined earlier are designed to address these gaps. It will take time to achieve our long-term operating goals, and it's important that we make the right decision for Certara's long-term growth and success now.

Speaker #4: historically arduous drug development

Speaker #4: processes. Certara has an

We are aligning sales and marketing to our new structure to clarify accountability and drive customer centricity. We are taking a data-driven approach to leveraging AI to better target and identify opportunities.

Speaker #4: incredible legacy. We

Speaker #4: believe we are unrivaled in MIDD

Speaker #4: Today, because of what was required to

Speaker #4: build it. We have more

William Feehery: We are also updating incentives to drive the right behaviors and encourage cross-functional collaboration. We're also rationalizing internal spend to shore up our cost base and maximize investment efficiency. Let me turn to the first quarter results. The team's focus on technology resulted in improved performance over the second half of 2025, particularly in MIDD. This is a good start for the year, but we need to see consistent performance. Services performance in the quarter was mixed after an extremely strong Q4. The operational and commercial changes I outlined earlier are designed to address these gaps. It will take time to achieve our long-term operating goals, and it's important that we make the right decision for Certara's long-term growth and success now. With that, I will turn the call over to John Gallagher to walk you through our first quarter results and guidance.

Jon Resnick: We are also updating incentives to drive the right behaviors and encourage cross-functional collaboration. We're also rationalizing internal spend to shore up our cost base and maximize investment efficiency. Let me turn to the first quarter results. The team's focus on technology resulted in improved performance over the second half of 2025, particularly in MIDD. This is a good start for the year, but we need to see consistent performance. Services performance in the quarter was mixed after an extremely strong Q4. The operational and commercial changes I outlined earlier are designed to address these gaps. It will take time to achieve our long-term operating goals, and it's important that we make the right decision for Certara's long-term growth and success now. With that, I will turn the call over to John Gallagher to walk you through our first quarter results and guidance.

Speaker #4: than two decades of published scientific

Speaker #4: literature, 2,600

Speaker #3: With that, I will turn the call over to John Gallagher to walk you through our first quarter results and guidance.

Speaker #4: customers around the world.

Speaker #4: I've run over 10,000

Multiple efforts are underway to both review and optimize pricing, but also to explore more structural changes to how clients consume our Solutions. We are also updating incentives to drive the right behaviors and encourage cross-functional collaboration.

Speaker #4: projects and have more than

Speaker #2: Thank you, John. Hello, everyone. Total revenue for the three months ended March 31, 2026, was $106.9 million. Representing year-over-year growth of 1% on a reported basis.

Speaker #4: 160,000 users of our

Speaker #4: technology. Including the

Speaker #4: FDA and Japan's pharmaceutical and

And we're also rationalizing. Internal spend to shore up our cost base and maximize investment efficiency.

Speaker #4: medical devices

Speaker #4: agency. Pinnacle 21 has been used

Speaker #4: to validate more than 36

Speaker #4: trillion data points and support of

Speaker #2: Total bookings in the first quarter were $115.3 million. Which declined 2% from the prior year period. Trailing 12-month bookings were $479.2 million, increasing 5%.

Speaker #4: over 500 approved

Speaker #4: treatments. And we are a team of

Let me turn to the first quarter results. The team's focus on technology resulted in improved performance over the second half of 2025, particularly in MID.

Speaker #4: world-class scientists and are

Speaker #4: proud to have 10 scientists

This is a good start for the year, but we need to see consistent performance.

Speaker #4: recognized in Elsevier's top

Speaker #4: 2% of the world's most cited

Speaker #4: scientists. This is not a

Speaker #2: Software revenue was $49.7 million, in the first quarter, which increased 7% over the prior year period on a reported basis. Growth in the quarter was driven by SimCip, Phoenix, and Kamaxon.

Speaker #4: position that can be replicated

Services performance in the quarter was mixed after an extremely strong Q4 the operational and Commercial changes. I outlined earlier are designed to address these gaps.

Speaker #4: overnight. It is the product of decades

Speaker #4: of scientific rigor,

Speaker #4: regulatory trust, and deep customer

Speaker #4: partnership that many

Speaker #4: underestimate. For

It will take time to achieve our long-term operating goals and is important that we make the right decision for Sara's long-term growth and success. Now

Speaker #4: example, the qualification of our SIMCIP

Speaker #2: Radable and subscription revenue accounted for 57% of first quarter software revenues, consistent with the prior year period. Software bookings were $48.7 million, in the first quarter, which increased 20% from the prior year period.

Speaker #4: Software for the prediction of drug-to-drug interactions in the EMA.

John Gallagher: Thank you, John. Hello, everyone. Total revenue for the 3 months ended 31 March 2026 was $106.9 million, representing year-over-year growth of 1% on a reported basis. Total bookings in Q1 were $115.3 million, which declined 2% from the prior year period. Trailing 12-month bookings were $479.2 million, increasing 5%. Software revenue was $49.7 million in Q1, which increased 7% over the prior year period on a reported basis. Growth in the quarter was driven by Simcyp, Phoenix, and Chemaxon. Ratable and subscription revenue accounted for 57% of Q1 software revenue, consistent with the prior year period. Software bookings were $48.7 million in Q1, which increased 20% from the prior year period.

John Gallagher: Thank you, Jon. Hello, everyone. Total revenue for the 3 months ended 31 March 2026 was $106.9 million, representing year-over-year growth of 1% on a reported basis. Total bookings in Q1 were $115.3 million, which declined 2% from the prior year period. Trailing 12-month bookings were $479.2 million, increasing 5%. Software revenue was $49.7 million in Q1, which increased 7% over the prior year period on a reported basis. Growth in the quarter was driven by Simcyp, Phoenix, and Chemaxon. Ratable and subscription revenue accounted for 57% of Q1 software revenue, consistent with the prior year period. Software bookings were $48.7 million in Q1, which increased 20% from the prior year period.

To walk you through our first quarter results and guidance.

Speaker #4: required two years of engagement with

Thank you John. Hello everyone.

Speaker #4: participants representing all

Speaker #4: 27 member

Speaker #4: states. Our most experienced

Speaker #4: scientists work directly with EMA

Speaker #4: reviewers to evaluate 25 years'

Speaker #2: Trailing 12-month software bookings were $192.2 million, up 8% year-on-year. The software net retention rate was 106 in the quarter. Looking at our software bookings performance by tier, we saw performance at or above plan across all three customer tiers.

Speaker #4: worth of data code and

Total revenue for the 3 months ended March 31st. 2026 was 106.9 million, representing year-over-year growth of 1%. On a reported basis.

Speaker #4: process documentation to gain approval

Speaker #4: from the EMA. To our knowledge, SIMCIP is the only mechanistic modeling software qualified in Europe at this critical level.

Total bookings in the first quarter were 115.3 million, which declined, 2% from the prior year period.

Trailing 12-month bookings were 479.2 million increasing 5%.

Speaker #2: Which was nice to see, following a mixed fourth quarter performance. Now turning to services revenue, which was $57.2 million in the first quarter, down 4% versus the prior year period on a reported basis.

Software revenue was $49.7 million in the first quarter, which increased 7% over the prior year period on a reported basis.

Growth in the quarter was driven by Simcyp, Phoenix, and Kamada.

Speaker #2: We saw mixed results in our MIDD services business in the quarter, reflecting the operational dynamics John mentioned earlier, which was compounded by softness and regulatory services.

Radical and subscription Revenue, accounted for 57% of first quarter software revenues consistent with the prior year period.

John Gallagher: Trailing twelve-month software bookings were $192.2 million, up 8% year on year. The software net retention rate was 106 in the quarter. Looking at our software bookings performance by tier, we saw performance at or above plan across all 3 customer tiers, which was nice to see following a mixed Q4 performance. Turning to services revenue, which was $57.2 million in Q1, down 4% versus the prior year period on a reported basis. We saw mixed results in our MIDD services business in the quarter, reflecting the operational dynamics John mentioned earlier, which was compounded by softness in regulatory services. Services bookings in Q1 were $66.6 million, which declined 14% from the prior year period.

Speaker #2: Services bookings in the first quarter were $66.6 million, which declined 14% from the prior year period. TTM services bookings were $286.9 million, up 2% compared to the prior year.

Software bookings were $48.7 million in the first quarter, which increased 20% from the prior year period. Trailing 12-month software bookings were $192.2 million, up 8% year-on-year.

The software net retention rate was 106 in the quarter.

Speaker #2: After a strong fourth quarter, we saw softer performance from tier one customers in MIDD services during the first quarter. Total cost of revenue for the first quarter of 2026 was $41.6 million, a slight increase from $41.5 million in the first quarter of 2025.

Looking at our software bookings performance by tier we saw performance at or above plan across all 3. Customer tears. Which was nice to see following a mixed fourth quarter performance.

Now, turning to Services Revenue, which was 57.2 million in the first quarter down 4% versus the prior year period on a reported basis.

Speaker #2: Total operating expenses for the first quarter of 2026 were $111.2 million, an increase from $98.4 million in the first quarter of 2025, primarily due to a $7.4 million increase in the change in fair value of a contingent consideration related to the buy asset acquisition.

We saw mixed results in our MIDB service business in the quarter, reflecting the operational dynamics John mentioned earlier, which was compounded by softness in regulatory services.

John Gallagher: TTM services bookings were $286.9 million, up 2% compared to the prior year. After a strong Q4, we saw softer performance from tier one customers in MIDD services during the Q1. Total cost of revenue for Q1 2026 was $41.6 million, a slight increase from $41.5 million in Q1 2025. Total operating expenses for Q1 2026 were $111.2 million, an increase from $98.4 million in Q1 2025, primarily due to a $7.4 million increase in the change in fair value of a contingent consideration related to the Vyasa acquisition.

Services. Bookings. In the first quarter were 66.6 million, which declined 14% from the prior year, period.

Speaker #2: Adjusted EBITDA for the first quarter of 2026 was $31.7 million, a decrease from $34.8 million in the first quarter of 2025. Adjusted EBITDA margin in the quarter was 30%.

TTM Services. Bookings were 286.9 million up 2% compared to the prior year.

After a strong fourth quarter, we saw a softer performance from Tier 1 customers in mibb Services during the first quarter.

Speaker #2: Wrapping up the income statement, note the gap net income and EPS are both impacted by non-recurring items. Net loss for the first quarter of 2026 was $8.8 million, compared to net income of $4.7 million in the first quarter of 2025.

Total cost of revenue for the first quarter of 2026 was 41.6 million, a slight increase from 41.5 million in the first quarter of 2025.

Speaker #2: Reported adjusted net income for the first quarter of 2026 was $14.5 million, compared to $22.2 million for the first quarter of 2025. Diluted loss per share for the first quarter of 2026 was $0.06, compared to earnings of $0.03 per share in the first quarter of 2025.

John Gallagher: Adjusted EBITDA for Q1 2026 was $31.7 million, a decrease from $34.8 million in Q1 2025. Adjusted EBITDA margin in the quarter was 30%. Wrapping up the income statement. Note that GAAP net income and EPS are both impacted by non-recurring items. Net loss for Q1 2026 was $8.8 million compared to net income of $4.7 million in Q1 2025. Reported adjusted net income for Q1 2026 was $14.5 million compared to $22.2 million for Q1 2025. Diluted loss per share for Q1 2026 was $0.06 compared to earnings of $0.03 per share in Q1 2025.

Total operating expenses for the first quarter of 2026 were 111.2 million and increase from 98.4 million. In the first quarter of 2025 primarily due to a 7.4 million increase in the change. In fair, value of a contingent consideration related to the bias acquisition.

Speaker #2: Adjusted diluted earnings per share for the first quarter of 2026 were $0.09, compared to $0.14 per share in the first quarter of last year.

Adjusted ebitda for the first quarter of 2026 was 31.7 million, a decrease from 34.8 million in the first quarter of 2025.

Adjusted ebita margin in the quarter was 30%.

Speaker #2: Moving to the balance sheet, we finished the quarter with $149.5 million in cash and cash equivalents. As of March 31, 2026, we had $294.8 million of outstanding borrowings on our term loan, and full availability under our revolving credit facility.

Wrapping up the income statement, note that GAAP net income and EPS are both impacted by non-recurring items.

Net loss for the first quarter of 2026 was $8.8 million, compared to net income of $4.7 million in the first quarter of 2025.

Speaker #2: Last year, our board authorized a $100 million share repurchase program. We have repurchased approximately $82.6 million of stock since that authorization, including $40 million during the first quarter of 2026.

Reported adjusted net income for the first quarter of 2026 was $14.5 million, compared to $22.2 million for the first quarter of 2025.

Speaker #2: Today, we announced the closing of the regulatory writing and medical writing services divestiture. As a reminder, in 2025, these businesses generated $50 million of revenue, and approximately $17 million of adjusted EBITDA, excluding unallocated overhead expenses.

John Gallagher: Adjusted diluted earnings per share for Q1 2026 were $0.09 compared to $0.14 per share in Q1 of last year. Moving to the balance sheet. We finished the quarter with $149.5 million in cash and cash equivalents. As of 31 March 2026, we had $294.8 million of outstanding borrowings on our term loan and full availability under our revolving credit facility. Last year, our board authorized a $100 million share repurchase program. We have repurchased approximately $82.6 million of stock since that authorization, including $40 million during Q1 2026. Today, we announced the closing of the regulatory writing and medical writing services divestiture.

Diluted loss per share for the first quarter of 2026 was $0.06, compared to earnings of $0.03 per share in the first quarter of 2025.

Adjusted diluted earnings per share for the first quarter of 2026 were $0.09, compared to $0.14 per share in the first quarter of last year.

Speaker #2: During the first quarter of 2026, they contributed approximately $13 million in revenue, and we expect to recognize approximately $5 million from them in the second quarter.

Moving to the balance sheet, we finished the quarter with $149.5 million in cash and cash equivalents.

Speaker #2: Going forward, we anticipate our revenue mix to be approximately 50% software and 50% services. With that in mind, we are updating our full year 2026 guidance to reflect the divestiture as follows.

As of March 31st 2026, we had 294.8 million of outstanding borrowings on our Term Loan and full availability under our revolving credit facility.

Speaker #2: We now expect 2026 reported full year revenue to be in the range of $395 to $405 million. Including the $18 million I just referenced related to the divested business.

Last year, our board authorized a $100 million share repurchase program. We have repurchased approximately $82.6 million of stock since that authorization, including $40 million during the first quarter of 2026.

John Gallagher: As a reminder, in 2025, these businesses generated $50 million of revenue and approximately $17 million of adjusted EBITDA, excluding unallocated overhead expenses. During Q1 2026, they contributed approximately $13 million in revenue, and we expect to recognize approximately $5 million from them in Q2. Going forward, we anticipate our revenue mix to be approximately 50% software and 50% services. With that in mind, we are updating our full year 2026 guidance to reflect the divestiture as follows. We now expect 2026 reported full-year revenue to be in the range of $395 to 405 million, including the $18 million I just referenced related to the divested business.

