Good day, thank you for standing by. Welcome to the Certara Fourth Quarter 2022 earnings conference call. At this time, all participants are in a listen only mode. After the speakers' 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Deuchler, Investor Relations. Please go ahead. Good afternoon, everyone. Thank you all for participating in today's conference call. On the call from Certara, we have William Feehery, Chief Executive Officer, and Andrew Schemick, Chief Financial Officer. Earlier today, Certara released financial results for the quarter ended December 31, 2022. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that will include forward-looking statements, and actual results may differ materially from those expressed or implied in the forward-looking statements. Please refer to slide two in the accompanying materials for additional information, which you can find on the company's investor relations site. In the remarks or responses to questions, management may mention some non-GAAP financial measures. 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. For additional information, please refer to the reconciliation tables in the accompanying materials. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 1, 2023. 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. With that, I'll turn the call over to William. Thank you, David. Good afternoon, everyone, and thank you for joining Certara's Fourth Quarter and Full Year earnings call. Andrew and I will start with prepared remarks, then we will take questions. We are pleased with the strong finish to 2022, and we have made significant progress across our key initiatives throughout the year. We believe we are well-positioned for 2023 and beyond as we execute Certara's mission to disrupt drug innovation with our proprietary biosimulation technology and services. At Certara, we are focused on safely accelerating the drug development process by lowering the cost and increasing the probability of success in trials to improve the health and wellbeing of millions of people globally. Before we get into the details of the quarter, I would like to announce the appointment of John Gallagher as Certara's new CFO, effective April 1st. John Gallagher is a proving finance executive with experience as a public company's CFO at Cue Health and a prior career in senior finance roles at Becton Dickinson, GE, and Ford. After eight successful years as CFO at Certara, Andrew Schemick has decided that this is a good time for him to pursue other career goals, and I am very pleased that he will be staying with Certara in a key operational and strategic role after helping with the transition to John Gallagher. For the full year of 2022, our revenue and profitability metrics exceeded the upper end of our guidance ranges provided in August. Reported revenue of $336 million grew by 17% year-over-year and 10% year-over-year, excluding Pinnacle 21's contribution. We are encouraged by the pace of adoption and expanding awareness of Certara's biosimulation platform worldwide. The strong demand for biosimulation in 2022 contrasted with the underperformance of our regulatory business, which resulted in total company growth excluding Pinnacle 21 in the low double digits compared with our historical rates of mid-teens. I am optimistic that our regulatory business has turned a corner, and we are seeing early indications that the changes we made in the second half of 2022 will translate into better performance over time. Andrew will discuss more about the company's financial outlook, but we expect improved performance in our regulatory business in 2022. Pinnacle 21 has been operating within Certara for over a year, and we are pleased with the contributions from the Pinnacle 21 team. Pinnacle 21 delivered at or above all our expectations in 2022, and we are excited about what the team has been able to do with the platform headed into 2023. We continue to reach new customers with our end-to-end platform and finished 2022 with 2,376 customers. Our land and expansion strategy delivered solid growth among existing customers in 2022 as well, with about 50% of total company revenue generated from the top 50 global therapeutics companies. As of December 31st, 2022, we had 370 customers with an annual contract value of more than $100,000, representing growth of 24% year-over-year. We had 57 customers with an annual contract value of more than $1 million, up 12% from 2021. Our fourth quarter revenue was $86.6 million, representing 15% year-over-year growth on a reported basis and 18% on a constant currency basis. Revenue growth was driven by software and biosimulation services as we continue to see strong demand across all customer categories. Fourth quarter software segment revenue of $29.2 million represented 14% year-over-year growth on a reported basis and 19% on a constant currency basis. Our core Simcyp and Phoenix biosimulation software performed well, as did Pinnacle 21, delivering at or above our financial and strategic expectations for the year. Our software updates and new products in 2022 included the annual updates on Phoenix and new versions of the immunogenicity, immuno-oncology, and vaccine simulator, which were introduced into the Simcyp platform. In 2022, we launched the Pinnacle 21 Data Exchange module and the Simcyp Discovery simulator. We are committed to finding new ways to leverage Pinnacle 