Good afternoon, everyone. I'm Jeff Garro, the healthcare IT equity research analyst here at Stephens, and it's my pleasure today to welcome Certara to our Stephens Investment Conference, and specifically John Gallagher, the Chief Financial Officer.
Hi, Jeff.
Welcome, John. Thank you again for-
Yeah, thank you. Thanks for having us. Much appreciated.
Absolutely. So we'll just dive right into the questions.
Okay.
See how much we can get through. Wanna start on the end market and bookings activity, and on the last earnings call, you talked about a stabilizing end market that wasn't just better than Q2, but saw month-to-month improvement and that continued in you know throughout Q3 and even into October. So I was hoping you could elaborate on what changed specifically month-to-month in terms of pipeline bookings and the conversion of backlog into revenue.
Yeah. Yeah, that's right, Jeff. So, Q3 was marked with some stabilization in our services bookings, which you noted in the question. We, coming off of a Q2 where we had a decline, we saw a return to growth in regulatory. Specifically, that was a highlight. But in services broadly, we saw growth, and we saw customers in our tier one and our tier three customer categories, we saw double-digit growth in the deal size of those bookings, which we viewed as a good data point. Now, we, we're not really necessarily seeing that as driven by an improvement in the end markets, although, you know, hopefully that is a first sign of some improvement in the end markets.
But, moreover, we see that as execution by the team and some focus and execution on pipeline that we saw coming out of the summer, that we converted into bookings moving into Q3. So, that was the recovery that we saw in the services bookings on the quarter. And on the software side, we had 7% software growth in bookings, and that was impacted by some timing. So that was a little lower than what we saw in Q2. We had a big Q2 in software bookings, where we saw a bit of pull ahead into that quarter, and then some push out of Q3 and into Q4, which is our typical seasonality, where we usually do have a Q4 with heavier software bookings.
So, that's what was happening in the tier one or across software bookings. Specifically, though, for tier one software, we did call out where we saw a little bit of weakness. Not really showing up in the results yet, but a little bit of weakness in software bookings on tier ones, where the volume of those deal counts, we saw some slowness. We've talked about slowness before in decision-making, meaning the negotiation process, all the way to contracting, to making a pipeline deal become a booking. And we saw that specifically in tier one for software this quarter. So we called that out as a driver as well.
Excellent. That's helpful. Maybe we'll dive in a little bit further on the nuances in what you're seeing from large pharma companies versus emerging biotech. You've spoken some on volume of deals and deal sizing, but is there anything changing around how those different types of customer categories are using biosimulation, or is it mostly driven by their budgetary processes and the funding side of things for emerging biotechs?
Yeah, for emerging biotechs, we truly think it's a product of the environment there, where there simply are fewer well-funded biotechs and therefore, you know, we see some compression in the amount of bookings that we have there. So that dynamic seems to, you know, be playing out as people expect, and we see that in our results. Even with the recovery, we're still not back to the growth rates and services that we'd seen historically. So although we're pleased with the trend, we do have higher expectations for what we're able to grow the software business into the future. On the large pharma side, you know, interestingly, we saw some layoffs from some of the big pharma players. We've seen some slowness in the negotiation process for new bookings.
We've seen some cautiousness with the spend, and so that dynamic is one that we haven't seen that really flow through into the software results, but it is something that we've talked about, so.
Appreciate that. Maybe we'll ask another one on the software side of things, and, you know, important to recognize that, I think the biggest driver of software bookings is renewals, and you guys have a strong track record there, and I've spoken to the year-to-date results and the expectations for Q4 to be in line with historical renewal trends. But I really wanna ask about the incremental piece, the kind of non-renewal portion of software bookings, and if there's anything that you would call out there in terms of specific products or adding new customers or, you know, so any existing customers looking to just expand the use across departments or therapeutic areas.
Yeah. Yeah, so you're right, renewals are a big driver of the business, and that's what some of the key components of the software timing impacts that I mentioned were do relate to our renewal achievement on the quarter as well. So, as you look at it, I guess what I'd point you to think about, new and then expansions. One of our key strategies when it comes to, especially for Tier One customers, is what we call land and expand. So you're in with the customer, and then you expand, and the key metric that we follow for looking at that is the software net retention rate.
