Certara (CERT) Earnings Date & Reports

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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Earnings Context and Why It 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 (artificial intelligence) offerings—can translate into durable revenue and margin expansion amid a mixed environment for biopharmaceutical research and development spending.

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%.

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.

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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.

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