Certara (NASDAQ:CERT) executives used the company’s fourth-quarter 2025 earnings call to outline a leadership transition, discuss end-market and execution factors that affected late-year software bookings, and set expectations for what CEO Jon Resnick called a “transition year” in 2026.
New CEO outlines operating reset and market backdrop
Resnick, who joined the company on Jan. 1, said his first weeks were focused on listening to customers and employees and evaluating the product portfolio and go-to-market plans. He described a market environment where regulators are increasingly open to computational and model-informed approaches, and where drug developers are seeking ways to reduce development costs, shorten timelines, and address evolving regulatory requirements.
He also highlighted examples of model-informed drug development (MIDD) work, including:
- A top-10 pharma company using millions of quantitative systems pharmacology (QSP) simulations to prioritize candidates and targets.
- A biotech using model-informed approaches to justify a higher first-in-human dose than standard methods, contributing to a successful Phase I and an eventual acquisition of the molecule.
- Virtual populations in Pompe disease used to compare a novel compound against standard of care and predict outcomes.
Strategy: portfolio focus, customer engagement, and cost discipline
Resnick said Certara will move forward with three strategic priorities: a more focused corporate strategy and product portfolio anchored in customer needs; deeper customer engagement with greater senior-level involvement; and a higher operational bar around pricing, delivery, and returns on sales, marketing, and R&D investments. He added that the company plans to leverage AI both in products and internal operations to improve efficiency and scale.
Management said it identified a path to approximately $10 million in cost avoidance relative to the initial 2026 plan.
Resnick said 2026 will be a transition year as the company implements changes and strengthens focus, and he reiterated an intention to be strategic with capital deployment, including executing against the company’s existing share repurchase authorization.
Fourth-quarter and full-year 2025 results
Chief Financial Officer Jon Gallagher reported fourth-quarter revenue of $103.6 million, up 3% year over year on a reported basis (2% constant currency). Full-year 2025 revenue totaled $418.8 million, up 9% reported (8% constant currency).
Fourth-quarter total bookings were $155.2 million, up 7% year over year, while trailing 12-month bookings were $482.1 million, up 8%.
Software revenue in the fourth quarter was $46.4 million, increasing 10% year over year, driven by MIDD software and Pinnacle 21. For the full year, software revenue was $183.3 million, up 18% reported. Gallagher said the Chemaxon acquisition contributed $22.9 million to 2025 software revenue, making organic software growth 7% for the year, which he said was in line with the plan.
Software bookings in the fourth quarter were $56.1 million, down 6% from the prior-year period. Gallagher said bookings were below expectations due to a combination of external factors and execution challenges, citing customer reorganizations and reprioritizations, slower clinical trial completions, and weaker pipeline conversion for new and renewal software. The trailing 12-month software bookings total was $184.3 million, up 9%.
Services revenue was $57.3 million in the fourth quarter, down 1% year over year. For the full year, services revenue was $235.6 million, up 3%. Gallagher said 2025 services revenue included $50.4 million in regulatory writing revenue, down from $54.7 million in 2024.
Technology-driven services bookings were $99.1 million in the fourth quarter, up 17%, and trailing 12-month services bookings were $297.8 million, up 8%. Gallagher noted better-than-expected spending commitments in December that helped drive higher-than-expected services bookings. He said MIDD services bookings grew at a double-digit rate in the quarter, while regulatory writing bookings grew in the high teens year over year.
Profitability, cash, and share repurchases
Adjusted EBITDA was $32.5 million in the fourth quarter, down from $33.5 million a year earlier, with an adjusted EBITDA margin of 31%. For the full year, adjusted EBITDA was $134.5 million, up from $122 million in 2024, and the adjusted EBITDA margin was 32%, consistent with 2024.
Certara posted a fourth-quarter net loss of $5.9 million, compared with net income of $6.6 million in the prior-year quarter. Adjusted diluted EPS was $0.09 for the quarter, down from $0.15 a year earlier.
Gallagher said Certara repurchased approximately 3.3 million shares for $43 million during 2025. The company ended the quarter with $189.4 million in cash and cash equivalents and $295.5 million of outstanding borrowings on its term loan, with full availability under its revolving credit facility.
2026 outlook: flat to 4% revenue growth, continued R&D investment
For 2026, Certara guided to total revenue ranging from flat to up 4% versus 2025. Gallagher said the company expects end markets to remain stable and for execution improvements to drive better growth through the year, with the first quarter closer to the low end of the range due to a tough comparison.
The company guided to an adjusted EBITDA margin of 30% to 32%, with margins expected to be lower in the first half and improve in the second half. Management attributed the margin outlook to continued investments in R&D, including product development, platform unification, and new launches and enhancements. Certara guided to adjusted EPS of $0.44 to $0.48 for the year and said it is modeling an effective tax rate of about 30%.
During Q&A, management discussed factors behind fourth-quarter software bookings softness, including big pharma reprioritization and headcount reductions affecting seat licenses, lower study counts affecting Pinnacle 21, and pipeline conversion shortfalls on the company’s side. Resnick said he has not heard customers “hitting the pause button” on purchases due to AI displacing Certara’s tools, adding that he has asked customers directly about the topic.
Resnick also said Certara is in the final stages of a strategic review of the regulatory writing and operations business and expects to provide an update in the near term. On longer-term growth, he reiterated a view that the company “should be able to drive double-digit growth” over time, but said Certara is not providing a multi-year path yet and expects to share more detail later in 2026.
About Certara (NASDAQ:CERT)
Certara is a biosimulation software and services company that partners with pharmaceutical, biotechnology and medical device developers to accelerate drug discovery, development and regulatory approval. The company’s platform integrates quantitative pharmacology, real-world evidence, artificial intelligence and machine learning to model and simulate drug behavior across a range of therapeutic areas and patient populations. By applying these mechanistic and data-driven approaches, Certara helps its clients predict clinical outcomes, optimize dosing strategies and streamline decision-making throughout the product lifecycle.
The company’s offerings are divided into software tools and consulting services.