On the quarter, our software net retention rate was 107%, which basically is indicative of keeping all those customers and then expanding them to get you above the 100%. And so we have done that on a quarter-over-quarter basis each year. And so I think that's key to understanding, you know, how we're able to expand the business rather than focusing strictly on solely the renewals coming through. So that's a piece of it. Then on top of that, too, we're rolling out new products on a regular basis. We've rolled out new Simcyp products. We're expanding the platform for Pinnacle 21. We have additions to some of our other software platforms, including D360.
So we're excited about what these other software programs can do for our growth as well.
Maybe one more follow-up on the software side of things. You know, certainly see helpful updates from Certara around new features and capabilities that you've added to existing products, and I mean, there's R&D spend towards both new products and the existing products. But the additions to existing products impart additional value to your customers, and if you could discuss how you can capture some of the value that you're delivering there in terms of annual price increases, that would show in the net retention figure, but not the gross renewal figure that you report on a quarterly basis.
And, you know, help frame that up in the way that might be unique versus some software companies just include kind of a CPI-like inflator in their contracts versus kind of the commitment to deliver incremental innovation as part of the renewal conversation.
Yeah, yeah. Yeah, good question, Jeff. I mean, we are seeking, as we innovate, to meet the needs at our customers, and if we're able to do that, and we are, you can see it in the results, then we're able to price for that, as well. And as the leader in the market for biosimulation, then that gives us a good position with which to be able to innovate for the benefit of our customers and then be able to take price without being disruptive at the same time, because we're delivering the value to be able to get that price. So that's how we approach it. I've mentioned a few of the products that we've been working on. So we're rolling out new products across, whether it's Phoenix Hosted, whether it's across Pinnacle.
I mentioned a few Simcyp products. Each of those is meeting a demand point by our customers that will enable us to reach some of our pricing goals into the future.
Excellent. That helps. Maybe toggle over to the services side of things on the end market and demand activity. You know, over the last year, probably learned that biosimulation is resistant to some end market headwinds, but, you know, probably describe it as not completely immune. And, you know, the resistance piece of it probably found it in relatively low adoption of biosimulation. So from kind of a FDA or other regulatory perspective, what is Certara both seeing and actively doing to increase regulatory acceptance of biosimulation?
Yeah, Jeff, that's a good point. We see the adoption runway being a long one, with opportunity for increased awareness and then ultimately the adoption of biosimulation by the industry. We have active dialogues with the FDA, so that's an ongoing active dialogue. They are a big user of our software, so they're one of our biggest users of the biosimulation software that we sell. In addition to that, we provide regular training to staff of the FDA, and we host frequent webinars to train on the software. All of which is with the goal of, as you said, increasing the adoption and sort of the tone on biosimulation. So we see the support of the FDA.
We believe that they can see the value proposition here, which is reducing the time and the cost for drug development, and we're optimistic that they'll continue to roll out additional guidance that's in support of biosimulation.
Understood. Then to follow up with kind of a blocking and tackling type question, what is Certara doing with customers to increase adoption of specific use cases of biosimulation? So, you know, one client moves forward with a use case that might be more on the cutting edge. How are sales, account management, and delivery teams working together to make sure that that one client's success translates into an opportunity that can be followed through on with the rest of the customer base?
Yeah. Well, you know, Jeff, we've recently done a couple of reorganizations within the team. One is to combine our services teams into one services organization, and the other is the integration of the commercial team or the sales force. On the services side, the thought there was to be able to combine services into one team, with the thought of being able to drive selling opportunities across each of the services platforms, which would be biosim services and regulatory services. We have a natural cross-sell point between our biosim customers who we're working closely with on drug development who are then also able to convert into regulatory customers as they approach the submission timing.
So that's some of the synergies that we see coming from the services combination. On the commercial side, and to your point on, you know, how do we, how do we approach the market, and how do we, increase sales as a result? On the commercial side, we've integrated the commercial team under a Chief Commercial Officer who is experienced with selling our software platform and has been with the company for a few years selling the software platform. Now, has a view across the whole company, and what we think we can improve upon there is to be able to sell really one Certara to our customers.
We sometimes receive comments that, our customers will say they're, you know, they need to talk to three or four different people in order to buy the Certara products that they're looking for. We think we can catalyze some change to streamline that. And on top of that, to increase the call point with our customers. And increasing that call point, you know, going higher in the organization, is an opportunity for us to articulate the value proposition for Biosimulation on the, the, the saving time and the saving money in drug development at the right level of the organization, where the decisions are being made around, allocating capital, as it relates to R&D. So when you take those two things together, we think that'll help, drive growth related to the org changes.
