Summary
Certara closed fiscal 2025 with fourth-quarter revenue of $103.6 million, up 3.3% from the prior-year quarter. Full-year revenue reached $418.8 million, up 8.7%. The top line improved, but profitability reversed at the end of the year. The fourth quarter produced operating income of $0.8 million, down 86.1%, and an operating margin of 0.8%, down 5.2 percentage points. Net loss was $5.9 million, swinging to a loss from net income in the prior-year quarter. For the full year, the picture was better. Operating income was $21.0 million, up from an operating loss, and operating margin was 5.0%, up 5.5 percentage points. Net loss for the year was $1.6 million, a loss that narrowed 86.8%, and diluted EPS was -$0.01, a loss that narrowed from the prior-year period.
Operationally, bookings told a mixed story. Total bookings for the fourth quarter were $155.2 million, up 7%. Services bookings rose 17% to $99.1 million, while software bookings fell 6% to $56.1 million. Management attributed the software bookings decline to external factors and execution challenges. Net retention was 107.2% in the fourth quarter and 105.3% for the full year. Management said software revenue grew while services revenue declined modestly on normal seasonal fluctuations, with service bookings supporting revenue momentum. Jon Resnick became chief executive officer on January 1, 2026, and said 2026 will be a year of transition and investment.
Non-GAAP results and cash generation gave a different view. Fourth-quarter adjusted EBITDA was $32.5 million, down 3%, while adjusted net income was $14.9 million and adjusted diluted EPS was $0.09. For the full year, adjusted EBITDA was $134.5 million, up 10%, with an adjusted EBITDA margin of 32%. Full-year adjusted net income was $70.9 million, and adjusted diluted EPS was $0.44. Cash generation was uneven. Fourth-quarter operating cash flow was $28.8 million, down 41.6%. Full-year operating cash flow was $96.3 million, up 19.7%. Capital expenditures were $1.0 million in the fourth quarter, up 141.7%, and $1.8 million for the full year, up 8.3%. Deferred revenue was $77.8 million, down 1.4%, while remaining performance obligations were $418.8 million, up 8.7%.
For full-year 2026, Certara guides revenue growth of 0-4%, an adjusted EBITDA margin of 30-32%, adjusted diluted EPS of $0.44-$0.48, and fully diluted shares of 160 million to 162 million. Management expects end markets to remain stable but describes 2026 as a transition and investment year. The main risks sit around execution and the operating environment. Software bookings declined because of external factors and execution challenges. Services revenue softened on seasonal fluctuations. The fourth-quarter net loss was driven by higher operating expenses, increased tax expenses, and higher cost of revenues. The company also faces regulatory uncertainty, including government funding pullbacks, FDA policy changes, drug pricing initiatives, and biopharmaceutical consolidation. It is reviewing strategic options for its regulatory services business, and competition in biosimulation remains fragmented. The term loan refinancing added transaction expenses. These items leave little room for error as the new CEO works to sharpen strategy and improve commercial execution.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $103.6M | $104.6M | -0.9% | $100.4M | +3.3% |
| Research & development | $11.3M | $10.3M | +9.9% | $7.8M | +45.1% |
| Sales & marketing | $14.0M | $13.0M | +7.8% | $13.2M | +6.2% |
| General & administrative | $23.9M | $24.6M | -3.1% | $21.1M | +13.0% |
| Total operating expenses | $63.6M | $61.9M | +2.8% | $56.1M | +13.5% |
| Operating income (loss) | $836.0K | $3.0M | -72.2% | $6.0M | -86.1% |
| Operating margin | 0.8% | 2.9% | -2.1 pp | 6.0% | -5.2 pp |
| Net income (loss) | -$5.9M | $1.5M | -486.6% | $6.6M | -189.6% |
| Net margin | -5.7% | 1.5% | -7.2 pp | 6.5% | -12.2 pp |
| Diluted EPS | -$0.04 | $0.01 | -$0.05 | $0.04 | -$0.08 |
Risks
AI and machine learning are being incorporated across Certara's software and services, but the filing warns that new entrants and established technology companies may deploy AI more effectively or at lower cost, potentially making Certara's biosimulation offerings less competitive. MD&A also highlights AI integration across the product portfolio as a growth investment.