Today, we announced the closing of the regulatory writing and medical writing services divestiture.

Speaker #2: This outlook reflects full year growth of 0 to 4%, excluding the divested business in both periods. And is consistent with our prior growth expectations from the call in February.

Overhead expenses.

Speaker #2: We expect first half revenue growth to be closer to the low end of the 0 to 4% range, while the second half is expected to be at or above the high end of the range.

During the first quarter of 2026, they contributed approximately $13 million in revenue, and we expect to recognize approximately $5 million from them in the second quarter.

Speaker #2: We anticipate full year software growth to be at or above the high end of the 0 to 4% range for the year, with first half closer to the midpoint and second half above the high end of the range.

Going forward, we anticipate our Revenue mix to be approximately 50% software, and 50% services.

With that in mind, we are updating our full-year 2026 guidance to reflect the best teacher as follows.

Speaker #2: The software outlook contemplates higher visibility compared with last year, and we are optimistic about opportunities for newly introduced products. In services, we expect full year growth to be towards the low end of the 0 to 4% range.

John Gallagher: This outlook reflects full-year growth of 0% to 4%, excluding the divested business in both periods, and is consistent with our prior growth expectations from the call in February. We expect H1 revenue growth to be closer to the low end of the 0% to 4% range, while H2 is expected to be at or above the high end of the range. We anticipate full-year software growth to be at or above the high end of the 0% to 4% range for the year, with H1 closer to the midpoint and H2 above the high end of the range. The software outlook contemplates higher visibility compared with last year, and we are optimistic about opportunities for newly introduced products.

We now, expect 2026 reported full year Revenue to be in the range of 395 to 405 million, including the 18 million. I just referenced related to the divested business.

Speaker #2: With first half at or below the low end of the range, improving to the high end during the second half of the year. We see the tier two and three end markets improving through the course of the year following a strong capital raising environment through April.

This Outlook reflects full year growth of 0 to 4%, excluding the divested business in both periods and is consistent with our prior growth. Expectations from the call on February.

Speaker #2: Generally, compared to the guidance provided in late February, this more detailed revenue outlook reflects modestly improved software performance and modestly lower services outlook, which we attribute to some of the execution dynamics John referenced in his remarks.

We expect first half Revenue growth, to be closer to the low end of the 0 to 4% range. While the second half is expected to be at or above the high end of the range.

Speaker #2: We anticipate full year 2026 adjusted EBITDA margin to continue to be 30 to 32% range, including contribution from the regulatory writing and medical writing business.

We anticipate full year software growth to be at or above the high end of the 0 to 4% range for the year with first half closer to the midpoint and second, half above the high, end of the range.

John Gallagher: In services, we expect full-year growth to be towards the low end of the 0% to 4% range, with H1 at or below the low end of the range, improving to the high end during the H2 of the year. We see the tier 2 and 3 end markets improving through the course of the year, following a strong capital raising environment through April. Generally, compared to the guidance provided in late February, this more detailed revenue outlook reflects modestly improved software performance and modestly lower services outlook, which we attribute to some of the execution dynamics John referenced in his remarks. We anticipate full-year 2026 adjusted EBITDA margin to continue to be 30% to 32% range, including contribution from the regulatory writing and medical writing business.

The software outlook contemplates higher visibility compared with last year, and we are optimistic about opportunities for newly introduced products.

Speaker #2: First half margins will be modestly below this range, and second half margins will be closer to the higher end of the range. Margin performance through the year reflects higher revenue growth in the second half of the year, as well as improved operating discipline across the organization following the divestiture.

In Services, we expect full-year growth to be towards the low end of the 0% to 4% range, with the first half at or below the low end of the range, improving to the high end during the second half of the year.

We see the tier 2 and 3 end markets improving through the course of the year, following a strong capital raising environment through April.

Speaker #2: We expect adjusted EPS in the range of $35 to $41 per share for the full year, fully diluted shares are expected to be in the range of $157 to $159 million, and we are modeling an effective tax rate of about 30%.

Generally compared to the guidance provided in late February, this more detailed Revenue Outlook reflects modestly. Improved software performance and modestly lower Services Outlook, which we attribute to some of the execution Dynamics, John referenced in his remarks.

Speaker #2: With that, we will open up the call for Q&A. Operator, can you please open the line?

Speaker #1: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star 11 again.

We anticipate full-year 2026 adjusted EBITDA margin to continue to be in the 30 to 32% range.

John Gallagher: H1 margins will be modestly below this range, and H2 margins will be closer to the higher end of the range. Margin performance through the year reflects higher revenue growth in H2 of the year, as well as improved operating discipline across the organization following the divestiture. We expect adjusted EPS in the range of $0.35 to $0.41 per share for the full year. Fully diluted shares are expected to be in the range of 157 to 159 million, and we are modeling an effective tax rate of about 30%. With that, we will open up the call for Q&A. Operator, can you please open the line?

Including contribution from the regulatory writing and medical writing business.

Speaker #1: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Scott Schoenhaus with KeyBank. Your line is open.

In the first half, margins will be modestly below this range, and in the second half, margins will be closer to the higher end of the range.

Margin performance due to the year. Reflects higher Revenue, growth in the second half of the year as well as improved operating discipline across the organization following the divestiture.

Speaker #3: Hey, team. Thanks for taking my questions. So, John, you mentioned this next generation AI platform that you guys are developing. Maybe walk us through the opportunity here, the monetization.

Speaker #3: Is it more a function of drives engagement utilization on the software piece? Are you taking ASP up? Maybe walk us through the dynamics here to bridge us to this opportunity.

We expect adjusted EPS in the range of $0.35 to $0.41 per share for the full year. Fully diluted shares are expected to be in the range of 157 to 159 million, and we are modeling an effective tax rate of about 30%.

Speaker #2: All right. Thanks. Thanks, Scott, for the question. Yeah, we're extremely excited about what sits ahead of us here. First of all, before I get into the detail on the platform itself, I mean, AI more broadly we've taken a step change in terms of our readiness.

Operator: Thank you. Our first question comes from Scott Schoenhaus with KeyBanc Capital Markets. Your line is open.

With that, we will open up the call for Q&A. Operator, can you please open the line?

Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1 (*1) on your telephone. If your question has been answered and you wish to remove yourself from the queue, please press star 1 again. We'll pause for a moment while we compile our Q&A roster.

Speaker #2: We're focused on things like product development, which is the platform, scaling capabilities across the organization, people and talent, how you saw the announcement about Chris, and overall kind of corporate governance of it.

Scott Schoenhaus: Hey, team. Thanks for taking my questions. John, you mentioned this next generation AI platform that you guys are developing. Maybe walk us through the opportunity here, the monetization. Is it more a function of it drives engagement utilization on the software piece? Are you taking ASP up? Maybe walk us through the dynamics here to bridge us to this opportunity.

Scott Schoenhaus: Hey, team. Thanks for taking my questions. Jon, you mentioned this next generation AI platform that you guys are developing. Maybe walk us through the opportunity here, the monetization. Is it more a function of it drives engagement utilization on the software piece? Are you taking ASP up? Maybe walk us through the dynamics here to bridge us to this opportunity.

Our first question comes from Scott Shanhouse with KeyBank. Your line is open.

Hey team. Thanks for taking my questions.

Speaker #2: Obviously, we talked historically about the great position we believe we have and my comments a few minutes ago. I think you heard that foundation, those capabilities that we have over the decades has created real exciting position in terms of embeddedness in client workflow, codification of science, validation, auditability, transparency.

William Feehery: All right. Thanks. Thanks, Scott Schoenhaus, for the question. Yeah, we're extremely excited about what's, you know, ahead of us here. First of all, before I get into the, you know, detail on the platform itself, I mean, AI more broadly, we've taken a step change in terms of our readiness. You know, we're focused on things like product development, which is platform, scaling capabilities across the organization, people and talent. You saw the announcement about Chris Bouton and overall kind of corporate governance of it.

Jon Resnick: All right. Thanks. Thanks, Scott Schoenhaus, for the question. Yeah, we're extremely excited about what's, you know, ahead of us here. First of all, before I get into the, you know, detail on the platform itself, I mean, AI more broadly, we've taken a step change in terms of our readiness. You know, we're focused on things like product development, which is platform, scaling capabilities across the organization, people and talent. You saw the announcement about Chris Bouton and overall kind of corporate governance of it.

So, John, you mentioned this, uh, Next Generation AI platform that you guys are developing. Um, maybe walk us through the opportunity here, the monetization—is it more a function of, uh, drives engagement, utilization on the software piece? Are you taking ASP up? Maybe walk us through the dynamics here to bridge us to this opportunity.

All right. Thanks, thanks Scott for the question. Uh, yeah, we're we're extremely excited about what's it's, you know, ahead of us here.

Speaker #2: In essence, closing that kind of last mile in a regulatory sciences market, our view and our expectation is that there's a spot and a place where Certara's capabilities and know-how and expertise will fit in very well as a complement to what's out there today.

First of all, before I get into the, you know, detail on the platform itself, I mean AI more broadly. Uh we've taken a step change in terms of our readiness.

William Feehery: You know, obviously, we talked historically about the great position we believe we have, and in my comments a few minutes ago, I think you heard that foundation, those capabilities that we have over, you know, the decades, has created real, you know, exciting position in terms of embeddedness in client workflow, codification of science, validation, auditability, and transparency. In essence, closing that kind of last mile. In a regulatory sciences market, you know, our view and our expectation is that there's a spot and a place where Certara's capabilities know how and expertise will fit in very well to complement to what's out there today.

Jon Resnick: You know, obviously, we talked historically about the great position we believe we have, and in my comments a few minutes ago, I think you heard that foundation, those capabilities that we have over, you know, the decades, has created real, you know, exciting position in terms of embeddedness in client workflow, codification of science, validation, auditability, and transparency. In essence, closing that kind of last mile. In a regulatory sciences market, you know, our view and our expectation is that there's a spot and a place where Certara's capabilities know how and expertise will fit in very well to complement to what's out there today.

Speaker #2: So the platform, and I don't want to go into too much detail on exactly what we're doing because I do know that there are others who listen to this call as well, but it's in essence building is an effort for us to unify many of our products and our know-how under a single environment.

That we're focused on things like product development, which is the platform, uh scaling capabilities across the organization, people in Talent, you saw the announcement about Chris and overall kind of corporate governance of it.

Speaker #2: It'll allow us to take all the kind of independent know-how and the independent applications we have and answer questions across the lifecycle. And it's going to create unique business question around kind of guidance and how should you think about it, I think for 2026, as we indicated, we're out talking to Lighthouse clients.

No, obviously, uh, we talked historically about the great position we believe we have and, uh, my comments a few minutes ago, I think you heard, uh, that, uh, foundation—those capabilities that we have over, you know, the decades—it’s created a real, you know, exciting position in terms of embeddedness in client workflow, codification of science, validation, auditability, transparency.

William Feehery: The platform, and I don't want to go into too much detail on exactly what we're doing, because I do know that there are others who listen to this call as well. It's in essence building on these exact capabilities. It is, you know, a effort for us to unify many of our products and our know-how under a single environment. It'll allow us to take all the kind of independent know-how and the independent applications we have and answer questions across the life cycle. It's gonna, you know, create unique business models for us as we move forward. In terms of your question around kind of guidance and how should you think about it, I think for 2026, as we indicated, we're out talking to lighthouse clients. We're out engaging in this.

Jon Resnick: The platform, and I don't want to go into too much detail on exactly what we're doing, because I do know that there are others who listen to this call as well. It's in essence building on these exact capabilities. It is, you know, a effort for us to unify many of our products and our know-how under a single environment. It'll allow us to take all the kind of independent know-how and the independent applications we have and answer questions across the life cycle. It's gonna, you know, create unique business models for us as we move forward. In terms of your question around kind of guidance and how should you think about it, I think for 2026, as we indicated, we're out talking to lighthouse clients. We're out engaging in this.

And our expectation is that there's a spot and a place where Sara's capabilities know how an expertise will fit in, uh, very well as a compliment to what's out there today?

Speaker #2: engaging in this. This is a thing that's now an active discussion. So I wouldn't think too much about near-term modeling. I think what we'll do is provide more guidance towards the end of this year about how you should think about this relative to our conventional software portfolios we think more We're out on platform into 27 and beyond.

So the platform and I don't want to go uh into too much detail on exactly what we're doing because I do know that there are others who listen to this call as well. Uh but it's in essence building on these exact capabilities.

Speaker #1: Thanks. And then my follow-up is the strong software bookings you had this quarter. You mentioned a lot of new products releases. Maybe help us parse out where you're seeing the strongest demand into that bookings strength this quarter on the software side.

It is uh in you know a effort for us to unify many of our products and our know-how under a single environment. Uh it'll allow us to take all the kind of independent know-how the independent applications we have and answer questions.

Across the life cycle.

Speaker #1: Thanks.

Speaker #2: So I think software strong pretty much across the board. This quarter, we've obviously off the soft trailing 12-month number that we saw at the end of last year.

Uh and it's going to, you know, create uh, unique business models for us as we as we move forward. In terms of your question around kind of guidance and how should you think about it? I think for 2026 as we indicated

William Feehery: This is, you know, a thing that's now in active discussion. I wouldn't think too much about near term modeling. I think what we'll do is provide more guidance towards the end of this year about how you should think about this relative, you know, to our conventional software portfolios. We think more on platform into 2027 and beyond.

Jon Resnick: This is, you know, a thing that's now in active discussion. I wouldn't think too much about near term modeling. I think what we'll do is provide more guidance towards the end of this year about how you should think about this relative, you know, to our conventional software portfolios. We think more on platform into 2027 and beyond.

Speaker #2: We put a lot of focus on it. Really got underneath it with our sales teams and looked at incentives and products and plans and have done a lot of work in Q1 really to get ready.

Speaker #2: But it's pretty consistent on Phoenix Cloud. Had a good quarter as a very good pipeline. Works extremely excited about the transition there and the growth.

We're out talking to Lighthouse clients. We're out, uh, engaging in this. This is, you know, a, you know, a thing that's now, in active discussion. So I wouldn't, uh, think too much about, uh, near-term modeling. I think what we'll do is provide more guidance towards the end of this year about how you should think about this relative.

Scott Schoenhaus: Thanks. My follow-up is the strong software bookings you had this quarter, you mentioned a lot of new product releases. Maybe help us parse out where you're seeing the strongest demand into that bookings strength this quarter on the software side. Thanks.

You know, to our conventional software portfolios, we think more on the platform, uh, into '27 and beyond.

Speaker #2: SIMCIP had a good quarter as well. Core kind of PBPK offerings. Pinnacle, which is, as we said before, has ebbs and flows a little bit with new trial starts and is going to be a little bit slower than it has been in past years, actually slightly outperformed expectations in the quarter.

