Certara, Inc.

Good day and thank you for standing by. Welcome to the Sertara second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Deichler. Please go ahead.

Good afternoon, everyone. Thank you all for participating in today's conference call. On the call from Sartara, we have William Ferry, Chief Executive Officer and Ann Epidemic, Chief Financial Officer. Earlier today, Sartara released financial results for the quarter ended June 30th, 2022. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list and description of risks and uncertainties associated with Satara's business, please refer to the risk factors section of our Form 10-K filed with Securities and Exchange Commission on March 1, 2022. We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Also in their remarks or responses to questions, management may mention some non-GAAP financial measures. Reconciliations of adjusted EBITDA, adjusted net income, adjusted EPS, and constant currency revenue to the most directly comparable GAAP measures are available in the recent earnings release, which is available on the company's website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today August 9th, 2022. Sitara disclaims any intention or 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. And with that, I will turn the call over to William.

Thank you, David. Good afternoon, everyone. Thank you for joining Sitara's second quarter earnings call. Andrew and I will start with prepared remarks, and then we will take questions. In the second quarter, Sitara delivered significant growth in bookings, and the biosimulation software and services business achieved mid-teens growth in revenue, despite headwinds from foreign exchange rates. Our performance in regulatory services, which comprises less than 25% of our business, did not meet expectations due to ongoing delays and recent regulatory decisions regarding China-only clinical trial data. Our operating cash flow growth, which was not impacted significantly by foreign exchange rates, continues to be strong. We reported second quarter revenue of $82.8 million, growing 18% year over year on a reported basis and 21% on a constant currency basis, including Pinnacle 21. As you know, Sitara operates a global business with employees and customers located in many different countries around the world. This global footprint has many advantages, However, during periods of foreign currency volatility, our reported revenue growth figures may be impacted. As a result, we have decided to disclose our second quarter financial results on both a reported basis and a constant currency basis to help you better understand the underlying trends in the business, which remain healthy. Reported software revenue was $28.7 million, growing 48% year-over-year on a constant currency basis. with a 92% aggregate renewal rate. These results were in line with our expectations and driven by mid-teens growth in our core CIMSIP and Phoenix biosimulation software businesses, as well as the contribution from Pinnacle 21. Demand for biosimulation continues to be strong, with customer interest and new applications growing at a very healthy rate. We are committed to expanding the role of biosimulation to meet the needs of researchers with innovation and expansion of our software offerings. In June, we launched our new SimCip Discovery Simulator, which applies bio-simulation earlier in discovery and development. SimCip Discovery advances lead optimization, first-in-human dose prediction, and early formulation development. We are excited to help identify and progress the most promising new drug candidates for further investigation. In addition, We released new versions of our immunogenicity, immuno-oncology, and vaccine simulators to help predict how drugs work and to address key questions in the development of novel biologic therapies. The latest versions of these simulators help our customers tackle the toughest challenges in drug discovery and development. We also recently announced an initiative to develop a biosimulation platform for CAR-T cell therapies with Memorial Sloan Kettering. We are excited to be collaborating in the MSK Innovation Hub and look forward to developing a biostimulation model that will help researchers, practitioners, and ultimately patients with personalized therapies. Pinnacle 21 continues to meet our expectations. Last week, we introduced an updated version of Pinnacle 21 Enterprise with a new data exchange module. The majority of pharmaceutical companies are grappling with four or more primary data sources in clinical trials. Data Exchange is a data management solution that streamlines the process of ingesting clinical trial data from external sources. This solution ensures data integrity and regulatory compliance while empowering sponsors to maintain executive oversight to drive objective decisions. Turning to technology-driven services, we delivered revenue of $54 million. representing a 10% growth on a constant currency basis compared with the second quarter of last year. Within technology-driven services, biosimulation services revenue continues to show robust growth in the high teens on a constant currency basis. We expect continued strength in biosimulation services in the second half of 2022 and into 2023. The industry has clearly shown an interest in expanding the use of biosimulation with strong growth in bookings and new customers. As demand for biosimulation services continues to grow, we are investing in our team to expand existing customer relationships as well as establish new relationships. In our regulatory services business, we have experienced more volatility this year than planned. Our customers continue to experience delays in projects, and our business in China has been impacted by recent regulatory decisions causing Chinese customers to reassess their U.S. strategy. As a result, performance in the regulatory business was below plan in the second quarter, and we are taking a more conservative outlook on this business for the remainder of the year. We believe in the strategic value of the regulatory business, which generates very healthy cash flow and remain committed to supporting our clients. With our revised outlook, regulatory services and the negative impact from foreign exchange rates, we are adjusting our revenue guidance for the full year to $325 to $335 million, reflecting an approximate $10 million reduction due to foreign exchange and $15 million related to the performance in regulatory services. Andrew will provide more details to the guidance shortly. Overall, we continue to see industry trends moving in the right direction to drive growth in the adoption of biosimulation and Cynical 21. We see opportunities to expand our software and services offerings throughout the entire drug development cycle, as well as into new modalities and disease areas. I am confident our Sitara team will capitalize on these opportunities as we continue to deliver on our mission. I now turn it over to our CFO, Andrew Shemek, to discuss second quarter financial results in more detail.