RADNOR, PA — Certara Inc. (Nasdaq: CERT) reported its first quarter of double-digit organic software revenue growth in two years, helping the Radnor-based drug development technology company narrow its third-quarter loss despite continued weakness in its services business.
Software revenue increased 11% to $48.8 million in the quarter ended Sept. 30, 2026, from $43.8 million a year earlier, while services revenue declined 2% to $46.1 million.
Total revenue from continuing operations rose 4% to $94.9 million from $90.9 million, according to the company’s quarterly financial results.
Certara reported a net loss from continuing operations of $3.6 million, or 2 cents per diluted share, compared with a loss of $4.8 million, or 3 cents per share, in the third quarter of 2025.
Adjusted earnings before interest, taxes, depreciation and amortization increased 6% to $30.2 million from $28.6 million. The adjusted EBITDA margin improved to 31.8% from 31.5% a year earlier and increased by more than 3.7 percentage points from the second quarter.
The results reflect Certara’s increasing reliance on software growth as it works to improve operating efficiency and stabilize demand for its drug development services.
Chief Executive Officer Jon Resnick identified the software performance as a significant development following two years without a quarter of double-digit organic growth.
“We delivered solid revenue and profit in the quarter, and software revenue grew 11% organically, our first double-digit quarter in two years,” Resnick stated.
The company’s software bookings also strengthened, increasing 15% to $46.9 million during the quarter. Services bookings declined 5% to $45.6 million.
Total quarterly bookings reached $92.5 million, up 4% from the prior-year period.
Over the trailing 12 months, software bookings increased 8% to $202.4 million, while services bookings declined 2% to $206.8 million.
Combined bookings for the 12-month period totaled $409.2 million, an increase of 2%.
The trailing 12-month services book-to-bill ratio was 1.15, indicating that services bookings exceeded recognized services revenue over that period.
Certara’s cost of revenue declined to $31.4 million from $33.4 million, reflecting lower stock-based compensation, professional fees and equipment and software costs, partially offset by higher employee expenses.
Operating expenses increased to $61.1 million from $58.1 million.
The increase was driven primarily by $4.4 million in additional employee-related expenses, $1.7 million in higher equipment and software costs, and $1.2 million in executive recruiting expenses.
Higher depreciation, amortization and consulting expenses also contributed, partially offset by reductions in stock-based compensation and acquisition-related contingent consideration adjustments.
Adjusted net income was $13.5 million, compared with $13.8 million a year earlier. Adjusted diluted earnings remained unchanged at 9 cents per share.
The company generated $30.7 million in cash from continuing operations during the quarter and ended September with $214.9 million in cash.
Interim Chief Financial Officer Faiz Mohammed attributed the margin improvement partly to operational changes implemented during the first half of 2026.
“The third quarter reflects continued software momentum and the initial benefits of the operating actions we implemented in the first half,” Mohammed stated.
Following nine months of results, Certara narrowed its full-year 2026 revenue growth forecast for continuing operations to a range of 2% to 3%.
Management expects software revenue growth to exceed that range, while services revenue growth is projected to remain at or below its lower end.
The company maintained a fourth-quarter adjusted EBITDA margin outlook of 29% to 31%, consistent with its previously communicated full-year margin expectations.
Certara also updated its projected full-year adjusted diluted earnings to 31 cents to 34 cents per share.
Its financial assumptions include 155 million to 157 million fully diluted weighted-average shares outstanding and an effective tax rate of 25% to 30%.
The outlook excludes Certara’s former Regulatory and Medical Writing business, which was divested May 8, 2026, and is classified as discontinued operations.
Alongside its financial results, Certara appointed Grant Peterson chief product officer, effective Nov. 2, placing an experienced enterprise software executive in charge of directing product investment and development.
Peterson previously served as chief product officer at Conga, where he oversaw the development and launch of the Conga Advantage platform, which consolidated the company’s principal product lines.
Before joining Conga, he spent 12 years as chief technology officer at DocuSign, overseeing product architecture, engineering, innovation and technical operations.
At Certara, Peterson will focus on directing investments across existing and new software products, with an emphasis on customer requirements and technology development.
The appointment comes as Certara seeks to sustain its recent software growth while improving operating performance across its remaining businesses.
The company’s updated outlook reflects modest overall revenue expansion for 2026, with software expected to remain its principal growth driver as management works to convert its services pipeline into additional bookings and revenue.
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