Certara, Inc. Q2 FY2026 earnings

Certara's FY2026 second quarter revenue was $93.27 million, up 1.0% from $92.36 million in the prior-year quarter. Year-to-date revenue reached $187.36 million, up 1.6% from $184.46 million. The top line was steady, but GAAP profitability moved sharply lower. The quarter produced an operating loss of $0.20 million, compared with operating income of $7.67 million a year earlier. For the first six months, the operating loss was $6.46 million against operating income of $11.97 million. Operating margin was -0.2% in the quarter, down from 8.3%, a decline of 8.5 percentage points. Net loss attributable to common stockholders was $55.27 million, compared with a net loss of $1.97 million in the prior-year quarter, so the loss widened. Diluted loss per share was -$0.36, compared with -$0.01 a year earlier. On a year-to-date basis, net loss was $64.03 million against net income of $2.78 million, and diluted loss per share was -$0.41 against diluted earnings per share of $0.02. The large GAAP net loss includes discontinued operations tied to the divested Regulatory and Medical Writing business, which closed on May 8, 2026.

Commercial activity was mixed. Total bookings were $98.3 million in the quarter, up 1% from a year earlier. Software bookings rose 9% to $50.7 million, while services bookings fell 6% to $47.6 million. The net retention rate was 101.5% in Q2 2026, down from 107.6% in Q2 2025. Adjusted EBITDA was $26.2 million, down 3% from $27.0 million. Adjusted net income was $12.5 million, compared with $12.7 million, and adjusted diluted earnings per share was $0.08, flat with $0.08. Management said software strength and improving services performance should support the second half of the year.

Certara used the quarter to reshape the business. It closed the sale of its global medical writing and related regulatory services business on May 8, 2026, and reorganized around two units: Model Informed Discovery and Drug Development (MID3) and Accelerated Clinical Evidence (ACE). The company also cut about 5% of its global employee base, mostly overhead, and expects roughly $13 million in run-rate savings. Management appointed Julien Perrier as Chief Commercial Officer effective August 1, 2026, and Eric Jahn as Chief Information Officer. On capital return, Certara repurchased $17.4 million of shares in the second quarter, completing a $100 million repurchase program. The board then authorized an additional $50 million under the program.

Cash generation slowed. Operating cash flow was $10.04 million in the quarter, down 43.7% from $17.84 million in the prior-year quarter. For the first six months, operating cash flow was $21.73 million, down 38.3% from $35.19 million. Capital expenditures were $0.62 million in the quarter. Deferred revenue was $80.04 million at June 30, 2026, up 12.4% from $71.22 million a year earlier. Remaining performance obligations were $151.04 million, essentially flat with $150.84 million, a 0.1% increase.

Guidance for full-year 2026 is unchanged on revenue growth. Certara expects continuing operations revenue growth of 0% to 4% for the full year. The company updated its full-year 2026 adjusted EBITDA margin outlook to approximately 29% to 31% and its adjusted diluted earnings per share outlook to $0.31 to $0.36. It expects fully diluted shares of 155 million to 157 million. The outlook excludes the divested Regulatory and Medical Writing business, which will be reported as discontinued operations for 2026. Risks to the plan include customer retention and expansion, competition in biosimulation, changes in regulatory acceptance of model-informed drug development, government funding pullbacks for drug development, macroeconomic pressure, tariffs, and interest rates. The company also faces execution risk from the divestiture, the reorganization, and the need to realize the projected cost savings.