21's data organization and management platform across Certara. We are also encouraged by customer traction with Simcyp Discovery, an example of our effort to expand Certara's biosimulation software into adjacent use cases. Similarly, we are excited to announce the acquisition of Vyasa in early January, an artificial intelligence company with scalable deep learning software. We are working to integrate the technology throughout the existing Certara platform to help customers answer complex questions across structured and unstructured biomedical information. Vyasa was relatively small bolt-on transaction, and we expect the software integration process to evolve throughout the course of the year. Fourth quarter technology-driven services segment revenue was $57.5 million, which grew 15% on a reported basis and 18% on a constant currency basis compared with the fourth quarter of 2021. Biosimulation services continued to see robust demand, with 2022 growing approximately 20% for the year. We expect continued strength in biosimulation services into 2023 due to encouraging bookings trends throughout the year. This is testament to the strong demand we are seeing for biosimulation as our clients expand use cases across biologics, cell and gene therapies, and small molecules. Technology-driven services reported growth was impacted by the weakness in regulatory services during 2022, as we've discussed on previous calls. The regulatory business finished 2022 in line with our expectations laid out in the second quarter earnings call in August. Over the long term, we believe regulatory services is a strategic business for Certara. It derives incremental value to our customers, and it's a solid business from a financial standpoint. Andrew will discuss the near-term outlook for this business in more detail shortly. In 2022, we continued to invest in our business and expand our team worldwide. We prioritized hiring leading scientists and subject matter experts to support our growth. At the end of 2022, we had over 1,200 employees, including more than 380 with doctorate degrees. We believe we are the employer of choice in the biosimulation industry, and we offer a strong culture and commitment to innovation. In summary, we're pleased with our performance in 2022 with the rapid development and adoption of biosimulation and the proven success of our business development strategy. We believe that our team is well-positioned to drive success in 2023 and over the long term as we support and catalyze the adoption of biosimulation for drug research and development. I'd like to close my remarks by extending my deepest appreciation to the entire organization of Certara. The hard work and dedication of our people drive our mission forward. I'll now turn it over to our CFO, Andrew Schemick, to discuss our fourth quarter and full year financial results in more detail. Thank you, William. Hello, everyone. Total revenue for the three months ended December 31, 2022 was $86.6 million, representing year-over-year growth of 15% on a reported basis and 18% on a constant currency basis. For the full year 2022, total revenue was $335.6 million, which represents 17% growth on a reported basis and 20% growth on a constant currency basis. Excluding Pinnacle 21, full year 2022 growth was 12% on a constant currency basis. Note that we have owned Pinnacle 21 for more than a full year as of October 2022, and we will be reporting the business as part of our consolidated financials going forward. Bookings, which provide visibility into the year ahead, came in at $408.9 million for the trailing 12-month period ended December 31, 2022 and were up 20% year-over-year. Our total company book-to-bill ratio ended the year at 1.22. Software revenue was $29.2 million in the fourth quarter, which increased 14% over the prior period on a reported basis and 19% on a constant currency basis. The growth in the quarter was driven by Pinnacle 21 new products and biosimulation software. For the full year, software revenue was $115.5 million, up 33% on a reported basis and 38% on a constant currency basis. Excluding Pinnacle 21, full year software revenue grew 14% on a constant currency basis. Ratable and subscription software revenue amounted to 60% of total software revenue for the year, up from 54% in the prior year. Subscription ratable revenue accounted for 67% of the fourth quarter revenues. Software bookings were $39.5 million in the fourth quarter, which increased 22% from the prior year period. Trailing 12-month software bookings were $124.8 million, up 32% year-over-year. The software aggregate renewal rate was 88% in the fourth quarter, down due to timing, but resulting in a 91% rate for the year, which is in line with our plan. Services revenue was $57.5 million in the fourth quarter, which increased 15% over the prior year period on a reported basis and 18% on a constant currency basis. For the full year, services revenue was $220.2 million, up 10% on a reported basis and 13% on a constant currency basis. As we previously discussed, biosimulation services revenue growth remained strong in 2022 and was 20%, while regulatory services was a drag on the overall growth rate. Technology-driven services bookings in the fourth quarter were $80.9 million, which increased 1% from the prior year period. Trailing 12-month services bookings were $284.1 million, which increased 15% as compared