CERT — Certara, Inc.

Summary of Certara Q4 2025 Earnings Call

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 Software Revenue: $46.4 million, up 10% year-over-year.
• Full Year Software Revenue: $183.3 million, up 18% year-over-year.
• Q4 Services Revenue: $57.3 million, down 1% year-over-year.
• Adjusted EBITDA for Q4: $32.5 million (31% margin), down from $33.5 million (32% margin) in Q4 2024.
• Net Loss for Q4: $5.9 million, compared to net income of $6.6 million in Q4 2024.
• Adjusted EPS for Q4: $0.09, down from $0.15 in Q4 2024.
• Cash and Cash Equivalents: $189.4 million at year-end.

2. Strategic Updates and Business Highlights:

• New CEO Jon Resnick emphasized the need for Certara to sharpen operations and focus on customer engagement to unlock growth potential.
• The company aims to leverage AI and model-informed drug development (MIDD) to drive innovation and improve efficiency in drug development processes.
• Certara is in the final stages of a strategic review of its regulatory writing and operations business, with a decision expected soon.
• The company is focusing on enhancing its sales and marketing strategies, improving customer engagement, and integrating its software and services offerings.

3. Forward Guidance and Outlook:

• For 2026, Certara expects revenue growth to be flat to 4%, reflecting market conditions and operational improvements.
• Adjusted EBITDA margin is projected to be between 30% and 32%.
• Adjusted EPS is expected to range from $0.44 to $0.48 per share.
• The company anticipates a transition year in 2026 as it implements operational changes.

4. Bad News, Challenges, or Points of Concern:

• Declining Metrics: Software bookings in Q4 were down 6% year-over-year, attributed to customer reorganization and slower clinical trial completions.
• Execution Challenges: The company acknowledged internal execution gaps that impacted revenue growth, particularly in software bookings.
• Market Headwinds: External factors, including changes in customer spending and clinical trial dynamics, have created challenges for growth.
• Regulatory Writing Revenue: Experienced a decline from $54.7 million in 2024 to $50.4 million in 2025, indicating potential issues in that segment.

5. Notable Q&A Insights:

• Jon Resnick expressed optimism about the growth potential of Certara, citing the strong market demand for MIDD and AI-enabled solutions.
• The management acknowledged that while the market is improving, execution will be critical to capturing growth opportunities.
• There was a consensus that the regulatory environment is becoming more favorable for computational modeling, which could benefit Certara's offerings.
• Concerns were raised about the impact of AI on customer decision-making and whether it caused delays in bookings; management clarified that AI was not seen as a significant factor in the recent slowdown.
• The company is focusing on aligning pricing strategies with the value provided to clients, indicating potential for better pricing in certain product areas.

Overall, Certara is navigating a challenging environment with a focus on operational improvements and strategic growth initiatives while managing declining metrics and execution challenges.