William Feehery: I think software was strong pretty much across the board this quarter. You know, we obviously off to soft trailing twelve-month number that we saw at the end of last year. We put a lot of focus on it. You know, really got underneath it with our sales teams and put the incentives and products and plans and have done a lot of work in Q1 really to get ready. It, it's pretty consistent. Phoenix Cloud had a good quarter. Has a very good pipeline. We're extremely excited about the transition there and the growth. Simcyp had a good, a good quarter as well. Core kind of PBPK offerings.

Jon Resnick: I think software was strong pretty much across the board this quarter. You know, we obviously off to soft trailing twelve-month number that we saw at the end of last year. We put a lot of focus on it. You know, really got underneath it with our sales teams and put the incentives and products and plans and have done a lot of work in Q1 really to get ready. It, it's pretty consistent. Phoenix Cloud had a good quarter. Has a very good pipeline. We're extremely excited about the transition there and the growth. Simcyp had a good, a good quarter as well. Core kind of PBPK offerings.

Thank you, and then my follow-up is the strong software bookings. Uh, you have this quarter, you mentioned a lot of new products releases. Um, maybe help us parse out where you're seeing the strongest. Demand into that bookings. Uh, strength. This quarter on the software side. Thanks.

Speaker #2: So I think just about everything performed at or above expectation.

Speaker #1: Thank you.

Speaker #3: One moment for our next question. Our next question comes from Brendan Smith with TD Cowan. Your line is open.

I think, uh, software strong, pretty much across the board. Uh, this quarter, uh, you know, we we obviously off the soft trailing 12 months number, uh, that we saw at the end of last year, we put a lot of focus on it.

Speaker #1: Great. Thanks for taking the questions, guys. Congrats to all the progress. Maybe just a bit of a follow-up on one of the previous questions, but I guess can you speak a bit more specifically to the new customer mix you're seeing here today?

Speaker #1: I know you mentioned pharma really leaning more into AI, which we continue to see kind of across the board, but also maybe some impact on Tier 1 customers.

William Feehery: Clinical, which is, as we said before, has ebbs and flows a little bit when new trial starts and is gonna be a little bit slower than it has been in past years. Actually slightly outperformed expectations in the quarter. you know, I think just about everything performed at or above expectation.

Jon Resnick: Clinical, which is, as we said before, has ebbs and flows a little bit when new trial starts and is gonna be a little bit slower than it has been in past years. Actually slightly outperformed expectations in the quarter. you know, I think just about everything performed at or above expectation.

Speaker #1: So I guess first, just wondering how the new software adds within pharma compared to maybe new customer ads within smaller emerging biotech and just any trends to call out in those relative buckets.

Speaker #4: Yeah. Hi, Brendan. We were pleased, obviously, with the rebound that we saw with software on the quarter. So to your point, across all customer tiers, one, two, and three, we saw pretty significant acceleration in the bookings.

Scott Schoenhaus: Thank you.

William Feehery: Thank you.

Operator: One moment before our next question. Our next question comes from Brendan Smith with TD Cowen. Your line is open.

Thank you.

1 moment for our next question.

Speaker #4: We saw good achievement on the revenue. With 7% software revenue growth on the quarter, I'd say as it relates to specific within the tiers, we saw Tier 3 customers and Tier 2 customers leaning in on John mentioned before on we saw strong performance in Phoenix as well as in Camaxon.

Brendan Smith: Great. Thanks for taking the questions, guys. Congrats on all the progress. Maybe just a bit of a follow-up on one of the previous questions, but I guess can you speak a bit more specifically to the new customer mix you are seeing here today? I know you mentioned pharma really leaning more into AI, which we continue to see kind of across the board, but also maybe some impact on tier 1 customers. I guess first just wondering how the new software adds within pharma compare to maybe new customer adds within smaller emerging biotech and just any trends to call out in those relative buckets.

Our next. Our next question comes from Brennan Smith with DD cow and your line is open.

Speaker #4: I'd say in the Tier 1 category, we had another good quarter on SIMCIP. So that's an overall highlight of the customer tiers in the quarters.

John Gallagher: Hi, Brendan. We were pleased obviously with the rebound that we saw with software on the quarter. To your point, you know, across all customer tiers 1, 2, and 3, we saw pretty significant acceleration in the bookings. We saw good achievement on the revenue with 7% software revenue growth on the quarter. I'd say, you know, as it relates to specific, you know, within the tiers, we saw tier 3 customers and tier 2 customers leaning in on, you know, John mentioned before on, you know, we saw strong performance in Phoenix as well as in Chemaxon. I'd say in the tier 1 category, we had another good quarter on Simcyp.

Great. Thanks for taking the questions guys. Congrats all the progress, maybe just a bit of a follow-up on on 1 of the previous questions, but I guess. Can you speak a bit more specifically to the new customer mix? You're seeing here today and you mentioned Pharma really leaning more into AI which we continue to see kind of the board but also maybe some impact on on tier 1 customers. So I guess first is wondering how the new software ads within Pharma compared to maybe new customer ads within smaller emerging biotech. It's just any Trends to call out in those relative buckets.

Speaker #4: But they came above expectations on the quarter, which was good on the heels of some choppiness we saw in Q4.

Speaker #1: Okay. Got it. Thanks. And then maybe just a quick follow-up, just kind of talking about the operational efficiencies you mentioned. I know it's being an internal target.

Speaker #1: For kind of helping drive margins, but can you maybe help us understand kind of through that lens, the structure, even of the NVIDIA collaboration really, what that looks like and how we should think about the impact over the next couple of quarters there?

Speaker #1: Thanks.

Speaker #2: So you mentioned execution first. Look, there's a range of initiatives in play. I mean, obviously, today we're announcing both some reorganization work we've done and have done.

John Gallagher: You know, that's, you know, that's a overall highlights of, you know, the customer tiers in the quarters. You know, they came above expectations on the quarter, which was good on the heels of, you know, some choppiness we saw in Q4.

Yeah. Hi Brandon. Um, you we were, we, we, we were pleased obviously with the with the rebound that we saw with, uh, with software on, on, on the quarter. So to your point, you know, across all customer tears, 1, 2 and 3. Uh, we've talked pretty significant acceleration in the bookings. We talked good achievement on the revenue with 7% uh software Revenue growth on the quarter. Um I'd say you know as it relates to uh specific you know, within the tiers we saw uh tier 3 customers and tier 2 customers leaning in on. Um, you know, John mentioned before on, you know, we saw a strong performance in Phoenix as well as in kamax on, uh, I'd say in the Tier 1 category, we had another good quarter on Sims.

Speaker #2: There's divestiture. There's also been a lot of broader work on operational cadence and execution and cost base. So we're moving incredibly quickly. Certainly, at a rate and pace which I'd expect to set up the business for a long term.

Brendan Smith: Okay. Got it. Thanks. Maybe just a quick follow-up, just kind of talking about the operational efficiencies you mentioned, I know it's being an internal target.

Brendan Smith: Okay. Got it. Thanks. Maybe just a quick follow-up, just kind of talking about the operational efficiencies you mentioned, I know it's being an internal target. For, you know, kind of helping drive margins. Can you maybe help us understand kind of through that lens the structure even of the NVIDIA collaboration, really what that looks like and how we should think about the impact over the next couple of quarters there? Thanks.

so, you know, that's, you know, that's a overall highlights of, you know, the customer tears and the quarters, but but, you know, it they came, uh, above expectations on the quarter which was good on the heels of, you know, some choppiness we saw in Q4

Speaker #2: So we can go through some of those mechanics if you want later. But NVIDIA partnership, I think our general mindset on these things is let's not throw out splashy press releases and other things.

David Windley: For, you know, kind of helping drive margins. Can you maybe help us understand kind of through that lens the structure even of the NVIDIA collaboration, really what that looks like and how we should think about the impact over the next couple of quarters there? Thanks.

Speaker #2: Let's talk from a point of substance. We've been working with NVIDIA for the last couple of months through an MOU and through a signed partnership agreement.

Okay, got it. Thanks. Um and then maybe just a quick follow-up just kind of talking about the operational efficiency if you mentioned I know it's being a an internal Target for you know kind of helping Drive margins. Um, but can you can you maybe help us understand kind of through that lens, that the structure even of the Nvidia collaboration, really what that looks like and how we should think about the impact over the next couple of quarters there. Thanks.

William Feehery: You know, you mentioned execution first. Look, there's a range of initiatives in play, you know, obviously today we're announcing, well, some reorganization work we've done, have done. There's a divestiture. There's also been a lot of broader work on operational cadence and execution and cost base. We're moving incredibly quickly, certainly at a rate and pace which I'd expect to set up the business for long term. We can go through some of those mechanics if you want later. The NVIDIA partnership, you know, I think our general mindset on these things is, let's, you know, let's not throw out flashy press releases and other things. Let's talk from a point of substance.

Jon Resnick: You know, you mentioned execution first. Look, there's a range of initiatives in play, you know, obviously today we're announcing, well, some reorganization work we've done, have done. There's a divestiture. There's also been a lot of broader work on operational cadence and execution and cost base. We're moving incredibly quickly, certainly at a rate and pace which I'd expect to set up the business for long term. We can go through some of those mechanics if you want later. The NVIDIA partnership, you know, I think our general mindset on these things is, let's, you know, let's not throw out flashy press releases and other things. Let's talk from a point of substance.

Speaker #2: Really, to define ways of scaling the speed at which you can execute on particularly some of the more complicated simulations. Allowing more democratization, the belief is if we can speed some of the core QSP and PBPK offerings, we can allow for much broader use within organizations so you can get quicker reads on what's going on earlier and kind of meet the expectation that discovery of preclinical users of the applications.

So you, you know, you mentioned execution. Uh, first look, there's a a range of initiatives in play. I mean, obviously today we're not seeing well. Some reorganization work. We've done have done, there's a diversity. There's also been some, a lot of broader work on operational, Cadence and execution, and cost base. Uh, so we're moving uh incredibly quickly, uh certainly uh at a rate and pace which, which I would expect to set up the business for, for a long term. So we can go through some of those mechanics if you want later but, uh, the video partnership. Now, I I think our general mindset on these things is

Speaker #2: So we're excited about it. We'll come back with more details on how to think about it exactly in terms of product development and how to think about it in terms of kind of joint efforts here and its impact in terms of our thinking about overall operational efficiencies.

William Feehery: We've been working with NVIDIA for the last couple months, you know, through an MOU and through a signed partnership agreement, really to define ways of scaling, you know, the speed at which you can execute on particularly some of the more complicated simulations, allowing more democratization. The belief is, you know, if we can speed some of the, you know, core QSP and PBPK offerings, we can, you know, allow for much broader use within organizations. You can get quicker reads on what's going on earlier and kind of meet the expectation of early discovery of preclinical users of the applications. We're excited about it.

Jon Resnick: We've been working with NVIDIA for the last couple months, you know, through an MOU and through a signed partnership agreement, really to define ways of scaling, you know, the speed at which you can execute on particularly some of the more complicated simulations, allowing more democratization. The belief is, you know, if we can speed some of the, you know, core QSP and PBPK offerings, we can, you know, allow for much broader use within organizations. You can get quicker reads on what's going on earlier and kind of meet the expectation of early discovery of preclinical users of the applications. We're excited about it.

Speaker #1: Got it. Thanks, guys.

Speaker #3: One moment for our next question. Our next question comes from Luke Sergot with Barclays. Your line is open.

Speaker #1: Great. Thanks for the questions, guys. I just want to talk about the reorg there that you guys are talking about. Across the two segments and it's more about just the consistency or stability that we could see from software versus services because it seems like one quarter, one of the segments is really strong and then at the expense of the other and then vice versa.

William Feehery: We'll come back with more details on how to think about it exactly in terms of product development and how to think about it in terms of kind of joint, you know, joint efforts here, and its impact in terms of our thinking about overall operational efficiencies.

Jon Resnick: We'll come back with more details on how to think about it exactly in terms of product development and how to think about it in terms of kind of joint, you know, joint efforts here, and its impact in terms of our thinking about overall operational efficiencies.

Uh, let's uh, you know, let's not throw out splashy, press releases and other things. Let's, let's talk a point of substance. We've been working with the video for the last couple months, uh, you know, through an M through an mou and through an assigned partnership agreement, uh, really to Define ways of, uh, scaling, uh, you know, the speed at which you can execute on, uh, on particularly some of the more complicated simulations, allowing more democratization, I believe is, you know, if we can speed, uh, some of the, some of the, you know, core USD and cbtks, we can, uh, you know, allow for uh, much broader use within, uh, within organization. So you can get quicker reads on what's going on earlier, and kind of Meet the expectation, that that discover Discovery of preclinical, uh, users of the of the applications. So we're excited about it.

Speaker #1: And just what you guys are doing to build in some consistency and more sustainability here going forward between the two.

Uh we'll come back with more details on how to think about it. Exactly. In terms of product development, how to think about it in terms of kind of joint.

Speaker #2: Yeah. I've had the same observation. There's been a lot of inconsistency and back and forth over the last few quarters. We clearly put a lot of focus on software this quarter.

Uh, you know, joint efforts here and its impact in terms of our thinking about overall operational efficiencies.

David Windley: Got it. Thanks, guys.

Brendan Smith: Got it. Thanks, guys.

Operator: One moment for our next question. Our next question comes from Luke Sergott with Barclays. Your line is open.

Okay.

Speaker #2: We got a strong software result. So I think our approach moving forward is obviously to try to get that balance right. So there's a number of things.

1 moment for our next question.

Luke Sergott: Great. Thanks for the questions, guys. I just wanna talk about the reorg there that you guys are talking about, across the two segments. It is more about just the consistency or stability that we could see from software versus services, because it seems like, you know, one quarter one of the segments is really strong and then at the expense of the other and then vice versa. Just what you guys are doing to build in some consistency and more sustainability you're going for between the two.

Speaker #2: First of all, the exiting of the regulatory medical writing business will help. That's been an extremely lumpy business on the service side. Our resultant mix of business will be much more mixed between services and software on an ongoing basis, which will give much more predictability into what we do.

Our next question, comes from Luke sergot with barklay, your line is open.

Great, thanks for the questions, guys. Um, I just want to talk about the reorg there that you guys are talking about, um, across the two segments, and is it more about just the consistency or stability that we could see from Software versus Services? Because it seems like

Speaker #2: The exit of the regulatory business, which wasn't really tied to our core software business, as I said last quarter, we do best when our technology and services are integrated in what we've effectively done on the MIDD business here MID3.

William Feehery: Yeah. I've had the same observation. There's been a lot of inconsistency and back and forth over the last few quarters. You know, we clearly put a lot of focus on software this quarter. We got a strong software result. You know, I think our approach moving forward is obviously to try to get that balance right. There's a number of things. First of all, the exiting of the regulatory medical and medical writing business will help. That's been an extremely lumpy business on the service side. Our resultant mix of business will be much more mixed between services and software on an ongoing basis, which will give much more predictability into what we do. The exit of the regulatory business, which wasn't really tied to our core software business.

