GET DAILY SIGNALSCertara (CERT) Up +35% Pre-Earnings: Software Revenue Climbs +11% in Q3
Key Takeaways
- Total revenue reached $94.9 million, up 4% year over year on a continuing operations basis for the third quarter ended September 30, 2026.
- Software revenue grew 11% to $48.8 million, marking the company's first double-digit organic software growth quarter in two years.
- Services revenue declined 2% to $46.1 million, reflecting the ongoing transition to a specialist-led services model.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 6% to $30.2 million, with an adjusted EBITDA margin of 31.8%.
- Adjusted diluted earnings per share (EPS) came in at $0.09, in line with consensus expectations, while the GAAP (Generally Accepted Accounting Principles) diluted loss from continuing operations was $(0.02).
- Certara narrowed its full-year 2026 revenue growth outlook to 2%–3% and updated its adjusted diluted EPS guidance to $0.31–$0.34.
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Why This Quarter Matters
Certara's third quarter results offer a critical read on how its software-led transformation is progressing following the divestiture of its Regulatory and Medical Writing business in May 2026. With that unit now reported as discontinued operations, investors are focused on the health of the company's higher-margin software portfolio and its ability to reignite growth in its services segment. The quarter matters because it tests whether Certara's cost discipline and product investments—including cloud migration and new AI offerings—can translate into durable revenue and margin expansion amid a mixed environment for biopharmaceutical research and development spending.
Breaking Down the Reported Results
For the third quarter of 2026, Certara reported total revenue of $94.9 million, a 4% increase from $90.9 million in the prior-year period on a continuing operations basis. Software revenue climbed 11% to $48.8 million, while services revenue declined 2% to $46.1 million. Total bookings rose 4% to $92.5 million, with software bookings up 15% and services bookings down 5%. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted EBITDA increased 6% to $30.2 million, and the adjusted EBITDA margin improved to 31.8%, up from 31.5% a year earlier and 28.1% in the second quarter. The company's net loss from continuing operations narrowed to $3.6 million from $4.8 million a year ago. Adjusted diluted EPS was $0.09, in line with consensus, while the GAAP diluted loss per share from continuing operations was $(0.02). Certara ended the quarter with $214.9 million in cash and cash equivalents, supported by $30.7 million in cash generated from continuing operations.
Market Reaction and Investor Sentiment
Heading into the report, Certara shares had climbed roughly 35% over the prior three months, reflecting optimism about the company's restructuring and renewed software growth. The third quarter results delivered a mixed picture: double-digit software revenue and bookings growth alongside a narrower loss validated the turnaround narrative, while the continued decline in services revenue underscored that the specialist-led services model will take time to fully convert pipeline into bookings. The company's decision to narrow full-year revenue growth guidance to 2%–3%—rather than raise the range—kept sentiment measured, with investors weighing the strength of the software business against lingering softness in services and the broader pressure on biopharmaceutical spending.
Forward Outlook and Key Factors to Monitor
Looking ahead, investors should watch whether Certara's software momentum is sustained beyond a single quarter. Management pointed to strong retention, cloud conversion of the Phoenix platform, and new AI-enabled offerings as key growth drivers, with nearly 10% of Phoenix accounts now migrated to the cloud. The pace of that cloud migration and the adoption of new AI capabilities in 2027 will be important indicators of the company's ability to deepen customer relationships and lift recurring revenue.
On the services side, the focus is on execution. Services revenue grew 3.5% sequentially in the quarter, and a trailing 12-month services book-to-bill ratio of 1.15 suggests that bookings continue to outpace recognized revenue. Converting that pipeline into revenue will be central to whether the company can meet its full-year targets and rebalance toward a more predictable growth mix.
Finally, cost discipline remains a watchpoint. The improved adjusted EBITDA margin reflects savings from earlier restructuring actions, and Certara has signaled it will reinvest some of that flexibility into AI, cloud solutions, and new products. The balance between margin protection and growth investment, along with any further updates to full-year guidance, will shape how investors assess the durability of this turnaround.
Using AI Tools in My Research Process
In my analysis of Certara and similar names, I often turn to Tickeron’s AI Screener to quickly filter for stocks showing strong software growth patterns, solid margins, and favorable technical setups. The tool lets me scan across industries with customizable criteria like revenue trends, EBITDA margins, and AI signals, helping surface comparable ideas without hours of manual work. It has become a regular part of how I cross-check earnings results against broader market opportunities before forming a view.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CERT saw its Stochastic Oscillator peaks and leaves the overbought zone
The Stochastic Oscillator for CERT moved out of overbought territory on November 02, 2026. This could be a bearish sign for the stock and investors may want to consider selling or taking a defensive position. A.I.dvisor looked at 60 similar instances where the indicator exited the overbought zone. In 54 of the 60 cases the stock moved lower. This puts the odds of a downward move at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for CERT moved out of overbought territory on October 30, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 27 similar instances where the indicator moved out of overbought territory. In 22 of the 27 cases, the stock moved lower in the following days. This puts the odds of a move lower at 81%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CERT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 83%.
CERT broke above its upper Bollinger Band on October 28, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 20, 2026. You may want to consider a long position or call options on CERT as a result. In 71 of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 80%.
The Moving Average Convergence Divergence (MACD) for CERT just turned positive on October 20, 2026. Looking at past instances where CERT's MACD turned positive, the stock continued to rise in 33 of 43 cases over the following month. The odds of a continued upward trend are 77%.
Following a +3.55% 3-day Advance, the price is estimated to grow further. Considering data from situations where CERT advanced for three days, in 234 of 301 cases, the price rose further within the following month. The odds of a continued upward trend are 78%.
The Aroon Indicator entered an Uptrend today. In 90 of 118 cases where CERT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 76%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 15 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.922) is normal, around the industry mean (4.886). CERT has a moderately low P/E Ratio (-27.682) as compared to the industry average of (13.782). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.133). Dividend Yield (0.000) settles around the average of (0.011) among similar stocks. P/S Ratio (3.051) is also within normal values, averaging (6.065).
The Tickeron Price Growth Rating for this company is 36 (best 1 - 100 worst), indicating steady price growth. CERT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 93 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 98 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CERT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 96, placing this stock worse than average.
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Industry ServicestotheHealthIndustry
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