to the prior year. As expected, regulatory services bookings growth was down in the quarter while biosimulation bookings trends continued to be strong. The cost of revenue for the fourth quarter of 2022 was $31.8 million, an increase from $29.3 million in the fourth quarter of 2021, primarily due to $3.5 million increase in employee-related costs, $1.1 million increase in other costs of revenues such as equipment, travel, and software licenses, offset by lower stock-based compensation and outside consulting costs of $1.6 million. Total operating expenses for the fourth quarter of 2022 were $43.5 million, an increase from $42.6 million in the fourth quarter of 2021. The components of operating expenses are as follows: Sales and marketing expenses were $7.8 million compared to $6.7 million for the fourth quarter of 2021. This increase is primarily due to $0.6 million in employee expenses due to the expansion of the sales force and $0.5 million increases in marketing and travel costs. R&D expenses were $6.6 million compared to $6.5 million for the fourth quarter of 2021. R&D expenses were up slightly due to R&D expense from acquisitions in 2021 and the timing of other related investments in research and development. G&A expenses were $18.3 million compared to $18.7 million for the fourth quarter of 2021. The decrease was primarily due to a $1.8 million decrease in transaction and M&A costs, $1.5 million decrease in stock-based compensation, offset by $2.2 million of employee-related costs. Intangible asset amortization was up slightly at $10.3 million compared to $10.2 million in the fourth quarter of 2021. Depreciation and amortization expense was $0.4 million, flat with last year. Continuing down the P&L, interest expense was $5.4 million compared to $3.3 million for the fourth quarter of 2021 due to higher interest expense relating to our term loan. Miscellaneous expense was $2.2 million compared to $0.3 million for the fourth quarter of 2021, due primarily to $2.5 million in remeasurement loss related to fluctuation in foreign currency exchange rates. The income tax benefit was $5.4 million, bringing the full year provision to $4 million compared to $9.9 million in the prior full year as a result of a change in the mix of earnings among jurisdictions, the impact of non-recurring income tax rate changes, and a tax planning project completed in the second half of 2022 to take the benefit of previously unrecognized foreign tax credits. Net income for the fourth quarter of 2022 was $9.2 million compared to a net loss of $9.7 million in the fourth quarter of 2021. Reported Adjusted EBITDA for the fourth quarter of 2022 was $31.9 million compared to $28.2 million for the fourth quarter of 2021, representing 13% growth. Adjusted EBITDA Margin was 36.8% in the fourth quarter of 2022 and 35.8% for the full year of 2022. Reported Adjusted Net Income for the fourth quarter of 2022 was $25.2 million compared to $9.8 million for the fourth quarter of 2021. Diluted earnings per share for the fourth quarter of 2022 was $0.06 as compared to a loss of $0.06 in the fourth quarter of 2021. Adjusted diluted earnings per share for the fourth quarter of 2022 was $0.16 compared to $0.06 in the fourth quarter of 2021. Now moving to the balance sheet. We ended the quarter with $236.6 million of cash and cash equivalents. As of December 31st, 2022, we had $297.5 million of outstanding borrowings on our term loan and full availability under our revolving credit facility. Turning to the guidance for the full year 2023, we expect total revenue in the range of $370 million-$385 million, representing 10%-15% growth compared with 2022. Our revenue guidance assumes continued strength in software and biosimulation services, where we have good visibility given our trailing 12-month bookings. The guidance also assumes regulatory services growth in the low single digits as compared to 2022, and software subscription revenue continues to rise to increase as a percentage of total software revenues. We expect Adjusted EBITDA in the range of $131 million-$137 million, Adjusted EPS in the range of $0.50-$0.55 per share, fully diluted shares in the range of 159 million-162 million, a tax rate in the range of 25%-30%. One last thing before we turn the call over to questions. With today's announcement, I want to take the opportunity to welcome John to Certara. John has an impressive background, and his experience with Cue Health and Becton Dickinson have prepared him well for the opportunity with Certara. Over the past nine years, Certara has evolved and grown significantly. Since becoming public, we have put a long-term strategic plan in place that the team has been successfully executing against. After six years as a private company CFO and two years as a public company CFO, now is a good time to transition CFO responsibilities to someone else. Following a transition period that will ensure a smooth and orderly transition of responsibilities to John, I intend to remain with Certara and focus on operations and growth initiatives. I will now turn the call back over to our CEO, William Feehery, for closing remarks. Thank you, Andrew. I'd like to personally thank Andy for his outstanding job as CFO of Certara. During his nine years as CFO, the company transitioned through two private owners and then had an IPO in 2020. During that time, the company has grown over 6x in