CERT — Certara, Inc.

Certara (CERT) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Q4 2025 Revenue: $103.6 million, up 3% year-over-year (2% on a constant currency basis).
• Full Year 2025 Revenue: $418.8 million, up 9% year-over-year (8% on a constant currency basis).
• Q4 2025 Software Revenue: $46.4 million, up 10% year-over-year.
• Full Year Software Revenue: $183.3 million, up 18% year-over-year.
• Q4 2025 Services Revenue: $57.3 million, down 1% year-over-year.
• Adjusted EBITDA: $32.5 million in Q4 2025 (31% margin), $134.5 million for the full year (32% margin).
• Net Loss: $5.9 million in Q4 2025, compared to a net income of $6.6 million in Q4 2024.
• Adjusted EPS: $0.09 in Q4 2025, down from $0.15 in Q4 2024.
• Cash Position: $189.4 million in cash and cash equivalents as of December 31, 2025.

2. Strategic Updates and Business Highlights

• Leadership Transition: Jon Resnick joined as CEO, emphasizing the need for operational improvements and a sharper focus on customer engagement.
• Market Opportunity: Certara aims to leverage AI-enabled technologies and model-informed drug development (MIDD) to enhance drug development efficiency.
• Customer Engagement: Resnick highlighted the importance of deeper customer relationships and integrating software with scientific expertise to drive innovation.
• Operational Focus: Plans to sharpen corporate strategy, enhance customer engagement, and improve operational efficiency were outlined.
• Regulatory Review: Certara is finalizing a strategic review of its regulatory writing and operations business.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to be flat to low single-digit growth (0% to 4%).
• Adjusted EBITDA Margin: Projected to be in the range of 30% to 32%.
• Adjusted EPS Guidance: Expected between $0.44 and $0.48 per share.
• Market Conditions: Anticipated stability in end markets, with potential for improved revenue growth as operational improvements take effect.

4. Bad News, Challenges, or Points of Concern

• Declining Bookings: Software bookings in Q4 2025 were down 6% year-over-year, attributed to customer reorganization and execution challenges.
• Regulatory Writing Revenue Decline: Services revenue showed low single-digit growth, with regulatory writing revenue decreasing from $54.7 million in 2024 to $50.4 million in 2025.
• Execution Gaps: Management acknowledged internal execution gaps impacting growth, particularly in converting bookings to revenue.
• Market Headwinds: External factors, including slower clinical trial completions and reduced study counts, contributed to weaker performance in Tier 1 customer bookings.

5. Notable Q&A Insights

• CEO's Perspective: Jon Resnick expressed optimism about Certara's potential for double-digit growth, citing significant market opportunities and the need for improved execution.
• AI Integration: Discussions highlighted the ongoing integration of AI into Certara's software products, with expectations for enhanced functionality and efficiency.
• Customer Sentiment: Resnick noted that while there is industry-wide uncertainty regarding AI investments, clients are not pausing their technology evaluations.
• Regulatory Environment: There is a growing acceptance of computational and modeling approaches by regulatory bodies, which Certara aims to capitalize on.
• Sales Strategy: Resnick emphasized the importance of aligning pricing with value and enhancing customer-centric sales initiatives to drive growth.

Overall, Certara is navigating a transitional phase under new leadership, with a focus on operational improvements, customer engagement, and leveraging AI technologies to drive future growth amidst current challenges.