Jon Resnick: Yeah. I've had the same observation. There's been a lot of inconsistency and back and forth over the last few quarters. You know, we clearly put a lot of focus on software this quarter. We got a strong software result. You know, I think our approach moving forward is obviously to try to get that balance right. There's a number of things. First of all, the exiting of the regulatory medical and medical writing business will help. That's been an extremely lumpy business on the service side. Our resultant mix of business will be much more mixed between services and software on an ongoing basis, which will give much more predictability into what we do. The exit of the regulatory business, which wasn't really tied to our core software business.

You know, one quarter—Q1, Q1—one of the segments is really strong and then at the expense of the other, and then vice versa. And just, what are you guys doing to build in some, uh, consistency and more sustainability going forward between the two?

Speaker #2: We've brought together all of our kind of experts, services, and our technology to create that flywheel effect. So there should be more stability when those two businesses are able to wrap around it.

Speaker #2: We're also taking some steps with our sales teams and our commercial organization to better align specialty engagement on that side. That should drive more predictability.

Speaker #2: I wouldn't say we've completely solved the riddle, but we see the same pattern and obviously we're focused also on creating the incentives in the organization that'll get both of those segments moving at the same rate and pace.

Yeah, I've had the same observation uh there's been a lot of inconsistency and back and forth over the last few quarters, you know, the, the clearly put a lot of focus on software this order, we got a strong software result. So uh, you know, I think our our approach moving forward is obviously to try to get that balance, right? Uh, so there's a number of things, first of all, uh, the exiting of the regulatory medical and medical writing business will help. That's been an extremely wealthy business. Uh, on the, on the server side, uh, our, our resultant mix of business, will be much more mixed between services and software on an ongoing basis, which will get much more predictive.

William Feehery: As I said last quarter, we do best when our technology and services are integrated. What we've effectively done on the MIDD business here, MID3, is we've brought together all of our kind of expert services and our technology to create that flywheel effect. There should be more stability when those two businesses are able to wrap around it. We're also taking some steps with our sales teams and our commercial organization to better align specialty engagement on that side. That should drive more predictability. I wouldn't say we've, you know, completely solved the riddle, but we see the same pattern and obviously we're focused also on creating the incentives in the organization that'll get both of those segments moving at the same written pace.

Jon Resnick: As I said last quarter, we do best when our technology and services are integrated. What we've effectively done on the MIDD business here, MID3, is we've brought together all of our kind of expert services and our technology to create that flywheel effect. There should be more stability when those two businesses are able to wrap around it. We're also taking some steps with our sales teams and our commercial organization to better align specialty engagement on that side. That should drive more predictability. I wouldn't say we've, you know, completely solved the riddle, but we see the same pattern and obviously we're focused also on creating the incentives in the organization that'll get both of those segments moving at the same written pace.

Speaker #1: Great. And then I guess with regards to that kind of when you think about the guidance and the back half step up here, you had a really big bookings that have been pretty good in the services side.

Speaker #1: So when's the timing of there when we see that flow through? And if you could just help us out with the pacing on that services ramp through the year.

Ability, uh, into what we do. Uh, the exit of the regulatory business, which wasn't really tied to our core software business. As I said last quarter, we do best when our technology and services are integrated. And what we've effectively done on the MIBD business here, MIB3, is we've brought together all of our kind of expert services and our technology to create that flywheel effect. So there should be more stability when those two businesses,

Speaker #4: Yeah. So services bookings take a couple of quarters to pull through. One of the focus areas that we've had over the last quarter has been on backlog conversion and we saw good despite the choppiness and softness we saw on the booking side for services.

Speaker #4: We did see very good backlog conversion and we expect to be able to continue that through the course of the year. So backlog is going to help support the revenue achievement, especially in the back half of the year here with the bookings that we posted in Q4 along with the bookings that we're posting now.

Luke Sergott: Great. Now I guess with regards to that kind of when you think about the guidance and the back half step up here, you had a really big bookings have been pretty good in the services side. Like when's the timing of there when we see that flow through? If you could just help us out with the pacing on that services ramp through the year.

Able to, to, to wrap around it. Uh, we're also taking some steps with our sales teams and our commercial organization to better. Align, uh, specialty engagement on that side, that should drive more predictability. I wouldn't say we've, um, you know, completely solved the riddle but we're we're we see the same pattern and obviously your work. Focus is also on creating the incentives in the organization that will get both both of those organ, both of those segments moving, uh, at the same rate and pace,

Speaker #4: What we're seeking to do is drive an inflection point through the execution on ensuring we're filling up that backlog and that some of the focus area that we have right now.

John Gallagher: It services bookings take a couple of quarters to pull through. One of the focus areas that we've had over the last quarter has been on backlog conversion. We saw good despite the choppiness and softness we saw on the booking side for services, we did see very good backlog conversion, and we expect to be able to continue that through the course of the year. Backlog is gonna help support the, you know, the revenue achievement especially in the back half of the year here with the bookings that we posted in Q4, along with the bookings that we're posting now.

Great. Now I guess if for with with regards to that kind of the when you think about the guidance and and the back half uh step up here, you had a really big booking bookings that have been pretty good on the services side. So like when's the timing of their when we see that flow through and if you could just help us out with the pacing on on that Services ramp through the year.

Speaker #1: Great. Thanks.

Speaker #3: One moment for our next question. Our next question comes from David Winley with Jeffrey's. Your line is open.

Speaker #5: Hi. Good morning. Thanks for taking my question. I wanted to ask on the references to execution and go-to-market challenges. That impacted the first quarter.

Speaker #5: I think you've John, you've touched on those that are kind of a high level, but I wanted to understand better was that caused by a lot of the realignment that you talked about and just kind of the intensity of that during the quarter or what in more detail would you use to describe those execution and go-to-market challenges that impacted the first quarter?

John Gallagher: What we're seeking to do is drive an inflection point through the execution on ensuring we're filling up that backlog, and that's some of the focus area that we have right now.

Speaker #5: Thanks.

Speaker #2: Well, first of all, I'd say, David, there's a legacy model that was in place. So a lot of the changes that we're making, I think are meant to enhance it.

Luke Sergott: Great. Thanks.

You know, the revenue achievement, uh, especially in, in the back half of the Year here, with the, um, with, with the bookings that that we posted in Q4 along with the bookings that were, that were posting now where we're seeking to do is drive an inflection point, through the execution on ensuring, we're filling up that backlog, and that some of the focus area that that we have right now.

Great, thanks.

Operator: One moment for our next question. Our next question comes from David Windley with Jefferies. Your line is open.

One moment for our next question.

Speaker #2: I'm pleased by the progress we made on the software side. There was a real focus there and you could see the results of that focus on that side of things.

David Windley: Hi. Good morning. Thanks for taking my question. I wanted to ask on the references to execution and go-to-market challenges that impacted the Q1. I think you, John, you touched on those at kind of a high level, but I wanted to understand better, was that caused by a lot of the realignment that you talked about and just kind of the intensity of that during the quarter, or in more detail would you use to describe those execution and go-to-market challenges that impacted the Q1? Thanks.

David Windley: Hi. Good morning. Thanks for taking my question. I wanted to ask on the references to execution and go-to-market challenges that impacted the Q1. I think you, Jon, you touched on those at kind of a high level, but I wanted to understand better, was that caused by a lot of the realignment that you talked about and just kind of the intensity of that during the quarter, or in more detail would you use to describe those execution and go-to-market challenges that impacted the Q1? Thanks.

Our next question comes from David Windley with Jefferies. Your line is open.

Speaker #2: I think overall, we're looking to is just more consistency across the teams. I mean, we're focused on a few areas. One, how can we make sure we're optimizing expert-to-expert engagement across the business?

Hi, good morning. Thanks for taking my question. I wanted to, uh, ask on the references to execution and go-to-market challenges.

Speaker #2: A lot of these a lot of this a lot of the engagement that happens here is scientist-to-scientist. We want to make sure we're putting that foot forward.

That impacted the first quarter. I think you, John, you touched on those that kind of a high level. But I, I wanted to understand better. It was was that caused by uh, a lot of the realignment that you talked about and, and just kind of the the intensity of that during the quarter or what.

William Feehery: Well, first of all, I'd say, there's a legacy model that was in place. A lot of the changes that we're making, I think are meant to enhance it. I'm pleased by the progress we made on the software side. There was a real focus there, and you can see the results of that focus on that side of things. I think overall, what we're looking to is just more consistency across the teams. We're focused in a few areas. You know, one, how can we make sure we're optimizing expert-to-expert engagement across the business? You know, a lot of these, a lot of the engagement that happens here is scientist to scientist.

Jon Resnick: Well, first of all, I'd say, there's a legacy model that was in place. A lot of the changes that we're making, I think are meant to enhance it. I'm pleased by the progress we made on the software side. There was a real focus there, and you can see the results of that focus on that side of things. I think overall, what we're looking to is just more consistency across the teams. We're focused in a few areas. You know, one, how can we make sure we're optimizing expert-to-expert engagement across the business? You know, a lot of these, a lot of the engagement that happens here is scientist to scientist.

You know, in more detail, would you um use to describe those execution and go to market challenges that impacted the first quarter. Thanks.

Speaker #2: Second area that we're focused in on is expanding partnerships. We mentioned the Altasciences relationship. That really, I hope, signals and reflects a different approach to partnering and a different approach to going to market in different ways.

Well.

Speaker #2: Our offerings are incredibly strong in terms of being complementary to what a number of players have out in market. So there are a number of at-scale players, whether they're venture capital players or whether they're CROs that we're very good potential partners for.

Uh, first of all, I'd say there, there's there's uh, you know, there's a legacy model that was in place, so a lot of the changes that we're making I think are are meant to enhance it. I'm, I'm pleased by the progress. We made on the software side, there was a real Focus there and you can see the results of of that uh, that focus on that side of things, I think.

Speaker #2: So a renewed focus on partnership and how we can drive through. We've leaned in much heavier on a targeting approach. Continuing to focus on tier one, but there's a number of clients in the tier two space that we're working on building out new relationships and extending where the overall integrated tech service proposition fits.

William Feehery: We wanna make sure we're putting that foot forward. Second area that we're focused in on is expanding partnerships. You know, we mentioned the Altasciences relationship. That really I hope signals and reflects a different approach to partnering and a different approach to going to market in different ways. Our offerings are incredibly strong in terms of being complementary to what a number of players have out in market. There are a number of at-scale players, whether they're venture capital players or whether they're CROs that we are, you know, very good potential partners for. A renewed focus on partnership and how we can drive through. We've leaned in much heavier on a targeting approach, you know, continuing to focus on tier 1.

Jon Resnick: We wanna make sure we're putting that foot forward. Second area that we're focused in on is expanding partnerships. You know, we mentioned the Altasciences relationship. That really I hope signals and reflects a different approach to partnering and a different approach to going to market in different ways. Our offerings are incredibly strong in terms of being complementary to what a number of players have out in market. There are a number of at-scale players, whether they're venture capital players or whether they're CROs that we are, you know, very good potential partners for. A renewed focus on partnership and how we can drive through. We've leaned in much heavier on a targeting approach, you know, continuing to focus on Tier 1.

Overall, what we're looking to is is just more consistency across across across the teams and we're focused in a in a few areas, you know, 1. How can we make sure we're optimizing experts to expert engagement, uh, across the business? You know, a lot of these uh a lot of this engage, a lot of the engagement that happens here is scientists the scientists we want to make sure we're putting that that put forward.

Speaker #2: Very well. We've layered in a number of kind of AI initiatives to help drum up more opportunities and to drive more growth across the business.

Speaker #2: So look, we're doing a number of things. I don't necessarily change always create some churn as you'd expect and we got reg business in and reg business out.

Speaker #2: Those things do have an impact, but our goal here is to set up a business that's going to be growing in line with your expectations and our shareholders' expectations over time.

Second area that we're focused in on is expanding Partnerships. You know, we we mentioned the all the science is relationship that that really, I hope signals and reflects the different approach to uh partnering in a different approach to to going to Market in different ways. Our offerings are incredibly strong in terms of uh, being complimentary to what a number of players have out in Market. So there are a number of at scale players whether they're Venture Capital players or whether they're uh, crows that we are, you know, very good potential partners for so A Renewed focus on, uh, partnership and how we can drive through,

Speaker #2: And that's going to be taking some short-term tougher decisions that are going to lead to that longer-term growth.

William Feehery: There's a number of clients in the tier 2 space that we're working on building out new relationships and extending where the overall integrated tech service proposition fits very well. We've layered in a number of kind of AI initiatives to help drum up more opportunities and to drive more growth across the business. Look, we're doing a number of things. I don't, you know, necessarily, you know, change always creates some, you know, churn as you'd expect, and you got reg business in and reg business out. Those things do have an impact, but, you know, our goal here is to set up, you know, a business that's gonna be growing in line with your expectations and, you know, our shareholders' expectations over time.

Jon Resnick: There's a number of clients in the tier 2 space that we're working on building out new relationships and extending where the overall integrated tech service proposition fits very well. We've layered in a number of kind of AI initiatives to help drum up more opportunities and to drive more growth across the business. Look, we're doing a number of things. I don't, you know, necessarily, you know, change always creates some, you know, churn as you'd expect, and you got reg business in and reg business out. Those things do have an impact, but, you know, our goal here is to set up, you know, a business that's gonna be growing in line with your expectations and, you know, our shareholders' expectations over time.

Speaker #1: Got it. Appreciate that. My follow-up is around biologics in particular. I think there's been some effort over multiple years to refine or augment some of the software platforms, maybe in particular SimCip to be amenable to or to better address the large molecule market.

Um we've uh leaned in a much heavier on a a targeting approach uh you know, continuing to focus on tier 1. There's a number of clients in the tier 2 space that we're working on building out new relationships and extending where the overall integrated tech service proposition fits very well. We've layered in, uh, a number of kind of AI initiatives to help drum up more opportunities and, uh, to to drive, to drive more more growth in the business,

Speaker #1: I wondered if you could comment on the progress there and what specific client traction the software in general, but again, thinking primarily SimCip might be getting on the biologic side.

Speaker #1: Thanks.

Speaker #2: Yeah. It's a great question. I don't have the data points in front of me and I can provide them at a subsequent discussion. There's obviously been a lot of focus on that point internally as I've gotten ramped up.

William Feehery: You know, that's going to be taking some short-term, tougher decisions that are going to lead to that longer-term growth.

Jon Resnick: You know, that's going to be taking some short-term, tougher decisions that are going to lead to that longer-term growth.