Got it. Just now and on recent earnings calls, you've spoken more about an effort to bundle products together with clients, and you talked about the kind of go-to-market execution aspect of it. But from a product perspective, should we think about that as multiple software products bundled together, or a bundle of software and services that works for particular customers, and regulatory plus services together, you know, earlier on in the customer journey? What are the right kind of categories or parameters for bundling?
Yeah, I mean, I think historically, the natural bundle points had been in services. As you described it, it could be in Biosim services, pushing over into regulatory, or it could be across our software platforms. But I think, you know, as I just mentioned, some of the commercial integration and the integration of our services teams is really gonna enable us to have line of sight across the organization, and like to be able to see us, be able to, to bundle not only what we're selling from a software perspective, but even in combination with services. We do, as an organization, tend to... Our services are gonna be sold initially to some of the smaller Tier Three customers.
And so to the extent that we can bring those companies earlier in their life cycles in as Certara customers, and then grow along with them as they succeed through the drug development pipeline, then that enables us to be able to sell them services initially, and then ultimately move, as they grow in their needs, into selling software products as well.
Got it. Wanna ask more about the regulatory business and maybe start with the prompt that Certara was often bifurcating the level of interest between Biosimulation and regulatory over the last year. But you described both of those categories bouncing back in Q3. So wanna ask specifically, what changed on the regulatory side and, you know, kind of just acknowledge that there were probably more moderated expectations for a bounce back there, whereas on the services side, I, you know, I think the kind of consensus view was once the end market stabilized to some extent, you'd start to see a bounce back in those bookings. But you saw a bounce back in both-
Yeah
... in the most recent quarter.
Yeah, yeah. Yeah, that's right, Jeff. We were happy that it did happen in both areas, actually. As it relates to regulatory, then the performance in the quarter did exceed our expectations as far as we had some wins in the Tier One customer category that enabled that business to return to growth more quickly than we had anticipated. So that was a sign of strength and a good competitive nature moving through the quarter, because we said we wanted to be more competitive. We saw the results of that with the regulatory bookings that we posted on the quarter. So that mainly centered in the Tier One, and we were happy with the execution. In Biosim services, Q2 had the...
You know, that the Biosim to your point, Jeff, Biosim services was never in a spot where it was going to contract on the year, unlike regulatory, so a little bit different position. But that being said, in Q2, we did see the bookings decline in Biosim services, and so what we were describing there is that both our Tier One and our Tier Three customers in Biosim services were we saw solid growth on a year-over-year basis. We saw growth also in the size of the deals, and the Tier Ones and the Tier Threes both grew double digits. And so that we took that as a positive sign on not only our execution in that case, but on the environment to some extent as well.
Mm-hmm, one more on the regulatory side of things, the improved activity that you saw, would you call it just simply better execution or better execution because of the reorganization efforts, or anything that was done to improve the offering and improve the value that you can offer to customers on that front?
Right. Right. Yeah, I, yeah, I think it's a combination there. I mean, certainly we had a sharp focus on execution. At the time, during the summer and at the time of the August call, we had said we could see business in the pipeline to be won in that space, and that we were seeking to be competitive there and win it, and we did that. So I think there's an element of execution, there's an element of early wins from the combination of our services teams, because that is a piece of it as well. And I think those two things together were the primary drivers.
Got it. Maybe transition to the revenue side of things, and back over to software. Wanted to ask about the one of your flagship software offerings, Phoenix, now offering that via a hosted model, and, you know, recognizing that it isn't a kind of a traditional license to SaaS transition that would create accrual revenue headwinds, because most of the customers on Phoenix have been on a annual term license. But maybe you could still give us an update on the uptake of that hosted model, and to the extent that there are any, the financial statement implications.
Yeah, sure. Yeah, so, our Phoenix-hosted product is something that we're excited about, because I think it benefits both the customer as well as ourselves. It's... And it's really where the market is moving on software technologies like Phoenix. We see the growth in Phoenix-hosted as a product is still sort of in the early innings, I'd say, at this point in time. So I think we're gonna see a stronger uptake in that growth as we move into 2024. So it's still early as far as the conversion from annual renewal license on Phoenix into Phoenix-hosted. So we've done somewhat, we've made some strides during 2023. I think we'll see more of that happening during 2024. And as far as the revenue impact, you're right.
