Certara — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue was $94.9 million for the quarter, a 4% year-over-year increase from $90.9 million in Q3 2025.
• Software revenue was $48.8 million, up 11% year-over-year from $43.8 million.
• Services revenue was $46.1 million, down 2% year-over-year from $47.1 million.
• Net loss from continuing operations was $3.6 million, an improvement of 26% compared to a $4.8 million loss in Q3 2025.
• Diluted loss per share from continuing operations was $(0.02), compared to $(0.03) in Q3 2025.
• Adjusted EBITDA was $30.2 million, up 6% from $28.6 million in Q3 2025, with an adjusted EBITDA margin of 31.8% (up from 31.5%).
• Adjusted net income was $13.5 million, down slightly from $13.8 million in Q3 2025.
• Adjusted diluted earnings per share was $0.09, consistent with Q3 2025.
• Cash generated from continuing operations was $30.7 million for the quarter.
• Cash and cash equivalents ended the quarter at $214.9 million.
• Total bookings were $92.5 million, a 4% year-over-year increase.
• Software bookings were $46.9 million, a 15% year-over-year increase.
• Services bookings were $45.6 million, a 5% year-over-year decrease.
• Trailing twelve-month total bookings were $409.2 million, up 2%.
• Trailing twelve-month software bookings were $202.4 million, up 8%.
• Trailing twelve-month services bookings were $206.8 million, down 2%, with a book-to-bill ratio of 1.15.
• Cost of revenues decreased to $31.4 million from $33.4 million in Q3 2025.
• Operating expenses increased to $61.1 million from $58.1 million in Q3 2025.

Guidance and Future Outlook:

• Full-year 2026 revenue growth range for continuing operations is narrowed to 2% to 3%.
• Software revenue growth is expected to remain above the total revenue growth range.
• Services revenue growth is expected to be at or below the low end of the total revenue growth range.
• Full-year 2026 adjusted EBITDA margin outlook remains 29% to 31%.
• Full-year 2026 adjusted diluted earnings per share range is updated to $0.31 to $0.34.
• Fully diluted weighted average shares outstanding are expected to remain between 155 million and 157 million.
• Effective tax rate is modeled between 25% and 30%.

Business Segments and Product Lines:

• The Regulatory and Medical Writing business is reported as discontinued operations following its divestiture on May 8, 2026.
• Grant Peterson was appointed Chief Product Officer effective November 2, 2026, to focus portfolio investments on accelerating growth across existing and new products.
• Software revenue growth of 11% marked the first double-digit organic growth quarter in two years.
• The company is working to convert its pipeline into bookings and revenue for the services segment.

Market and Competitive Landscape:

• The company serves over 2,600 biopharmaceutical companies, academic institutions, and regulatory agencies across 70 countries.
• The company operates in the model-informed drug development sector, utilizing biosimulation software, technology, and services.

Risks and Challenges:

• Risks include deceleration or resistance to the acceptance of model-informed biopharmaceutical discovery and development.
• Potential impacts from changes or delays in government regulation, R&D spending trends, and FDA policy changes.
• Risks related to customer renewals, contract terminations, or scope reductions.
• Challenges regarding the ability to retain key personnel, recruit qualified staff, and manage independent contractor mischaracterization.
• Risks associated with cybersecurity breaches, data privacy compliance, and third-party provider disruptions.
• Uncertainty regarding the variability of acquisition, financing, and stock compensation costs impacting GAAP results.

Management Commentary and Tone:

• CEO Jon Resnick expressed pleasure with steady progress against strategic, customer, and operational objectives, highlighting solid revenue and profit delivery.
• CFO Faiz Mohammed noted continued software momentum and initial benefits from operating actions implemented in the first half of the year.
• Management emphasized a focus on disciplined execution to deliver consistent performance.
• The tone reflects confidence in software momentum and the narrowing of the full-year revenue guidance range.

Other Key Points:

• The company hosted a conference call and webcast on November 5, 2026, at 8:30 a.m. ET.
• During the nine months ended September 30, 2026, the company spent $57.4 million on common stock repurchases.
• Capital expenditures for the nine months were $2.0 million, while capitalized software development costs were $20.7 million.
• Payments for business acquisition-related contingent consideration totaled $20.1 million for the nine months.
• The company reported a net loss from continuing operations of $21.5 million for the nine months ended September 30, 2026.
• Adjusted EBITDA for the nine months was $83.1 million.
• The company has not reconciled forward-looking adjusted EBITDA or adjusted EPS guidance to GAAP measures due to the unpredictability of acquisition, financing, and stock compensation costs.