David Windley: Got it. Appreciate that. My follow-up is around biologics in particular. I think there's been some effort over multiple years to refine or augment some of the software platforms, maybe in particular Simcyp to be amenable to or to better address the large molecule market. I wondered if you could comment on the progress there and what specific client traction the software in general, but again, thinking primarily Simcyp might be getting on the biologic side. Thanks.

So look we're doing a number of things. I don't you know necessarily you know, change Always creates some, you know, churn as you'd expect and you got red business in and read business out. Uh those things. Do you have uh an impact. But you know our goal here is to set up uh you know business that's going to be growing in line with your expectations and you know, our shareholders expectations over time and you know that's going to be taking some short-term uh tougher decisions that are going to lead to that longer term growth.

Speaker #2: We are we do see not only in SimCip but QSP, which is kind of the extension beyond that, which brings in more of the biological components.

Got it. Appreciate that. Um, my follow-up is around, uh, biologics in particular. I think, uh, there's been some effort over multiple years to

Speaker #2: We do see a growing percentage of our business on outside of the oral components, which you get into peptides and a whole range of other things.

Speaker #2: There is a range of other things. There's a ton of need for both of these. I was actually asking over the weekend, David, for a quantification of percentage of each of them.

Uh, refine, or or or augment? Um, some of the software platforms, maybe in particular, since it to be um, amendable to or to to better address the the large molecule Market. I wondered if you could comment on the progress there and what what specific client traction

Speaker #2: I don't have it to hand right now, but we're looking. There is strong growth as you look at the net new offerings that we're building.

William Feehery: Yeah, it's a great question. I don't have the data points in front of me, and I can provide them at a subsequent discussion. You know, there's obviously been a lot of focus on that point internally as I've gotten ramped up. We, you know, we are. We do see not only in Simcyp, but QSP, which is kind of the extension beyond that which brings in more of the biological components. We do see, you know, a growing percentage of our business, you know, on, you know, outside of the oral components which you get into peptides and a whole range of other things. There's a range of other things. There's a ton of need for both of these.

Jon Resnick: Yeah, it's a great question. I don't have the data points in front of me, and I can provide them at a subsequent discussion. You know, there's obviously been a lot of focus on that point internally as I've gotten ramped up. We, you know, we are. We do see not only in Simcyp, but QSP, which is kind of the extension beyond that which brings in more of the biological components. We do see, you know, a growing percentage of our business, you know, on, you know, outside of the oral components which you get into peptides and a whole range of other things. There's a range of other things. There's a ton of need for both of these.

Um, the software in general. But again thinking primarily Sims might be getting on the biologic side. Thanks.

Speaker #2: They are equally as relevant to the chemical and to the large molecule side. So I can provide follow-up and we speak next with a little bit more color on it.

Speaker #2: But we are focused on extending the applications into that large molecule space.

Speaker #1: Got it. Appreciate that. Thank you.

Yeah, it's a great question. Uh, the I don't have the they don't have the data points in front of me and I can provide them at a, at a subsequent depression. I, you know, there's obviously been a lot of focus on that point internally as I've got gotten ramped up. Uh, we, you know, we are, um, we do see, not only in Simpson, but qst which is kind of the, the, the extension beyond that which brings in more the biological people,

Speaker #3: One moment for our next question. Our next question comes from Michael Cherney with Leering Partners. Your line is open.

Speaker #4: Good morning. Thanks for taking the question. Maybe if I can just circle back on the strategic AI expansion that you noted earlier. John, either John, as you think about the investments you're making, the reorg you're doing internally, how are you balancing the need to ensure appropriate returns versus the spend levels?

William Feehery: I don't, I was actually asking over the weekend, Dave, for a quantification, a percentage of each of them. I don't have it to hand right now, but we're looking. There is strong growth. As you look at the net new offerings that we're building, they are, you know, equally as relevant to the, you know, to the chemical and to the, you know, large molecule side. I can, I can provide follow-up when we speak next with a little bit more color on it. We are focused on extending the applications into that large molecule space.

Jon Resnick: I don't, I was actually asking over the weekend, Dave, for a quantification, a percentage of each of them. I don't have it to hand right now, but we're looking. There is strong growth. As you look at the net new offerings that we're building, they are, you know, equally as relevant to the, you know, to the chemical and to the, you know, large molecule side. I can, I can provide follow-up when we speak next with a little bit more color on it. We are focused on extending the applications into that large molecule space.

Once we do see, uh, you know, a growing percentage of our business, uh, you know, on, uh, on, you know, outside of the, the oral components, which you get into peptides, and a whole range of other things, there is a range of other things. There's a ton of meat for for both of these.

Speaker #4: We hear so many stories about AI spending at Finnium. What is the risk, the up-down dynamics that you're pursuing to make sure that the investments you're making are the right ones?

Speaker #5: Yeah. Yeah. Yeah. Good question. Mike, we what we've undertaken this year, you've seen R&D spend in the quarter continue to increase and we've said that we're deliberately making investments.

David Windley: Got it. Appreciate that. Thank you.

Each of them. Like, I don't have it to hand right now, but we're looking, there is strong growth as you look at the net. New offering that we're building, uh, they are, uh, you know, equally as relevant to the, you know, to the chemical and to the, you know, large molecule side. So I can I can provide follow-up from the, uh, when we speak next a little bit more, more color on it, but, uh, we are focused on extending the applications into that large molecular space.

Operator: One moment for our next question. Our next question comes from Michael Cherny with Leerink Partners. Your line is open.

But appreciate that. Thank you.

1 moment for our next question.

Michael Cherny: Good morning. Thanks for taking the question. Maybe if I can just circle back on the strategic AI expansion that you noted earlier. John, as you think about the investments you're making, the reorg you're doing internally, how are you balancing the need to ensure appropriate returns versus the spend levels? We hear so many stories about AI spending ad infinitum. What is the risk, the up-down dynamics that you're pursuing to make sure that the investments you're making are the right ones?

Our next question comes from Michael churny with Ling Partners. Your line is open.

Speaker #5: What with John's onboarding, one approach that we've changed to ensure that we're getting the return on that capital invested is starting to look at we call it a portfolio view or looking at business cases around what we're investing in and when the revenue is going to come on that.

Uh, good morning. Thanks for taking the question. Maybe if I can just circle back on the—

Strategic AI expansion that you noted earlier. John either John, as you think about the Investments, you're making the reorg, you're doing internally, how are you balancing the need to ensure appropriate Returns versus the spend levels. We hear so many stories about

Speaker #5: So John talked about some changes to the organization. John talked about some of the platform investments that we're making. And what I'd tell you is that we're taking a disciplined approach toward the investments that we're making this year in R&D.

John Gallagher: Yeah. Yeah, good question, Mike. Well, what we've undertaken this year, you've seen R&D spend in the quarter continue to increase and, you know, we've said that we're deliberately making investments. What with John's onboarding, one approach that we've changed to ensure that we're getting the return on that capital invested is starting to look at, we call it a portfolio view or looking at business cases around what we're investing in and when the revenue is gonna come on that. You know, John talked about some changes to the organization. John talked about some of the platform investments that we're making.

AI spending at Finium. What is the risk? The up, down dynamics that you're pursuing to make sure that the investments you're making are the right ones.

yeah, um yeah, yeah, yeah, good question, Mike we we um

Speaker #5: And looking at when the return is going to come, i.e., when is the revenue going to start to show up for that, which as you understand, many of the investments that we'd be making in 2026 will start to show up in 2027.

Speaker #2: And I'd add just a little bit to I mean, the good news about this portfolio is that it's built on what I've described as kind of clinical and scientific intelligence already.

Speaker #2: If you think about the fundamental business, 10,000 projects, thousands of published articles, the regulatory know-how, the entrenched workflow, 160,000 users. I mean, there's a lot of I think we cited 36 trillion data points in Pinnacle and the SimCip record.

John Gallagher: What I'd tell you is that, you know, we're taking a disciplined approach toward the investments that we're making this year in R&D and looking at when the return is going to come, i.e., when is the revenue gonna start to show up for that, which, as you understand, many of the investments that we'd be making in 2026 will start to show up in 2027.

Speaker #2: There's a lot of know-how and unique data and unique applications that exist within our four walls. So the investment itself doesn't have to be in building up that capability and the ability to create the infrastructure.

What what we've undertaken this year, you've seen R&D, spend in the quarter continue to, uh, increase. And you know, we we've said that we're deliberately making Investments what? Um, with with John's on boarding 1 approach that, uh, that that we've changed to ensure that we're getting the return on that Capital invested is starting to look at. We, we call it a portfolio view or, uh, looking at business cases around what we're investing in and when the revenue is going to come on that. So, you know, John talked about, uh, some changes to the organization, John talked about uh, some of the, the platform uh, Investments that we're making. And but I tell you, is that, you know, we're taking a disciplined approach toward the, the Investments that we're making, uh, this year in R&D and looking at when the return is going to come, IE, when is the revenue going to start to?

Speaker #2: The investment is on top of it in terms of turning that unique capability and that unique insight we have into something that's going to be broadly available on a more systematic basis to work within a client's ecosystem.

William Feehery: I'd add just a little bit to that. I mean, the good news about, you know, about this portfolio is that it, you know, it's built on what I've described as kind of clinical and scientific intelligence already. You know, if you think about the fundamental business, 10,000 projects, thousands of published articles, you know, the regulatory know-how, the entrenched workflow, 160,000 users. I mean, there's a lot of I think we said it's 36 trillion data points in Pinnacle and Simcyp record. There's a lot of know-how and unique data and unique applications that exist within our four walls. The investment itself doesn't have to be in building up that capability and building, create the infrastructure.

Jon Resnick: I'd add just a little bit to that. I mean, the good news about, you know, about this portfolio is that it, you know, it's built on what I've described as kind of clinical and scientific intelligence already. You know, if you think about the fundamental business, 10,000 projects, thousands of published articles, you know, the regulatory know-how, the entrenched workflow, 160,000 users. I mean, there's a lot of I think we said it's 36 trillion data points in Pinnacle and Simcyp record. There's a lot of know-how and unique data and unique applications that exist within our four walls. The investment itself doesn't have to be in building up that capability and building, create the infrastructure.

Show up for that, which as you understand many of the Investments that, that were we'd be making in 2026, we'll start to show up in 2027.

Speaker #2: So that's one. Two, I'd also say that I think we'd signal that I think we understand where our fit will be in here relative to some of the other model providers and other workflow and and agent providers in market.

And I'd add just a little bit to the good news about, you know, about this portfolio is that it's, you know, it's built on what I described as kind of clinical and scientific intelligence already. You know, if you think about the fundamental business—10,000 projects, thousands of published articles, you know, the regulatory know-how.

Speaker #2: And so we're very comfortable with our perspective in terms of being able to partner within this ecosystem. So NVIDIA is one good example of kind of where we're going with some of this.

Speaker #2: We also have a number of other discussions going on around how can we be as effective as possible and as targeted as possible and do some of this in a stepwise fashion so that we can get the return that we're expecting.

William Feehery: The investment is on top of it in terms of turning, you know, that unique capability and that unique insight we have into something that's gonna be broadly, you know, available on a more systematic basis to, you know, work within a client's ecosystem. That's one. Two, I'd also say that I think we'd signal that I think we understand where our fit will be in here relative to some of the other model providers and other, you know, work on agent providers in market. You know, we're very comfortable with our perspective in terms of being able to partner within this ecosystem. NVIDIA is one good example of kind of where we're going with some of this.

Jon Resnick: The investment is on top of it in terms of turning, you know, that unique capability and that unique insight we have into something that's gonna be broadly, you know, available on a more systematic basis to, you know, work within a client's ecosystem. That's one. Two, I'd also say that I think we'd signal that I think we understand where our fit will be in here relative to some of the other model providers and other, you know, work on agent providers in market. You know, we're very comfortable with our perspective in terms of being able to partner within this ecosystem. NVIDIA is one good example of kind of where we're going with some of this.

Speaker #4: And just one quick additional question. I apologize if I missed this. With the divestiture now completed, what's the plans for use of capital raised?

The entrenched workflow 160,000 users. I mean, there's a lot of, like we said, a 36 trillion data points and Pinnacle it seems that, uh, record. There's a lot of know-how and unique data and unique applications, that that exists, uh, within, within our 4 Walls. So, the investment itself doesn't have to be in building up that capability and the ability to create create the infrastructure. The investment, uh, is on top of it in terms of turning, you know, that, uh, unique capability and that you can Insight, we have into something that's going to be broadly. Uh, you know, available, uh, on a, a more systematic basis to, you know, work within a client's ecosystem.

Speaker #5: Yeah. So on capital allocation, I mentioned in the prepared remarks we bought $40 million of shares against our authorization in Q1. So share buyback continues to be a focus and a capital allocation vector for us.

Speaker #5: What I'd also say, though, is we've got a good track record of tucking in in M&A and looking at the pipeline there is also something that we're evaluating.

William Feehery: We also have a number of other discussions going on around how can we be as effective as possible and as targeted as possible, and do some of this in a stepwise fashion so that we can get the return that we're expecting.

Jon Resnick: We also have a number of other discussions going on around how can we be as effective as possible and as targeted as possible, and do some of this in a stepwise fashion so that we can get the return that we're expecting.

Speaker #5: So we didn't specifically highlight, Mike, that we would do one or the other. But both of those are now areas where we've been deploying capital successfully over the course of the last year.

Michael Cherny: Just one quick additional question. I apologize if I missed this. With the divestiture now completed, what's the plan for use of capital raised?

So, that's one, two. I'd also say that. I think we'd signal that. Uh, I think we understand where our fit will be in here relative to some of the other model providers and, uh, and other, you know, work on agent providers and markets. And so, you know, we're very comfortable with our perspective in terms of being able to partner with them as ecosystems. So, in the video is one good example of, uh, of kind of where we're going with some of this. We also have a number of other discussions going on around how can we be as effective as possible and as targeted as possible, uh, and do some of this in a stepwise fashion so that we can get the return, uh, that we're expecting.

Speaker #4: Got it. Thanks, John.

Speaker #5: Yep.

Speaker #3: One moment for our next question. Our next question comes from Jeff Garrow with Stevens. Your line is open.

John Gallagher: Yeah. On capital allocation, I mentioned in the prepared remarks, we bought $40 million of shares against our authorization in Q1. Share buyback continues to be a focus and a capital allocation vector for us. What I'd also say, though, is, you know, we've got a good track record of tuck-in M&A, and looking at the pipeline there is also, you know, something that we're evaluating. We didn't specifically highlight, Mike, that we would do one or the other. But, you know, both of those are now areas where we've been deploying capital successfully over the course of the last year.

And just one quick additional question. I apologize if I missed this—with the divestiture now completed, what's the plan for use of capital raised?

Speaker #6: Yeah. Good morning. Thanks for taking the questions. Wanted to ask about the new MID3 and ACE categories. And just to start, if you could spell out in a little more detail the products that fit in each area and what we should expect in terms of metrics or commentary on those categories going forward.