FDA and other regulatory disruptions from funding constraints, workforce reductions, government shutdowns, or policy changes could delay guidance, inspections, and review activities that underpin demand for Certara's regulatory and biosimulation services. The filing cites HHS reorganization and a planned reduction of approximately 3,500 full-time FDA positions.
A general pullback of government support and funding for drug development, especially for public sector and academic organizations, has reduced and could continue to reduce demand for Certara's products and services. The filing also cites disruptions at NIH, NSF, CDC, and FDA that could delay or increase the cost of drug development.
Reductions in customer R&D spending due to lack of funding, drug price controls, healthcare cost containment, or macroeconomic pressure have reduced and may continue to reduce demand for Certara's products and services. The filing specifically cites the Inflation Reduction Act, most-favored-nation drug pricing, Medicare and Medicaid changes, and the OBBBA.
A significant portion of software revenue comes from renewals, and customers have no obligation to renew licenses or subscriptions after terms of typically one to three years. Customers may renew at lower prices, reduce user licenses, or terminate or reduce scope, which could reduce revenue.
Q4 FY2025 operating income was down 86.1% to $0.84 million and net income swung to a loss of $5.90 million, even as Q4 revenue rose 3.3%. Full year net loss narrowed 86.8% to $1.60 million, but quarterly profitability remains volatile.
Bookings vary significantly from quarter to quarter and year to year, and net retention can fluctuate. MD&A reports full year 2025 bookings of $482.1 million versus $445.3 million in 2024, while full year net retention rate was 105.3% in 2025 versus 108.8% in 2024.
Certara depends on highly qualified personnel, including 414 employees with PhDs or MDs as of December 31, 2025, and faces significant competition for biopharmaceutical services talent. Loss of key scientists or inability to recruit could harm growth and customer relationships.
As of December 31, 2025, Certara had $295.5 million in total borrowings under its Credit Agreement and $100.0 million of capacity outstanding under its revolving credit facility. Variable-rate debt, restrictive covenants, and pledged assets could limit flexibility or require cash flow to service debt.
Certara has significant goodwill and intangible assets from acquisitions, and future impairment could adversely affect results. The filing notes a $47.0 million goodwill impairment charge in 2023 for the prior regulatory writing reporting unit.
Certara has acquired 21 companies since 2013, including Chemaxon in 2024, and regularly evaluates acquisitions and divestitures. Integration failures, earn-out disputes, dilution, or inability to achieve synergies could disrupt operations and harm results.
Certara derives revenue from U.S. government entities including the FDA and CDC and has accepted government grants, subjecting it to termination for convenience, audits, False Claims Act liability, and compliance costs. Government contracts and grants may be suspended or delayed by protests or funding changes.
Adverse global economic conditions, inflation, higher interest rates, tariffs, and trade tensions, especially with China, could cause customers to reduce or delay R&D spending and intensify pricing pressure. Certara also operates globally, with 31% of 2025 revenue transacted in foreign currencies versus 28% in 2024.
Arsenal Capital Partners owns or controls approximately 22.8% of outstanding common stock as of December 31, 2025, and Arsenal, officers, and directors in aggregate represented approximately 25.2%. This concentration gives Arsenal significant influence over stockholder votes and potential change of control.
Many service contracts are fixed-price or fee-for-service with a cap, so Certara bears financial risk if it underprices contracts or experiences cost overruns. The filing notes it has had to commit unanticipated resources to complete fixed-fee projects, lowering margins.
Certara initiated a review process in 2024 to evaluate long-term strategic options for its regulatory services business. The outcome could significantly impact operations, and divestitures may disrupt relationships or fail to achieve anticipated benefits.
SaaS KPIs
All quarters →Services Bookings
Software Bookings
Total Bookings
Total customers
Adjusted EBITDA
Summary, forecast, risks and KPIs are extracted from Certara, Inc.'s SEC filings for Q4 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.