Certara (700) Q2 2026 Earnings Report

The call presented a balanced picture: clear, measurable momentum in software, AI integration and product/scientific leadership (strong bookings growth in software, pipeline expansion, cloud wins, regulatory engagement and scientific publications), alongside near-term financial and operational headwinds (service revenue declines, modest overall revenue growth, margin impact from divestiture-related stranded costs, and a GAAP net loss). Management has taken decisive operational actions (RIF, product reprioritization, new CCO, $13M run-rate savings) and is bullish on mid-term growth, but execution risk remains in converting a larger services pipeline and realizing cost savings. On balance the results are cautiously constructive but not yet a decisive turnaround in overall financial performance.

Certara reaffirmed full‑year 2026 revenue guidance of 0%–4% growth, which management says equates to $367M–$382M on a continuing‑operations basis, with software expected to be at or above the high end of that range and services at or below the low end; full‑year adjusted EBITDA margin is guided to 29%–31% (revised from 30%–32%), adjusted diluted EPS from continuing operations is $0.31–$0.36, fully diluted shares 155M–157M and an effective tax rate of ~30%. The company is targeting roughly $13M of run‑rate cost savings (after a RIF affecting ~5% of employees), finished Q2 with $184.1M cash, $294M term‑loan borrowings and $100M revolver availability, completed a $100M repurchase program (Q2 repurchases $17.4M) and has a new $50M buyback authorization, and noted the May divestiture of the regulatory/medical‑writing business (which contributed $19.2M revenue and ~$7.5M adjusted EBITDA through May and roughly $17M adjusted EBITDA in 2025) as the primary driver of the change in margin guidance.