people and revenues, and it remained consistently profitable. Most importantly, he helped Certara build a world-class finance organization that we will continue to benefit from for years to come. I'm very happy that we are able to retain someone with Andy's qualifications and knowledge of the company as we plan for the next phase of Certara's growth. To summarize our message today, we're pleased with our 2022 results, and we believe that Certara is well positioned for growth this year and in the future as we continue as a global leader in biosimulation. We will now open up the line for questions. Operator, can you please open the line? As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes line of David Windley from Jefferies. Your line is open. Hi. Thanks for taking my question, and good evening. I guess in Biosim, you talked about some real strength there, and particularly, I guess, in services. It looks like you are having nice luck with new logo, nice effort, maybe not luck, with new logos over the last year or so. Could you, Will, help with kind of the relative strength of demand between large customers and small, and just kind of help us understand, you know, what's pushing that and what their uptake is? You know, is it software, i.e., large customers or more services in the small customers? I'm just interested in the by-customer cohort commentary. Yeah. Thanks, David. I appreciate the question. About 50% of our business across the company is with the top 50 pharma, and the other 50% is with the other roughly 1,700 customers we have. During the fourth quarter, both of them grew fairly equally in revenue. I think it was about 15% for both segments. It's also true what you said. The buying patterns are a little bit different. The larger customers tend to skew more towards software sales. They tend to be members of our Simcyp Consortium, which, you know, counts as software sales. Many of our biotech customers are services customers. Although it's not 100% one way or the other. We have smaller customers that purchase software, and we certainly provide services to the large ones. That's just sort of a general trend. I would say nothing particularly new in this area. You know, it's been this kind of this trend for a number of years right now, and we saw just kind of a continuation of that progress in the fourth quarter. Yeah. Just as a follow-up to that. In, in terms of that, you know, you correct me if I'm wrong, but I presume a lot of your new logos come from kind of new, newly formed or relatively young companies in the biotech space. The funding environment for them has been more challenging in the last year or so. You know, Novavax had a kind of, you know, I think to a lot of people, shocking announcement last night. What kind of diligence or vetting, you know, balance sheet, durability work do you guys do on that customer base, and are you seeing any potential risks there? Yeah. Good question. The bulk of the revenues that Certara gets are in drugs that get to late phase development, clinical development. What we're seeing is there's still financing opportunities for anyone who gets a drug that far. The work we do with the early-stage customers tends to constitute a fairly small fraction of our revenues. Mostly, you know, we're doing small projects for them. We like to, you know, introduce the possibilities of Certara to them and develop our relationship as they hopefully get bigger. But, you know, they won't tend to spend a ton with us until they, till they get their drug farther along. To answer your second question, I can, you know, Andy can chime in here. All right. Well, go ahead, Andy. Why don't you talk about that part? Oh, just in terms of the diligence and, you know, we, you know, obviously with the accounting rules, you're required to ensure, you know, that the customer's got the funds available in order to recognize revenue. So we have a, you know, we do credit checks upfront and reviews of our AR on a monthly basis. So we're pretty on top of those things. We did see an increase in the bad debt reserve compared to last year. It was related to some isolated incidents, but not a widespread issue in terms of aging. Got it. Last question for me is just a description of the health of the reg services business. It sounds like you expect it to grow. I'd be interested if you'd, you know, put a number on, you know, what it actually delivered in 2022. Was it down, flat? You said it drug on growth. Like, what was the performance? Are you seeing some of those delayed projects come back? Are you seeing bookings? What gives you confidence that they can grow a little bit in 2023? Yeah, I can start, William, on this one. In terms of the reg and access services, which we group together, year over year, it was down 3%, and that's inclusive of the, you know, the large projects that we've discussed for the past, you know, last quarter and previously relating to China and some reg ops work. Underlying that is a pretty healthy business and with a lot of opportunity. In the fourth quarter, we did see return to growth there, we're remaining optimistic as we kind of build our bookings and our pipeline through the first half of the year. We incorporated low single digits into our guidance. That's great. That's all I need. Thank you. One moment for our next question. Our next question will come from the line of Vikram Purohit from Morgan