Speaker #2: Sure. Absolutely. So MID3 is going to be our core model-informed drug development and discovery applications that will house not only the technology assets, things like SimCip and Certara IQ, but also the full range of expert-based service capabilities that we have at USS, QSP, PBPK.

Michael Cherny: Got it. Thanks, John.

Both of those are now areas where we've been deploying capital successfully over the course of the last year.

John Gallagher: Yep.

Operator: One moment for our next question. Our next question comes from Jeff Garro with Stephens. Your line is open.

Got it. Thanks John. Yep.

One moment for our next question.

Speaker #2: So it'll be kind of a one-touch up there, accountable and responsible for building up the regulatory footprint and scientific footprint and on offering development on that side.

Jeff Garro: Yeah, good morning. Thanks for taking the questions. Wanted to ask about the new MID3 and ACE categories. Just to start, if you could spell out in a little more detail the products that fit in each area and what we should expect in terms of metrics or commentary on those categories going forward?

Our next question comes from Jeff. Go with Stevens. Your line is open.

Speaker #2: A good mix between that flywheel effect between technology and expert-based services. The other side, ACE, ACE is going to be focused on solving a lot of the data problems that exist.

William Feehery: Sure. Absolutely. MID3 is going to be our core model-informed drug development and discovery applications that will house not only the technology assets, things like Simcyp and Certara IQ, but also the full range of expert-based service capabilities that we have with QSTS, QSP, PBPK. It will be kind of a one-touch app. They are, you know, accountable and responsible for building up the regulatory footprint and scientific footprint and, you know, on offering development on that side, a good mix between that flywheel effect between technology and, you know, expert-based services. The other side, ACE. ACE is going to be focused on solving a lot of the data problems that exist within, you know, this is probably underlined best by some of the recent FDA trial acceleration commentary.

Yeah, good morning. Thanks for taking the questions. Wanda asked about the new M3 and Ace categories. And I just—at the start, if you could spell out in a little more detail the products that fit in each area and what we should expect in terms of metrics or commentary on those categories going forward.

Jon Resnick: Sure. Absolutely. MID3 is going to be our core model-informed drug development and discovery applications that will house not only the technology assets, things like Simcyp and Certara IQ, but also the full range of expert-based service capabilities that we have with QSTS, QSP, PBPK. It will be kind of a one-touch app. They are, you know, accountable and responsible for building up the regulatory footprint and scientific footprint and, you know, on offering development on that side, a good mix between that flywheel effect between technology and, you know, expert-based services. The other side, ACE. ACE is going to be focused on solving a lot of the data problems that exist within, you know, this is probably underlined best by some of the recent FDA trial acceleration commentary.

Speaker #2: Within which is probably underlying BEST, but some of the recent FDA trial acceleration commentary. That will include things like Phoenix and Pinnacle and co-author and global submit and some other things that we have within our four walls, which are really focused in on kind of solving the data and workflow problems and helping to accelerate the rate and pace at which data can be turned into evidence for submission.

Speaker #3: Excellent. I appreciate that. And the follow-up on that topic, curious about how the go-to-market evolves with these categories. Any way you can frame of kind of how big of a change is this going to be for your go-to-market teams?

Speaker #3: And then how should we think about the timeline of making those operational changes and finally any expectation you would set on expected impact from these go-to-market changes?

Uh, sure, absolutely. So um M3 uh, is going to be our core model, informed drug development and Discovery applications that'll house. Uh not only the technology assets things like Sip and Sara IQ. Uh, but also the full range of, uh, of expert based service capabilities that we have with us qsp pbpk. So it'll be kind of a 1, touch up there. You know, accountable and responsible for building up the regulatory footprint and the scientific, uh, footprint. And uh, you know, on offering development on that side. Uh, a good mix between that flywheel effect between technology and uh, you know, expert based expert Based Services. Uh the other side is uh Ace is going to be focused on solving a lot of the

William Feehery: That will include things like Phoenix and Pinnacle and CoAuthor and GlobalSubmit and some other things that we have within our four walls, which are really focused in on solving the data and workflow problems and helping to accelerate the rate and pace at which data can be turned into evidence for submission.

Jon Resnick: That will include things like Phoenix and Pinnacle and CoAuthor and GlobalSubmit and some other things that we have within our four walls, which are really focused in on solving the data and workflow problems and helping to accelerate the rate and pace at which data can be turned into evidence for submission.

Speaker #3: Thanks.

Speaker #2: So I mentioned a couple of times. I think the predominant focus here from the management team is how are we going to build this business to get to that double-digit growth that everyone externally is expecting and that we believe is 100% possible.

Speaker #2: So as you've kind of making evolve these changes, you may have a little bit of churn in the near term, but these are being set up for long-term opportunity maximization and long-term growth.

Get a problem. If that exists, uh, within, uh, within, uh, you know, which is probably underlined best, but some of the recent, uh, FTA trial acceleration commentary that will include things like Phoenix and Pinnacle and co-author and Global submit. Some other things that we have within within our 4 Walls, which are really focused in on, kind of solving the data on workflow problems, uh, and helping to help accelerate the rate and Pace at which, uh, you know, data can be turned into into evidence for submissions.

Jeff Garro: Excellent. I appreciate that. To follow up on that topic, curious about how the go-to-market evolves with these categories. You know, any way you can frame up kind of how big of a change is this going to be for your go-to-market teams? How should we think about the timeline of making those operational changes? Finally, any expectation you would set on expected impact from these go-to-market changes? Thanks.

Speaker #2: What the changes that we're making that we've announced today and that we're moving forward are really what I would characterize as more alignment-based changes than kind of fundamental restructuring of our commercial organization.

Speaker #2: We've taken our we had historically had a Senate or the last couple of years there's been a centralized sales organization that operated independently from the businesses.

William Feehery: I've mentioned a couple times, I, you know, I think the predominant focus here from the management team is how are we gonna build this business to get to that, you know, double-digit growth that everyone externally is expecting that we believe is, you know, 100% possible. You know, as you kind of make and evolve these changes, you may have a little bit of churn in the near term, but these are being set up for, you know, long-term opportunity maximization and long-term growth. The changes that we're making that we've announced today and that we're moving forward are really what I would characterize as more alignment-based changes than kind of fundamental restructuring of our commercial organization.

Excellent. I appreciate that. And and the follow up on, on that topic. It curious about how the the go to market evolves with these categories. You know, any way you can frame of mind but how big of a change is is this going to be for your, your go-to Market teams and then how should we think about the the timeline of of making those operational changes? And and finally, any expectation you would set on expected impact from these go to market changes, thanks.

Jon Resnick: I've mentioned a couple times, I, you know, I think the predominant focus here from the management team is how are we gonna build this business to get to that, you know, double-digit growth that everyone externally is expecting that we believe is, you know, 100% possible. You know, as you kind of make and evolve these changes, you may have a little bit of churn in the near term, but these are being set up for, you know, long-term opportunity maximization and long-term growth. The changes that we're making that we've announced today and that we're moving forward are really what I would characterize as more alignment-based changes than kind of fundamental restructuring of our commercial organization.

Speaker #2: One of the changes that we've made is basically to align the portfolio teams that are selling the products within MID3 or ACE with the actual businesses.

Speaker #2: This will shorten feedback loops from clients. It'll create more accountability within the business. It'll help us with the product innovation and ensure that we have focused hubs for sales and product execution.

So I mentioned a couple of times I, you know, I think the predominant focus is here from the management team is how are we going to build this business to get to that? You know, double digit growth that everyone. Uh, externally is expecting that we believe is, uh, you know, 100% possible. So uh, you know, as you kind of make an evolved these changes if you may have a little bit of uh churn uh in the near term but these are being set up for, you know, long term, you know, long term opportunity.

Maximization and long-term long-term growth.

Speaker #2: So look, I don't think we're we've quantified near-term versus long-term churn attached to this, but again, our expectation is that this will set up this business to have the type of growth that you want over the midterm.

William Feehery: We've taken, you know, we historically had a centralized sales organization that operated independently from the businesses. One of the changes that we've made is basically to align the portfolio teams that are selling the products within MID3 or ACE with the actual businesses. This will shorten, you know, feedback loops from clients. It'll, you know, create more accountability within the business. It'll help, you know, help us with the product innovation and ensure that, you know, we have focused hubs for sales and product execution. Look, I don't, you know, I don't think we're, we've quantified near-term versus long-term churn attached to this.

Jon Resnick: We've taken, you know, we historically had a centralized sales organization that operated independently from the businesses. One of the changes that we've made is basically to align the portfolio teams that are selling the products within MID3 or ACE with the actual businesses. This will shorten, you know, feedback loops from clients. It'll, you know, create more accountability within the business. It'll help, you know, help us with the product innovation and ensure that, you know, we have focused hubs for sales and product execution. Look, I don't, you know, I don't think we're, we've quantified near-term versus long-term churn attached to this.

Speaker #2: And that's the goal of these changes, and it's the goal of the strategic moves that we're making.

Speaker #3: Great. Thanks for taking the questions.

Speaker #4: One moment for our next question. Our next question comes from Craig Hattenbach with Morgan Stanley. Your line is open.

Speaker #6: Yes. Thank you. Can you touch on just the visibility and the software business, the expectation for a stronger second half, including any differences you see by customer tier over the course of the year?

Speaker #5: Yeah. Hi, Craig. The visibility. So we mentioned the visibility on software for a stronger second half is better this year than what we saw last year.

William Feehery: You know, again, our expectation is that this will set up this business to have, you know, the type of growth that you want over the midterm, and that's the goal of these changes, and it's the goal of the strategic moves that we're making.

Jon Resnick: You know, again, our expectation is that this will set up this business to have, you know, the type of growth that you want over the midterm, and that's the goal of these changes, and it's the goal of the strategic moves that we're making.

Um, what uh, the changes that we're making that we've announced today and that we're moving forward, are really what I would characterize as more alignment based changes and kind of fundamental restructuring of our commercial organization. We've taken uh you know we had a historically, had a had a sentence or the last couple years, there's been a centralized sales organization that operated independently from the businesses. You know, 1 of the changes that we've made is basically to align the portfolio teams that are selling the products within M3 or Ace. Uh, uh with the uh, actual businesses. This will shorten uh, you know, feedback loops from clients, that'll you know, create more accountability within the business. So it'll help, uh, you know, help us with the product Innovation and ensure that, you know, we have focused hubs, uh, for for sales and product, execution. So I look, I don't, I don't, you know, I don't think we're we quantify, uh, near-term versus long-term, share and attached to this. But, you know, again, our expect

Speaker #5: The main reason for that is if you look at the deferred revenue, the deferred revenue balance is higher, meaning the ratable software business that we've sold is in hand, and it's going to start to build as we move through the course of the year.

Expectation is um that this will set up this business to have, you know, the type of growth that you want over the midterm. And that's that's the the goal of these changes and it's the goal of strategic moves that we're making

Jeff Garro: Great. Thanks for taking the questions.

Speaker #5: The other thing I'd point out on certainty for a second-half ramp is it's more of a ramping growth rate than it is in dollars.

Great. Thanks for taking the questions.

Operator: One moment for our next question. Our next question comes from Craig Hettenbach with Morgan Stanley. Your line is open.

1 moment for our next question.

Speaker #5: If you look at the actual dollars, and if you were to look at that at the top end of the range, then it's a pretty modest increase in the amount of revenue dollars, but the comps ease as we get into the second half of the year, and therefore the growth rate itself will be reflected higher.

Craig Hettenbach: Yes, thank you. Can you touch on just the visibility in the software business, you know, the expectation for a stronger H2, including any differences you see by customer tier over the course of the year?

Our next question comes from Craig, hatenback with Morgan Stanley. Your line is open.

Speaker #5: Those are a couple of the key reasons why the first-half, second-half story on software and, of course, the performance in the quarter gave us some confidence as we move through the year.

John Gallagher: Hi, Craig. The visibility. We mentioned the visibility on software for a stronger second half is better this year than what we saw last year. The main reason for that is if you look at the deferred revenue, the deferred revenue balance is higher, meaning the ratable software business that we've sold is in hand, and it's gonna start to build as we, you know, as we move through the course of the year. The other thing I'd point out on Certainty for a second half ramp is it's more of a ramp in growth rate than it is in dollars. If you look at the actual dollars, if you were to look at that at the top end of the range, it's a pretty modest increase in the amount of revenue dollars.

Yes, thank you. Can you touch on just the visibility and the software business? You know, the expectation for a stronger second half, including any differences you see by customer tier over the course of the year.

Speaker #6: And customer tier, you said, was kind of broad-based in Q1. Is that the expectation as you move through the year, or is there anything you would call out by customer tier?

Speaker #5: Yeah. I mean, across the good growth exceeded our plan expectations. Across the customer categories, I'd say that was most pronounced in Tier 2 and Tier 3.

Speaker #5: That outperformance Tier 1 was a strong contributor, for sure. But we've got some tailwind from funding environment at this point, and we think that as we move through the year, that's going to help that's going to help us in the Tier 2 and 3s.

John Gallagher: The comps ease as we get into H2 of the year, and therefore, the growth rate itself will be reflected higher. Those are a couple of the key reasons why the H1/H2 story on software. Of course, you know, the performance in the quarter gave us some confidence as we move through the year.

Speaker #6: Great. And then just my follow-up question on kind of the AI-dedicated team. As you're thinking about allocating capital in the business, are there parts of the organization where you're finding efficiencies in terms of where you're shifting spending?

Craig Hettenbach: Customer tier, you said was kind of broad-based in Q1. Is that the expectation as you move through the year? Is there anything you would call out by customer tier?

Visibility, uh, on software for a stronger. Second half is better this year than what we saw last year. The main reason for that is if you look at the deferred revenue, the deferred revenue balance is higher. Meaning the rateable software business that we've sold is in hand and it's going to start to build as we, you know, as we move through the course of the year. The other thing I'd point out on certainty for, uh, for a second half ramp is it's more of a ramping growth rate than it is in dollars, if you look at the actual dollars. And if you were to look at that at the top end of the range, then it's it's a pretty modest increase in the amount of Revenue dollars, but the comps ease as we get into the second half of the year. And therefore, the growth rate itself will, uh, will be reflected higher. Uh, those are, those are a couple of the key reasons, why the first half second half story on software. And of course, you know, the performance in the quarter gave us, uh, gave us some confidence as as we move through the year.

Speaker #6: Can you give any color around that?

Speaker #5: Yes. Yeah. We are. You probably remember on the prior call, we mentioned cost avoidance. We're still working through that. And our margin guidance that we gave here today would be reflective of improvement as we move through the course of the year.

John Gallagher: Yeah. I mean, across the Good growth, exceeded our plan expectations across the customer categories. I'd say that was most pronounced in tier 2 and tier 3. That outperformance, tier 1 was a strong contributor for sure. You know, we've got some tailwind from funding environment at this point, and we think that as we move through the year, that's gonna help us in the tier 2 and 3s.

