Certara, Inc. reported fourth‑quarter 2025 revenue of $103.65 million, up 3 % from $100.4 million in Q4 2024, and an adjusted earnings per share of $0.09, missing the consensus estimate of $0.11 by $0.02. The miss reflects a 3 % decline in adjusted EBITDA to $32.5 million, driven by higher operating expenses that rose $7.5 million year‑over‑year to $63.6 million, including increased costs for employees, equipment, consulting, and transaction services.
Software revenue grew 10 % to $46.4 million, while services revenue fell 1 % to $57.3 million. Total bookings for the quarter reached $155.2 million, up 7 % year‑over‑year; software bookings declined 6 % and services bookings increased 17 %. The mix shift toward services helped offset the decline in software bookings, but the overall booking trend signals a slowdown in software demand.
For the full fiscal year 2025, Certara posted revenue of $418.8 million, up 9 % from $384.4 million in FY 2024, and adjusted EBITDA of $134.5 million, up 10 % from $120–$124 million in FY 2024. The year‑long adjusted EBITDA margin of 32 % sits at the high end of the company’s plan, driven by operating efficiencies while maintaining investment in research and development.
The company guided 2026 revenue growth of 0‑4 % and an adjusted EBITDA margin of 30‑32 %. The conservative outlook reflects management’s caution amid a transition to new leadership and the need to invest in strategic initiatives, while still aiming to preserve profitability through cost discipline.
"I am excited to join Certara, the market leader in the fast‑growing, high‑impact fields of AI‑enabled biosimulation and model‑informed drug development,” said Jon Resnick, Chief Executive Officer. "To fully realize our potential, over the course of 2026 we will sharpen our strategic focus, accelerate innovation across our product portfolio, and elevate our commercial execution. It will be a year of transition and investment as we put the right people, processes, and structures in place to better capture market opportunities and drive sustained long‑term growth.” "Adjusted EBITDA margin was 32% for the year, at the high end of our plan, driven by operating efficiencies while maintaining investment in R&D,” said John Gallagher, Chief Financial Officer. "As we look forward into 2026, we expect end markets to remain stable, and we anticipate a number of changes and initiatives over the course of 2026 to drive improving revenue growth through the year, and to better position us for sustained long term growth.”
Market reaction to the results was muted, with pre‑market trading showing a decline of 1.67 % to $6.48. The negative reaction was driven primarily by the EPS miss and the conservative 2026 revenue guidance, which fell short of analyst expectations of a 4‑5 % growth rate and a higher margin target.
Headwinds for Certara include rising operating expenses, a decline in software bookings, and a shift in the mix toward services, which has a lower margin profile. Tailwinds remain strong: the company’s software revenue grew 10 % in Q4 and 18 % for the full year, services revenue grew 3 % year‑over‑year, and the company maintained a high adjusted EBITDA margin. The transition to new CEO Jon Resnick signals a strategic focus on AI integration and commercial execution, positioning Certara to capture long‑term growth opportunities while managing short‑term cost pressures.
In summary, Certara’s Q4 2025 earnings demonstrate a solid full‑year performance but reveal a slowdown in top‑line growth and a margin compression in the quarter. The company’s 2026 guidance reflects cautious optimism, emphasizing investment in strategy and execution while aiming to preserve profitability. Investors will likely monitor the company’s ability to reverse the software booking decline and sustain its high margin profile as it navigates the transition to new leadership.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.