Like, most typically, you would see as you're moving from an annual renewal license into a ratable subscription on a SaaS base, then you could potentially see some slowing in revenue growth for 12 months, and then threading that out. 12 months all at once, threading that out over a 12-month period. But one thing that I guess I'd wanna point out as it relates to Phoenix-hosted specifically is it's also something that we're gonna be able to price for. So, the bolus of the conversion to Phoenix-hosted is really, it's really in the future for us. So...
I think the other point I'd wanna leave you with is that, from a pricing perspective, we are able to price, and that helps mitigate any of the revenue headwind that we could potentially experience from that transition.
Understood. Then on the services revenue line, you know, just wanna think about the flow-through from bookings to revenue. And you mentioned recent trends in services bookings, and maybe we could add some precision to the discussion about how we think about the dynamics of rebounding off of a near-term bottom in bookings, and any metrics that investors could focus on to evaluate the conversion of services bookings to services revenue.
The extent to which a sense of urgency from your customers might drive a higher conversion rate from, you know, kind of call it a. You don't report a backlog, but we could kind of come up with a backlog based on trailing bookings, and whether that kind of sense of urgency can lead to higher conversion or whether things are just gonna move at the pace that the regulatory environment mandates they move at?
Yeah. Yeah. Yeah, no, I mean, look, a sense of urgency at the customers will catalyze a faster conversion of bookings for us. That, that definitely is the case. During the course of this year, we've seen the opposite of that to some extent. We've seen some, some delaying or some slowing in the sense of urgency, and you saw that impact our bookings and then ultimately our revenue as a result. So I guess what I'd say is that as we finish through this year and moving into next year, then we do expect to be able to post the bookings, and then the conversion for services revenues from those bookings can vary.
In software, the conversion is relatively quick, meaning, you know, it could be a booking to a software revenue conversion all in the same period, just by the nature of an annual renewal license. In services, it's a little bit different 'cause it's on a project-by-project basis. We put up a booking, the that project, the start date of that project, as well as the duration of that project, is gonna- is what's gonna drive the conversion to revenue. And I think that to your point, like, if we saw a pivot in the sense of urgency by our customers, not by us, we have a high sense of urgency on converting that and engaging them as quickly as possible.
If we saw that sense of urgency change on a customer basis, that would certainly enable our conversion to accelerate as well.
Any rule of thumb on the lag between a near-term bottom in bookings to services revenue, revenue growth?
Yeah, yeah. I'd say it's not really a rule of thumb, but as I mentioned, software can be a quick turn between bookings and revenue, just by the nature of the product and the way that it's sold. Services, on the other hand, from the time that it becomes a booking to when we recognize it as revenue, would be on a quarter or two type lag.
Got it.
Oh, the other thing I'd want to point out, too, is that we don't put... And this sort of puts a guardrail around it, too, is that we don't put up bookings in our reported bookings number that we don't think will convert to revenue within a 12-month period. So that, that's the other piece I'd want to put in there, too.
Well, excellent. That helps. Maybe transition over to profit margins, and in talking about EBITDA margins last quarter, you know, still very healthy on a absolute basis at 34%, but slightly behind relative to historicals that have typically been 35% + for Certara. And you and Bill discussed not cutting back on investments in the business. So maybe to start off with one question on this front, so maybe you could review what you saw in the utilization of your staff on the services sides throughout the last quarter, and kind of how that changed from the first month of the quarter to the last month and even into October.
Yeah. Yeah, sure. So, yeah, from a margin perspective, the margin was slightly below our typical 35-ish%. To your point, we said that we were investing through this cycle, and that remains to be the case. As it relates to utilization, specifically impacting the margin this quarter was, you know, our regulatory team was somewhat underutilized during Q2, and then as we approached the beginning of Q3. That dynamic changed during the quarter. Obviously, that's how we put up the bookings that we did. So we were in a position where we were glad we didn't make any knee-jerk changes to that team, or we wouldn't have been able to pull down the bookings that we saw.
So there was a little bit of overhang hitting the margin from lower utilization in regulatory at the beginning of the quarter that we didn't have as we exited Q3. So that's one. That's one comment I'd make as it relates to regulatory. Within Biosim services, utilization there, it depends on the department. You know, some departments within Biosim services are fully utilized, and it kind of depends on what the type of project is that the customer is asking for, and what the subject matter expertise is within those teams. Some are fully utilized, and we can't hire people fast enough to come into those teams, and that's why you see us continue to hire billable headcount during the course of the year.