And customer tier. You said was kind of broad-based in Q1. Is that the expectation as you move through the year? Is there anything you would call out, like by customer tier?

Speaker #5: So the answer is yes, we are reallocating. We are making trade-off decisions and that's happening on the operating side as well as in R&D investments.

Craig Hettenbach: Great. Then just my follow-up question on kind of the AI dedicated team. Just as you're thinking about allocating capital in the business, are there parts of the organization where you're finding efficiencies in terms of where you're shifting spending? Can you give any color around that?

Yeah, I mean across the good growth uh exceeded our our plan expectations across the customer categories. I'd say that was most pronounced in, uh, tier 2 and tier 3 that outperformance Tier 1 was was a strong contributor for sure. But you know, we we've got some Tailwind from funding environment at this point and uh, we think that as we move through the year, that's going to help that's going to help us in the tier 2 and 3

Speaker #2: And I think unsurprisingly, similar to others, we're seeing massive acceleration improvements as well. Productivity is way up. The amount of code our teams are able to generate, the productivity of what we're doing is dramatically increased.

Speaker #2: So quite pleased with the acceleration of roadmaps and the acceleration of capabilities that comes along.

John Gallagher: Yes. Yeah. We are. You know, you probably remember on the prior call, we mentioned cost avoidance. We're still working through that. You know, our margin guidance that we gave here today would be reflective of, you know, improvement as we move through the course of the year. The answer is yes, we are reallocating. We are making trade-off decisions, and that's happening, you know, on the operating side as well as in R&D investments.

Great. And then just my follow-up question on kind of the AI dedicated team just as you're thinking about allocating capital in in the business, other parts of the organization where you're finding efficiencies in terms of where you're shifting spending, can you give me a call around that?

Speaker #6: Helpful. Thank you.

Speaker #4: One moment for our next question. Our next question comes from Sean Dodge with BMO Capital Markets. Your line is open.

Speaker #2: Yeah. Thanks. Maybe just the partnership you mentioned with Alta Sciences. Is this anything more you can share on how that works with the opportunity?

Speaker #2: Is there anything about the economics of it? And then just is it just software you're providing there? Is there going to be services that are part of the Alta Sciences partnership too?

William Feehery: I think unsurprisingly, similar to others, we're seeing massive acceleration improvements as well. Productivity is way up. The amount of code our teams are able to generate, the productivity of what we're doing is dramatically increased. Quite pleased with the acceleration of roadmaps and the acceleration of capabilities that comes along.

Jon Resnick: I think unsurprisingly, similar to others, we're seeing massive acceleration improvements as well. Productivity is way up. The amount of code our teams are able to generate, the productivity of what we're doing is dramatically increased. Quite pleased with the acceleration of roadmaps and the acceleration of capabilities that comes along.

Yes. Yeah, we we are, you know, you probably remember on the, on the, uh, prior call. We mentioned cost avoidance. We're still working through that. Uh, and, you know, our margin guidance, that that that we gave here today, would be reflective of, you know, Improvement as we move through through the course of the year. So the answer is, yes, we are. We are reallocating, we are making, uh, trade-off decisions and that's happening, you know, on the operating side as well as in R&D Investments,

Speaker #1: Yeah. We're excited about this. So I mentioned before, I think as a company, our portfolio lends itself very well to a range of partnerships.

Speaker #1: We're highly complementary to a number of at-scale market players here, and I think this is something we'll continue to push on. This relationship is brand new, obviously just announced this past week.

Craig Hettenbach: Helpful. Thank you.

And I think unsurprisingly uh similar to the others. We're seeing massive acceleration improvements as well. Productivity is way up the amount of code. Our teams are being are able to generate the productivity of what we're doing is uh, dramatically increase. Uh, so quite pleased with that the acceleration of roadmaps and the acceleration of capabilities that comes along

Operator: One moment for our next question. Our next question comes from Sean Dodge with BMO Capital Markets. Your line is open.

Helpful. Thank you.

One moment for our next question.

Sean Dodge: Yeah, thanks. Maybe just the partnership you mentioned with Altasciences. Is there anything more you can share on how that works with the opportunity? Is there anything about the economics of it? Is it just software you're providing there, or is there gonna be services that are part of the Altasciences partnership too?

Speaker #1: There is genuine alignment between the teams. Around acceleration of trials, opportunities to completely rethink early-stage execution in different ways. Alta Sciences is a unique one of two who has a set of integrated lab, AML, human, CDMO capabilities.

Our next question comes from Sean Dodge with BMO Capital Markets. Your line is open.

William Feehery: Yeah. We're excited about this. I mentioned before, I think as a company, our portfolio lends itself very well to a range of partnerships. We're highly complementary to a number of, you know, at-scale market players here, and I think this is something we'll continue to push on. You know, this relationship is, you know, brand new, obviously just announced this past week. There is genuine alignment between the teams around acceleration of trials, you know, opportunities to completely rethink, you know, early-stage execution in different ways. Altasciences is a unique one of two who has, you know, set of integrated, you know, lab, animal, human CDMO capabilities.

Jon Resnick: Yeah. We're excited about this. I mentioned before, I think as a company, our portfolio lends itself very well to a range of partnerships. We're highly complementary to a number of, you know, at-scale market players here, and I think this is something we'll continue to push on. You know, this relationship is, you know, brand new, obviously just announced this past week. There is genuine alignment between the teams around acceleration of trials, you know, opportunities to completely rethink, you know, early-stage execution in different ways. Altasciences is a unique one of two who has, you know, set of integrated, you know, lab, animal, human CDMO capabilities.

Yeah, thanks. Um maybe just the the partnership you mentioned with all the Sciences is just anything more, you can share on um how that works with the opportunity. Is there anything about the economics of it? And then just is it just software, you're providing there. Is there going to be services that are part of the, the Ulta Sciences partnership too.

Speaker #1: So they have the opportunity to cut from an early stage, really kind of connect a lot of the things that we do on the modeling side by working together.

Speaker #1: We'll also be able to do some disruptive things with data and help close some of the loops on data and accelerate data flows. So we'll be working with them over the next couple of weeks and months in terms of defining not only kind of joint opportunities to engage customers, just very high customer overlap already, which is the starting spot.

Yeah, we're excited. We're excited about this. So I mentioned before, I think there's a company. Uh, our portfolio lends itself, very well to arrange a range of Partnerships. Uh, we're very highly complimentary to a number, a number of, uh, you know, at scale Market players here, and I think this is something, uh, will continue to to push on. Um, you know, this, uh, relationship, uh, is

Speaker #1: But identifying opportunities to better integrate technology and service workflow across the two organizations to the benefit of our clients.

Speaker #4: Okay. Thank you. And then on the software side, and more specifically on the upsells, you referenced in the quarter. Can you give us an example or two around what is an upsell?

William Feehery: They have the opportunity from an early stage to really kind of connect a lot of the things that we do on the modeling side. You know, by working together, we'll also be able to do some disruptive things with data and help close some of the loops on data and accelerate data flows. We'll be working with them over the next 2 weeks and months in terms of defining not only kind of joint opportunities to engage customers. There's very high customer overlap already, which is the starting spot. Identifying opportunities to, you know, better integrate technology and service workflow across the 2 organizations to the benefit of our clients.

Jon Resnick: They have the opportunity from an early stage to really kind of connect a lot of the things that we do on the modeling side. You know, by working together, we'll also be able to do some disruptive things with data and help close some of the loops on data and accelerate data flows. We'll be working with them over the next 2 weeks and months in terms of defining not only kind of joint opportunities to engage customers. There's very high customer overlap already, which is the starting spot. Identifying opportunities to, you know, better integrate technology and service workflow across the 2 organizations to the benefit of our clients.

Speaker #4: What would have been kind of some of the more common ones lately? Have those been pretty consistent across all client tiers, or have you seen kind of more in one or the other?

Uh, you know, brand new obviously just announced this past week. Uh, there is Jen genuine alignment uh, between the teams around acceleration of Trials, you know, opportunities to completely rethink. Uh, you know, early stage execution in different ways. Uh, I'll just scientists is a is a unique 1 of 1 of 2, who has, you know, a set of integrated, you know, Labs animal uh human cdmo capabilities. So they have the opportunity to help them in early stage, really kind of

Speaker #5: Yeah. Effectively, that's reflected in the net retention rate. So we did 106 on the quarter, which was an inflect higher than where we've been over the last few quarters, which was good.

Speaker #5: What does that mean? I mean, in the Tier 1 customer category, those are all already our customers. So an upsell would basically be some kind of expansion.

Speaker #5: We're taking more seats. We're selling more functionality. In the Tier 2 and Tier 3 in particularly in the Tier 3 category, then that's the opportunity to add some new names or some new logos but we also have a huge 2,400 total customers customer base.

Sean Dodge: Okay. Thank you. On the software side and more specifically on the upsells you referenced in the quarter, can you give us an example or two around like what is an upsell? What would've been kinda some of the more common ones lately? Have those been pretty consistent across all client tiers, or have you seen kind of more one or the other?

Connect a lot of the things that we do on the modeling side. Uh, you know, I work in together will also be able to do some disruptive things with data and, and help close some of the loops and data and accelerate data flows. So we'll be working with them over the next couple weeks. Uh, and months in terms of defining, not only kind of joint opportunities to engage customers, just very high customer overlap already, which is the the starting spot, but identifying opportunities to, you know, better integrate, um, you know, technology and service workflow across the the 2 organizations to the benefit of our clients.

Okay.

Speaker #5: So any kind of upsell is that land and expand strategy that you've heard us talk about in the past, which is really working the existing customer base and making sure they're aware of the breadth of product offerings that we have and that would fall into that upsell category.

John Gallagher: Yeah. Effectively, that's reflected in the net retention rate. We did 106 on the quarter, which was an inflect higher than where we've been over the last few quarters, which was, which is good. What does that mean? I mean, in the tier 1 customer category, those are all already our customers. You know, an upsell would basically be some kind of expansion. We're taking more seats, we're selling more functionality. In the tier 2 and tier 3, and particularly in the tier 3 category, you know, that's the opportunity to add some new names or some new logos. We also have a huge 2,400 total customers, customer base.

On the upsells, uh, you referenced in the quarter. Can you give us an example or 2 around? Like what is an upsell, what would have been would have been kind of some of the more common ones lately? Have those been pretty consistent across all? All clients or have you seen kind of more more in 1?

Speaker #1: Yeah. And if you recall, in the last call, we talked a lot about price as particularly pricing discipline as a lever. And we've looked at this on two or three dimensions.

Speaker #1: We've looked at this on an operational lever, which John just referred to, look at our net contract values, look at our existing upgrade paths and potential, which is a tactical plan we have in place.

Speaker #1: And we've got a SWAT team who's looking at that. We've also looked more broadly at a suite of strategic initiatives. One of the pieces of feedback that I've received from some of our enterprise clients is that they're looking to consume more of our software to consume more of our technology in an integrated way and sometimes the pricing structures are inhibiting to doing that.

John Gallagher: Any kind of upsell is that land and expand strategy that you've heard us talk about in the past, which is really working the existing customer base and making sure they're aware of the breadth of product offerings that we have, and that would fall under that upsell category.

William Feehery: Yeah. If you recall, in the last call, we talked a lot about price particularly pricing discipline as a lever. We've looked at this on, you know, 2 or 3 dimensions. We've looked at this on an operational lever, which John just referred to. You know, look at our net contract values, look at our, you know, existing, you know, upgrade paths and potential, which is a tactical plan we have in place, and we've got a SWAT team who's looking at that. We've also looked more broadly at a suite of strategic initiatives.

Jon Resnick: Yeah. If you recall, in the last call, we talked a lot about price particularly pricing discipline as a lever. We've looked at this on, you know, 2 or 3 dimensions. We've looked at this on an operational lever, which John just referred to. You know, look at our net contract values, look at our, you know, existing, you know, upgrade paths and potential, which is a tactical plan we have in place, and we've got a SWAT team who's looking at that. We've also looked more broadly at a suite of strategic initiatives.

Speaker #1: So how can we develop more enterprise-based pricing approaches that will be consistent with our push more into platform engagement is another big initiative that we have as well.

Yeah, we we effectively that's reflected in the net retention rate, so we did 106 on the quarter, which was, uh, an in fact, higher than than, than where we've been over the last few quarters, which was, which is good, uh, what does that mean? I mean, in the Tier 1 customer category, uh, those are all already our customers. So, you know, an upsell would basically be some kind of expansion, we're taking more seats. Uh, we're selling more functionality, uh, in the tier 2 and tier 3 in particularly in the tier 3 category. Then you know that that's the opportunity to add some new names or or some new logos. Uh, but we also have a huge 2400 total customers, uh, customer base. So any kind of upsell is that land and expand strategy that you've heard us talk about in the past, which is, uh, really working the, the existing customer base and making sure that they're aware of the breadth. The product offerings that we have and that would fall into that upsell category.

Speaker #1: We think both of these will be net beneficial to our growth rates over the coming months.

Yeah, if you recall, uh, in the last call, we talked a lot about price, particularly pricing discipline as a lever, uh, and we've looked at this on, you know, two or three dimensions. We've looked at this—

Speaker #4: Okay. Great. Thanks again. One moment for our next question. Our next question comes from Matt Hewitt with Craig Hellem Capital Group.

William Feehery: One of the pieces of feedback that I've received from some of our enterprise clients is that they're looking to consume more of our software to consume more of our technology in an integrated way, and sometimes the pricing structures, are inhibiting to doing that. How can we develop more enterprise-based pricing approaches that will be consistent with our push more into platform engagement is another big initiative that we have as well. We think both of these, will, be, will be net beneficial to our growth rates over the, over the coming months.

Jon Resnick: One of the pieces of feedback that I've received from some of our enterprise clients is that they're looking to consume more of our software to consume more of our technology in an integrated way, and sometimes the pricing structures, are inhibiting to doing that. How can we develop more enterprise-based pricing approaches that will be consistent with our push more into platform engagement is another big initiative that we have as well. We think both of these, will, be, will be net beneficial to our growth rates over the, over the coming months.

Speaker #7: Good morning. Thanks for taking the questions. Just one for me. So John, you spoke about your partnerships, and there's been consortiums announced over the past few quarters.

Speaker #7: And you've got these relationships with NVIDIA and the new one with Alta Sciences. I'm curious, as you look at the news flow regarding these partnerships, whether it's yours or others in the market, is the ultimate goal here to drive either adoption of simulation and modeling to accelerate that, which obviously would benefit you?

Speaker #7: Is it to create a wider moat allowing you to not only retain but maybe grow that business even further? I mean, what is the ultimate goal, and when do you expect to see some benefits from these types of partnerships?

Sean Dodge: Okay, great. Thanks again.