Stanley. Your line is open. Hey, good afternoon. Thank you for taking our questions. two from our side. First, on the revenue guidance for 2023, could you just kind of help us unpack the scenarios that are implied by the bookends of that guidance? Secondly, on Pinnacle 21, I know you spoke about it a little bit, but I was wondering if you could provide some more detail on how cross-selling opportunities are materializing from that acquisition and maybe mention a sample project type or two where you've had the opportunity to bring together offerings from both Certara and Pinnacle 21 into one offering, and maybe talk a bit about how cross-selling there could continue throughout the year. Thank you. I'll start first with the guidance bookends. The three factors I mentioned on the call, you know, we went into the year with a conservative mindset given macroeconomic, you know, environment today, but with high visibility. We have about 80% - 85% visibility into the low end of the range, and that's a conservative visibility metric, just accounting for the work that we've sold and assuming a 90% renewal rate, which doesn't factor in expansion opportunities with existing clients. The midpoint in our base case is really bookended by conservatism around regulatory and just the general environment. The upside is related to opportunities associated with our new software products, where we don't really have a track record to extrapolate the growth forward. Is that helpful? It is. Thank you. Yeah. I can address the part about Pinnacle 21. We have seen a number of cross-selling opportunities. The simplest one was, you know, there are services opportunities tied to Pinnacle 21's user base that we're able to tap into. We've also tied Pinnacle 21 into our Integral Data Repository, which has provided maybe the most direct example of cross-selling opportunities, in terms of additional software sales either of that product tied to Pinnacle 21. There's just a couple of things that are going on right now. Thank you. One moment for our next question. Our next question comes line of Luke Sergott from Barclays. Your line is open. Hey, guys. Thanks for the question. Can you just give us a sense of the pacing throughout the year, with regards to your guidance and, you know, how the margin expansion, how the growth, how you guys are thinking about that kind of rolling on? Yes. The 2022 pacing, if you will, was on the revenue side more consistent with what we had historically, you know, excluding 2021, where we had a bigger back half of the year versus the first half of the year. In laying out our plan and our forecast, we see a very similar spread of revenue throughout the year. The difference with 2022 was earlier in the year, we made some accelerated investments, and the expectation is that those investments will be weighted towards the early half of the year, but less significant in terms of the impact on the EBITDA margin. A little closer relationship between the revenue and the EBITDA margin. Okay. Thank you. That's helpful. Last for me, a lot of News on the non-human primate supply chain. I know it's gonna take a long time for the FDA to adopt a biosimulation to replace those. What are you guys doing or having conversations with the FDA regarding alternate data and if you're even involved in those conversations? Yeah. We've been an advocate of this for obvious reasons for a long time. Simcyp contains animal models in it as well, and it's been our position that a lot of animal testing is unnecessary given the modeling capabilities. We've had conversations over the years with the FDA. The industry has been quite conservative on moving away from animal testing, in particular primates. You know, if that is a step change, there's potentially an opportunity for us. You know, we wanna be conservative and watch how this unfolds. Yeah, that's what I thought. Thanks again. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Dan Leonard from Credit Suisse. Your line is open. Thank you for taking the questions. two for me. First, can you speak to whether you're able to capture pricing in the current environment? What is the expectation for pricing in 2023, and how that compares to historical? Yeah. Sorry, I had a hard time hearing you. The pricing expectations for this year are consistent with historical, I'd say across the product line in the 3%-5% range. Then for my follow-up, similar to Luke's question, have your frequency velocity of conversations changed at all following the FDA Modernization Act 2.0, and does that specific legislation impact your business opportunity in any way, given the language around using computer modeling as a substitute for animal testing? Yeah. The language of the act actually helps us a lot. It fosters alternative methods like modeling, which basically falls, you know, into what we provide. Yeah, the short answer is yes, it's a benefit to us. Thank you. Thank you. One moment for our next question. Our next question comes the line of Max Smock from William Blair. Your line is open. Hi. Thanks for taking the question. It's Christine on for Max. Two for me. The first one, in terms of just sort of geographic strategy, can you just discuss what are the biggest opportunities and challenges you see in each of your key geographies? I know you've recently called out some headwinds in China. If you could just discuss your business dynamics