In other pockets, though, the mainly ones that are more exposed to the smaller Tier 3 customers, then the demand is not as high, and in those cases, we're watching utilization closely.
Excellent. May I follow up just on the kind of staffing resources side of things. What have you seen recently in terms of the labor market? So for a while, you know, staff resources were very scarce, and, you know, there were very high expectations from a compensation perspective. Has that evolved as the kind of life science end market has evolved over the last 12 months?
Yeah, I'd say that we're still in a challenging environment as far as hiring the subject matter experts that we want to bring onto our teams. But Jeff, you know, to your point, that it does feel like that dynamic is shifting, and we're hopeful that Certara, since we are hiring in that space and looking for talent in that space, that, you know, we're able to take advantage of that and hopefully get some more of the billable headcount with the kind of expertise that we need in-house as soon as possible.
Anything to call out from a geographic perspective? Is the U.S. hiring environment markedly different than what you see in Europe or APAC?
Yeah, I mean, interesting question. So as it relates to the subject matter experts that we hire for Biosim services, consultants, as an example, then we seek to hire that kind of talent from all over the world. So wherever they might be, you know, we will seek them out, and we bring them into the organization. So and, and that, and that's not something new. That's something we've been doing on a year-over-year type basis. No changes to call out geographically, other than, you know, that's each of those markets are areas that we've been monitoring and hiring into.
Mm-hmm. Continuing on, on the investment thread, you know, I just think just philosophically, from what we've heard from the organization and also looking at the, the year-to-date results and the expense part of results, our R&D seems to be the, the biggest investment area, and given the continued push towards more software offerings, should we think of 2023 as an outlier year in terms of R&D investment, or is there another way to ask it? Is there an optimal level of R&D spend as a percentage of revenue?
Yeah, I mean, the optimal level is not what we're experiencing in it right now, at this point in time. The optimal level over a long term, in our opinion, would be that you'd grow expense lines, including R&D, at the rate of sales or less. But not during a period like we're in right now, where we're investing in our software platforms. Specifically, AI is a key investment area for us that we've been expanding on. You see the increase in R&D in 2023 is effectively the by-product of us doing the Vyasa acquisition and bringing that development team onto our R&D line. And then as we look forward, too, I think it's fair to say that that investment isn't complete. Like, that's not ending over the next couple of months.
So you know, there should be an expectation that we continue to make those investments in what we think are the key growth catalysts for the company, going forward. Meaning, expanding accessibility with Simcyp, expanding the platform for Pinnacle 21, and then on top of that, adding the AI functionality across our portfolio, are some of the key growth drivers that we see going forward, and so we're making that investment. But over the long term, as those investments begin to pay off and show up in revenue, which we clearly believe will be the case, then the expectation is that the optimal rate for, like, R&D expense would be to be at the rate of sales growth or below it.
Appreciate that, and follow up a little bit further there. Just from a financial and kind of analytical perspective, you know, a lot of investors looking at software companies think about R&D as a percentage of software revenue, when the services are more kind of implementation and training on how to use the software. Certara's a little bit different, so how would you point investors to think about R&D in relation to the software revenue and the services revenue as well?
Yeah. Yeah, I mean, look, our model is a bit different as you know, and as you described. It's... You know, the services team isn't there solely to support, you know, the software rollout. Instead, our services team are, you know, are subject matter experts that can be bolted on to in-house teams or actually, you know, be in place of an in-house team to conduct biosimulation modeling and activities that many companies don't have the capabilities to do in-house. And so what you see. And that's why we talk about hiring those experts where they are to help enable our service offering, 'cause that. Our core service offering is that. It's not so much necessarily support of the software, which of course, is something that we do also.
As it relates to R&D, the primary focus of the R&D spend is the expansion of the software platforms. And so that's the way that the P&L geography works.
Got it. Got it. Understood. And, you know, maybe we'll try to talk about AI in relation to both software and services. I mean, you guys were very timely with that Vyasa acquisition and have been very productive in terms of deploying AI across different parts of the portfolio. As we think about continued innovation and development going forward there, can you help frame up how AI can either make the software more self-serve and in turn command a higher price point, versus making the services professionals more efficient?