Uh, on an operational level, which John just referred to, you know, look at our net contract values. Look at our, you know, existing, uh, you know, upgrade paths and potential, uh, which is a tactical plan. We have, we have in place, we've got a SWAT team. Who's looking at that? We've also looked more broadly into this. We just strategic initiative 1 of the pieces of feedback that I've received from. Uh, from some of our Enterprise clients is that they're looking to consume more of our software with to consume more of our technology in an integrated way and sometimes the the pricing structures or or inhibiting to doing that. So how can we develop more Enterprise based pricing approaches? That will be consistent with our push more into platform. Engagement is another big initiative that we have as well. We think both of these, uh, will, uh, be will be net, beneficial to our growth rates, over the, over the coming months.

Operator: One moment for our next question. Our next question comes from Matt Hewitt with Craig-Hallum Capital Group.

Okay, great. Uh, thank you again.

One moment for our next question.

Speaker #7: Thanks.

Speaker #1: Good question. And maybe I can say yes and yes. You're I mean, I think those are both true. Look, we know success in this market is not one-offs.

Matt Hewitt: Good morning. Thanks for taking the questions. Just one from me. John, you spoke about your partnerships, and there's been consortiums announced over the, you know, past few quarters. You've got these relationships with NVIDIA and the new one with Altasciences. I'm curious, as you look at the news flow regarding these partnerships, whether it's yours or others in the market, is the ultimate goal here to drive either adoption of simulation and modeling to accelerate that, which obviously would benefit you? Is it to create a wider moat, allowing you to not only retain but maybe grow that business even further? What is the ultimate goal, and when do you expect to see some benefits from these types of partnerships? Thanks.

Our next question comes from Matt Huitt with Craig-Hallum Capital Group.

Speaker #1: We live in ecosystem. There are a range of capabilities that's going to take to be successful. And to grow at the rate and pace at which we believe we can.

Speaker #1: And so we're being focused in terms of what we think we're very, very good at, and we're doubling down and tripling down in what we're very good at.

Speaker #1: And we'll look for partnerships to fill in some of those gaps. Partnerships with technology with technology suppliers and with modeling those things are complete accelerants to what we do.

William Feehery: Good question, and maybe I can say yes and yes. I mean, I think those are both, you know, true. Look, we know success in this market is not, you know, one-offs. We live in a very connected ecosystem. There are a range of capabilities it's gonna take to be successful, and to, you know, grow at the rate and pace at which we believe we can. You know, we're being focused in terms of what we think we're very, very good at, and we're doubling down and tripling down in what we're very good at. We'll look for, you know, for partnerships to fill in some of those gaps.

Jon Resnick: Good question, and maybe I can say yes and yes. I mean, I think those are both, you know, true. Look, we know success in this market is not, you know, one-offs. We live in a very connected ecosystem. There are a range of capabilities it's gonna take to be successful, and to, you know, grow at the rate and pace at which we believe we can. You know, we're being focused in terms of what we think we're very, very good at, and we're doubling down and tripling down in what we're very good at. We'll look for, you know, for partnerships to fill in some of those gaps.

Good morning. Thanks for taking the questions. Um, just one for me. So John, you spoke, uh, about your partnerships and there's been consortiums announced over the, you know, past few quarters. And you've got these relationships with Nvidia and the new one with Alta Sciences. I'm curious, as you look at the news flow regarding these partnerships, whether it's yours or others in the market, is the ultimate goal here to drive either adoption of simulation and modeling to accelerate that—which obviously would benefit you—is that to create a wider moat, um, allowing you to not only retain but maybe grow that business even further? I mean, what is the ultimate goal? And when do you expect to see some benefits from these types of partnerships? Thanks.

Speaker #1: Commercial partnerships with at-scale players like early-stage CROs or, in fact, perhaps others as you go along who at scale have large books of business as well and are working within the core kind of clinical side, which we don't have capabilities.

Uh good question. And maybe I can say yes and yes you're uh I mean I think those are both um both uh

Speaker #1: We're not a CRO per se. Another huge if we can integrate that on behalf of our clients, it's win-win. Win, win, win. It's win for us.

Speaker #1: It's win for an Alta Sciences-type partner, and it's a win for clients who will be working with because we can accelerate timelines and drive costs down for them and help disrupt conventional flows.

William Feehery: You know, partnerships with technology, you know, with, you know, technology suppliers and with, you know, modeling comp-- you know, those things are complete accelerants to what we do. Commercial partnerships with at-scale players like, you know, like early-stage CROs or, you know, in fact, perhaps others as you go along, who at scale have large books of business as well and are working with, you know, in the core kind of clinical side, which we don't have capabilities. We're not, you know, not a CRO per se. You know, if we can integrate that on behalf of our clients, it's win-win. It's, you know, win-win-win.

Jon Resnick: You know, partnerships with technology, you know, with, you know, technology suppliers and with, you know, modeling comp-- you know, those things are complete accelerants to what we do. Commercial partnerships with at-scale players like, you know, like early-stage CROs or, you know, in fact, perhaps others as you go along, who at scale have large books of business as well and are working with, you know, in the core kind of clinical side, which we don't have capabilities. We're not, you know, not a CRO per se. You know, if we can integrate that on behalf of our clients, it's win-win. It's, you know, win-win-win.

Um, you know, look sure. Look this we know success in this market is not uh you know, 1 off. We are we live in a very connected, uh ecosystem. Uh, there are a range of capabilities. It's going to take to be successful uh, and and to, you know, to grow out the written case of which we believe we can. And so, you know, we are being focused in terms of what we think. We're very, very good at uh and we're doubling down and tripling down and and what we're very good at and we'll look for, you know, for Partnerships to

Speaker #1: So look, I think it's a realization that it'll help accelerate the market. It's also a realization that we know what we do very well, and that we're comfortable in partnering with others and what they do well to help create winning scenarios for our clients.

Speaker #4: Got it. All right. Thank you. One moment for our next question. Our next question comes from Max Smock with William Blair. Your line is open.

Speaker #8: Hi, John. John, thanks for taking our questions and squeezing us in here at the end. Maybe just one for us quickly. You talked a lot about just interest and impact of AI on drug development.

William Feehery: It's win for us, it's win for an Altasciences, their partner, and it's a win for the clients who we'll be working with because we can accelerate timelines and drive, you know, drive costs down for them and help disrupt conventional flows. Look, I think it's a realization that it'll help accelerate the market. It's also a realization that, you know, we know what we do very well and that we're comfortable in partnering with others and what they do well to help create win scenarios for our clients.

Jon Resnick: It's win for us, it's win for an Altasciences, their partner, and it's a win for the clients who we'll be working with because we can accelerate timelines and drive, you know, drive costs down for them and help disrupt conventional flows. Look, I think it's a realization that it'll help accelerate the market. It's also a realization that, you know, we know what we do very well and that we're comfortable in partnering with others and what they do well to help create win scenarios for our clients.

Speaker #8: I'm curious to get your thoughts on how much interest is out there on the large pharma side for building out internal solutions? Obviously, it seems like there's been a lot of focus on discovery.

Speaker #8: So do you expect these investments to result in solutions that are going to be competitive with your offerings in that space? And then in clinical, how should we think about the risks that large pharma builds solutions that compete with your MIDD solutions here going forward?

Speaker #8: Thank you.

Matt Hewitt: Got it. All right. Thank you.

For them and and help disrupt conventional flows. So look, I I think it's a realization that uh, that it'll help accelerate the market. It's also realization that that uh, you know, we know what we do very well and that we're comfortable in partnering with others and that they do well to help help, uh, create women, scenarios for our clients,

Speaker #1: And Max, I just want to make sure I understand the second question. Could you just repeat that one more time?

Got it. All right. Thank you.

Operator: One moment for our next question. Our next question comes from Max Smock with William Blair. Your line is open.

Speaker #8: Yeah. Just around large pharma and their willingness and ability to build out solutions that compete with your offerings, whether that's in discovery or the clinical space.

1 moment for our next question.

Max Smock: Hi, John and John. Thanks for taking our questions and squeezing us in here at the end. Maybe just one for us quickly. You talked a lot about just interest and impact of AI on drug development. I'm curious to get your thoughts on how much interest is out there on the large pharma side for building out internal solutions.

Max Smock: Hi, Jon and John. Thanks for taking our questions and squeezing us in here at the end. Maybe just one for us quickly. You talked a lot about just interest and impact of AI on drug development. I'm curious to get your thoughts on how much interest is out there on the large pharma side for building out internal solutions.

Our next question comes from Max mock with William, Blair. Your line is open.

Speaker #1: Yeah. Look, I genuinely think in the near term, where most of the productivity is happening and where most of the big splash press releases are, is on the earlier-stage discovery.

John, thanks for taking our questions and squeezing us in here at the end. Maybe just one for us quickly. We talked a lot about

Speaker #1: And I think because we mentioned we see this as kind of a net positive to the market. More compounds means more demand for MIDD services.

Max Smock: Obviously, it seems like there's been a lot of focus on discovery. Do you expect these investments to result in solutions that are going to be competitive with your offerings in that space? In clinical, how should we think about the risks that large pharma builds solutions that compete with your MIDD solutions here going forward? Thank you.

Speaker #1: And so look, I know there's a lot of a lot of press releases, a lot of uncertainty. Out there around how some of these things go, what we're hearing on the other side of it is phone calls from a lot of these players and providers about how do we tap your capabilities into what we're building and doing.

William Feehery: Max, I just want to make sure I understand the second question. Can you just repeat that one more time?

Jon Resnick: Max, I just want to make sure I understand the second question. Can you just repeat that one more time?

Just interested in the impact of AI on drug development. I'm curious to get your thoughts on how much interest is out there on the large pharma side for building out internal solutions. Obviously, it seems like there's been a lot of focus on discovery. So, do you expect these investments to result in solutions that are going to be competitive with your offerings in that space? And then, in clinical, how should we think about the risks that large pharma builds solutions that compete with your MIBD solutions here going forward? Thank you.

Max Smock: Yeah, just around large pharma and their willingness and ability to build out solutions that compete with your offerings, whether that's in discovery or the clinical space.

I just want to make sure I understand the second question. Just repeat that one more time.

Speaker #1: I started in the opening statements, and I think I reiterated again, told the story about what it took to get SIMCIP approved in the EMA.

William Feehery: Yeah. Look, I genuinely think in the near term, where most of the productivity is happening and where most of the big splash press releases are is on the earlier stage discovery. I think as we've mentioned, we see this as kind of a net positive to the market. More compounds means more demand for MIDD services. Look, I know there's a lot of, you know, a lot of press releases, a lot of uncertainty out there around how some of these things go. What we're hearing on the other side of it is phone calls from a lot of these players and providers about how do we tap your capabilities into what we're building and doing.

Jon Resnick: Yeah. Look, I genuinely think in the near term, where most of the productivity is happening and where most of the big splash press releases are is on the earlier stage discovery. I think as we've mentioned, we see this as kind of a net positive to the market. More compounds means more demand for MIDD services. Look, I know there's a lot of, you know, a lot of press releases, a lot of uncertainty out there around how some of these things go. What we're hearing on the other side of it is phone calls from a lot of these players and providers about how do we tap your capabilities into what we're building and doing.

Yeah, just around uh, large Pharma and their willingness and ability to build out solutions that compete with your offerings, whether that's in Discovery or the clinical space.

Speaker #1: And we've been working with the 25 member companies in two years. And the importance of transparency and the importance of auditability in that we talked about the mechanics around Pinnacle and the 36 trillion data points and the mechanics of it.

Speaker #1: We talk about the legacy of the historical data and all the kind of unique IP that we have. It's pretty tough to replicate. I mean, this is not easy stuff.

Yeah, look I I genuinely think in the near term where most of the productivity is happening and where most of, the Big Splash press releases are, is, is on the earlier stage Discovery. And I think, as we mentioned, we see this as kind of a, net positive to, to the market, uh, more more compounds means more demand for MD services.

Speaker #1: So I would see it as hugely inefficient for others to be building their own capabilities. I think it's incumbent upon us to democratize it to the extent that we can make it broadly available within their four walls.

William Feehery: You know, I started in the opening statements, and I think I you know reiterated again when we told the story about what it took to get Simcyp approved in the EMA and working with the 25 member companies in 2 years and the importance of transparency and the importance of auditability in that. We talked about the mechanics around, you know, Pinnacle 21 and the 36 trillion data points and the mechanics of it. You know, we talk about the legacy of the historical data and all the kind of unique IP that we have. It's pretty tough to replicate. I mean, this is not easy stuff. I would see it as hugely inefficient for others to be building their own capabilities.

Jon Resnick: You know, I started in the opening statements, and I think I you know reiterated again when we told the story about what it took to get Simcyp approved in the EMA and working with the 25 member companies in 2 years and the importance of transparency and the importance of auditability in that. We talked about the mechanics around, you know, Pinnacle 21 and the 36 trillion data points and the mechanics of it. You know, we talk about the legacy of the historical data and all the kind of unique IP that we have. It's pretty tough to replicate. I mean, this is not easy stuff. I would see it as hugely inefficient for others to be building their own capabilities.

Um, and, and so, look, I, I know there's a lot of, uh, you know, a lot of press releases, a lot of, um, a lot of uncertainty out there around how some of these things go. So what we're hearing on the other side of it is phone calls from a lot of these players and providers about how do we tap your capabilities into what we're building and doing?

Speaker #1: And partner with them in different ways so that the companies are getting broad application, the benefit of the capabilities that we bring.

Speaker #8: Got it. Thanks for taking our question.

Speaker #4: Thank you. I'm not showing any further questions at this time. And as such, this does conclude today's presentation. We thank you for your participation.

Um, you know, I I started in the opening statements and I think I re re reiterate or you know, reiterate it again, and we told the story about what it took to get. Tim Set uh approved in in the EMA and working with the 25th around, you know, tentacle on the 36 trillion data points and mechanics of it. You know, talk about the the legacy of the historical data and all the kind of unique ID that that we have it's pretty tough to uh, to to replicate. I mean, this is not easy easy stuff. So,

William Feehery: I think it's incumbent upon us to democratize it to the extent that we can make it broadly available within their four walls and partner with them in different ways so that the companies are getting, you know, broad application, the benefit of the capabilities that we bring.

Jon Resnick: I think it's incumbent upon us to democratize it to the extent that we can make it broadly available within their four walls and partner with them in different ways so that the companies are getting, you know, broad application, the benefit of the capabilities that we bring.

Max Smock: Got it. Thanks for taking our question.

I, I would see it as a hugely inefficient for, for others to be building their own capabilities. I think it's a comment upon us the democratize. It, uh, to the extent that we can make. It broadly available, within their 4 Walls and partner with them in in different ways. So that the companies are getting getting, you know, broad application, the benefit of the capabilities that we bring

Got it. Thanks for taking our question.

Operator: Thank you. I am not showing any further questions at this time, and as such, this does conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.

Thank you. I'm not showing any further questions at this time, and as such, this does conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.