here and if the situation has gotten incrementally better or worse. Yeah. I can start and then Andy can chime in. China is an opportunity for us. We opened an office there at the very beginning of the pandemic, then it was a little hard to grow it given the travel situation and the pandemic situation and everything else. The opportunity still remains. We're, you know, we are making an investment in it. Having said that, I think China today, and Andy can chime in, is like 2% or 3% of our revenue. Yes. It's still got some ways to go. And then, other geographies, you know, we have the bulk of. You know, Certara's revenue pretty much follows where the global pharmaceutical industry is. The bulk of the revenues are in North America and then Europe. We have been slightly underweight in Europe for the past couple of years, and so we've made some investments in sales, and we, you know, a couple of bolt-on acquisitions as well to bolster our footprint there, and that's been paying off. I think that's been growing. In Japan, we have a long-standing customer base and, you know, significant interest and participation in biosimulation that's been going on for quite some time. Outside of that, then you get into places like South Korea, and India, which are, there's certainly an interesting set of customers starting there and an opportunity for us that we're, you know, we're sort of slowly building our sales force so that we can tap into that. Great. Thanks. That's really helpful. Just my last one. In terms of your regulatory business upside, have you started to see any increase in business wins, potentially from the some large CROs, given some of the restructuring and maybe potential distractions at a couple of the larger players? Thanks for the questions. It's a good question. We did see a significant pickup in our bookings in the fourth quarter. When Andy talked about a recovery in the reg, that's what we're in our reg business, we were looking at that. I like to think some of that's due to the changes we've made in our management and our sales force, and so, you know, I'm not sure I could describe it exactly to confusion CROs or something like that, so. You know, we are seeing, you know, we are seeing the business recover. It's gonna take a couple of quarters to kind of rebuild the backlog to back where it was. Hence the, you know, the conservative guidance for the year for that. Great. Thank you. Thank you. One moment for our next question. Our next question comes line of Gaurav Goparaju from Berenberg. Your line is open. Hey, guys. This is Matt on for Gaurav. First question here: Are your customers with larger ACVs typically large pharma, or are some of these customers biotechs as well? Thanks. It's a mix. I would say, you know, large pharma is obviously the typical candidate, but we also have some biotechs and some foundations in the top 10 as well. Got it. That's helpful. Then for my follow-up, just wondering, in terms of revenue drivers, are you seeing more contribution from new customers joining the platform or more from existing customers increasing their consumption? We saw. We're seeing the I guess 17% revenue growth this year. We ended up with kind of a similar mix to previous years in terms of the revenue contribution from new logos to customers. We're seeing, I think, a balanced growth amongst the new and used. As Will mentioned, it was actually TTM number. The tier one customers grew about 15%, and then all other customers grew about 15% for a year. Got it. Thank you. One moment for our next question. Our next question comes line of Michael Ryskin from Bank of America. Your line is open. Hi. Great. This is Wolf on for Mike. Thanks for taking the questions. I wanted to start off with M&A, specifically on the offset. Can you give us any color on the size, growth, margin profile or at least the synergies and cross-selling opportunities you expect to realize there? More generally, you guys have been a fairly acquisitive company historically. Does your outlook for the year embed any M&A contribution beyond the deals you've ever already closed, or would that be a source of upside? Yeah. The answer to the second one's quick, which is it, the outlook does not include any M&A that we've not already completed. The answer to the first question is kind of the similar to what we've, you know, what we've been talking about and what we've been executing for a while now. We look at acquisitions primarily in two categories. One are small bolt-on acquisitions where we can acquire talent. These tend to be, you know, quite small but much easier than hiring, you know, people one at a time, for example. To the extent that we do more significant acquisitions, we're primarily looking at software products that would expand our position in biosimulation. You know, we kinda, we look at the strategy of the company as being able to provide data modeling and analytics for the really critical decisions in drug development. You know, when you look at it through that lens, there's, you know, there's some interesting places that, you know, over the future we can potentially go to. There's a big world out there. You know, as I said many times in the past, you know, we're in an exciting space. There's a lot of really good ideas. We can't do them all. You know, we can't vet them all internally, but at the same time, we, you know, we're perfectly happy if we find