Yeah, yeah. Yeah, so some of both, Jeff. I mean, we're very excited about some of the rollouts we have coming up. CoAuthor is what we're branding our regulatory writing AI product that basically will help us and/or our customers in the regulatory writing, formatting, and submission process. So that's something that we're excited about, and that's a nearer term opportunity. Certara AI is another opportunity that is a... It is our database that's been learned from public information that allows for users to be able to ask drug development questions and get back deeply meaningful information based on the information that we've been able to impart into it. And that all is a thanks to the Vyasa acquisition.
As you said, we were fortunate in our timing of the, of the Vyasa acquisition. We closed that at the tail end of last year, and during the course of 2023, as you noted in our R&D expense, we've been spending considerable time and energy integrating Vyasa across the Certara platform. One of the areas where we would wanna go next is what you said, Jeff, which is, how do we, how do we implement AI into biosimulation, too? How do you aid the process for biosimulation modeling? How do you speed that process? And that's something that is what we're spending our time on as well.
One more on the profitability side of things. How should we think about the commercial reorganization efforts, in terms of finding the right balance between efficiency and generating stronger growth?
... Yes. Yeah, so I think that, you know, for our commercial organization strategy, then, one of the key reasons that we made that move was really to enable further growth. So it wasn't so much an efficiency play for us. We didn't view it as a sort of a cost savings or synergy perspective, as much as we see it as an ability for us to engage our customers more meaningfully, so that they can understand the full breadth of what Certara offers, and be able to to sell them the value proposition of biosimulation at the right level of the organization. We think if we're successful at doing that, which we will be, then that is going to catalyze additional growth for us. So it's...
You know, we didn't make the move really to eliminate any positions or to find cost savings. It's really on how do we change the approach and angle that toward a more customer-friendly approach that will enable growth.
Makes sense. Offer the opportunity up to the audience, if there's any questions before we try to squeeze the last few in. I'll go ahead and ask about capital deployment. Maybe you could give us an update on those priorities and thoughts on the current M&A backdrop in terms of, you know, both where private company valuations are and, you know, particularly with how Certara has uncovered some fairly unique assets, I would say, this year, along with your capacity to integrate further acquisitions from here.
Yeah. Yeah, so I mean, look, the balance sheet is in very good shape. We have cash. Our net leverage is very low. It's approaching zero now, and so that positions us well. We have been historically an acquisitive company. We plan to continue to be an acquisitive company. That's a part of our history. So the balance sheet's got us well positioned to be able to execute on M&A opportunities. The other thing that I'd point out is that as it comes to M&A opportunities, we have. We're sort of we lean more toward on the software side for acquisitions, although you will see us do services acquisitions, too, if it's strategic to the growth trajectory of the company.
So that's a couple of points there. You're right, though, too, Jeff. We have been able to find specific targets that may not be obvious to everybody. And the reason for that is, most often, any kind of tuck-in acquisition that you see us bring in is a company that we've worked with in the past. And so maybe we've already partnered with them. We've already worked together. We have an understanding of what their business does, and then ultimately, we believe that it makes sense in our portfolio, rather than them operating as a partner with us. And so I think we've been fortunate in our ability to identify specific tuck-ins, and we've done that through the course of this year, that are additive to our portfolio.
Excellent. Excellent, that helps. Maybe squeeze one last one in and kind of return to the value proposition that Certara offers. You know, I think lots of cases are out there where your customers generate an extremely high value from your software and services and being able to reduce the heavy expense of clinical research. And would love to hear more from you on your efforts to measure that. And, you know, heard one of your competitors speak recently about kind of the number of waivers that their clients are able to obtain from the FDA, not to, you know, eliminate an entire human-based clinical research study, but to get a waiver from conducting one piece around dosing or drug-drug interactions.
So just around the ability to quantify the ROI to a greater extent, and maybe you're doing a lot of that today with customers, but yeah, haven't been speaking explicitly about that with investors.
I see. Yeah, yeah, a good point, Jeff. I think that that is an area where I think that we, we've got the opportunity to say more about the key successes that we've had. Obviously, we do talk to our customers about that. We've enabled significant success related to hundreds of drugs that have gained approval, and I think that as an organization, I think that we can probably say more about that because it's indicative of the adoption of biosimulation, which we believe has a very, very strong trajectory, and of which we are the market leader. Point taken. I think it's something that we'll be able to speak more about.
Excellent. So I think we'll wrap it up there. Thank you again, John, for participating in the conference and spending time with us today. Really appreciate it.
Thanks for having me, Jeff. I appreciate it.