no acquisitions. You know, it really depends on something, you know, finding something that's strategic, that fits really well with the company and that we can justify the price on an accretive basis with our shareholders. Got it. Much appreciated. On an unrelated follow-up, are you seeing any change in customer behavior from your large pharma cohort due to the Inflation Reduction Act, or are you taking any steps internally to position Certara for any changes in legislation over the medium to long term? Yeah. We're aware of the discussions in pharma about the Inflation Reduction Act, but we haven't seen anything that would affect us there. You know, we tend to invest in whatever pharma does. What, you know, whatever therapies or molecules that pharma's interested in is, you know, we tend to get pulled along. If there's a change in their investment from, you know, one therapeutic area to another, that will eventually affect us. We haven't seen signs of that so far, or any discussion of a, of a major shift that would affect us. Got it. Thanks a lot. Thank you. One moment for our next question. Our next question comes from line of Joy Zhang from SVB Securities. Your line is open. Hi. congrats on the quarter, and thanks for taking my question. I think you'd highlighted sort of the better than expected performance on the software side. obviously, you know, that shows, you know, strong traction in the marketplace and, you know, execution. Curious if there's anything to call out in terms of, you know, any sort of improvements in the overall sales environment, especially compared to sort of your prior commentary about, you know, elongated sales cycles in the past couple earnings calls. Thanks. You wanna start with that one, Andy, or you want... I couldn't quite hear everything, but if you could start, I can... I don't know if it's my speaker. Yeah. Sure. Well, we ended the year with a book-to-bill ratio of 1.22. If you recall, the way we report bookings is on an annual basis. On the occasions where we might do a three-year deal, we only report one year to make it, to make it indicative of how we're likely to for due for our current year. 1.22, you know, is a number that is pretty healthy and, you know, ought to produce guidance, you know, re-revenue results within the guidance. We've clearly got a lot of work pre-sold already as we're going into the year. You know, I think during the fourth quarter, we saw healthy bookings. Our bookings tend to vary a bit quarter to quarter because, you know, you'll have large customers will, you know, book a little bit early or a little bit late. It doesn't really matter for revenues which quarter they get into, as long as they get into the year. That's why we tend to guide everybody to look at the trailing 12-month bookings number, which is quite healthy as we go into 2023 on, you know, on software and on services as well. We've got a lot of, you know. We've accelerated our new product introductions since the IPO. We've got some new products out there, which, you know, started to get some early adoption last year, and which we've got, you know, I think some hopes and reason to believe will start to accelerate, and we've got more things in the pipeline as well. I mean, overall, I think it's, you know, we're in pretty good shape and there's a lot of really good things going on in terms of future development that we think will pay off as well. That's helpful. As a follow-up, would you have any sort of update on the Memorial Sloan Kettering partnership you announced last summer, and how that's progressing? You know, that it's something that takes a few years to be meaningful on the revenue side, but any sort of early color on the product development side would be super helpful. Well, it's still a work in progress. The Memorial Sloan Kettering relationship gave us access to, you know, extremely valuable data that we can use to build biosimulation around it. It would be, you know, extremely, you know, it's kind of a one-of-a-kind. It'd be extremely difficult to get access to that. We are investing in it and proceeding, but nothing to report yet. I mean, as we said before, these things tend to take, you know, two to three years before they come out with a product. You know, give it a little bit of time, and I think we'll see something pretty cool come out there. Great to hear. Thank you. Thank you. I'm not showing any further questions in the queue. I will now like to turn the conference back to William Feehery for closing remarks. All right. Well, thank you very much, Victor. I just wanted to say before we end that, you know, Certara overall is, you know, proceeding quite well through 2022. Despite the hiccup we had, the regulatory business, that business is quite profitable. It's recovering and, you know, we believe in it, and we think that it will add to the company as we go forward. The core biosimulation business is growing great. We have been extremely successful in integrating Pinnacle 21. We hit all the goals that we expected to hit, and we gained a really great software team that, you know, integrated into our software group, which has benefited us in a lot of different ways. Overall, I think the company's, in, you know, in a really exciting situation as we head into 2023, we look forward to talking to you in the next call. Thank you very much. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.