Certara Reshuffles Leadership and Cost Base as Software Momentum Builds While Services Business Continues to Lag
Q2 2026 earnings call, August 4, 2026
Certara used its second-quarter call to unveil a new commercial leadership structure and reaffirm full-year guidance, even as the underlying numbers showed a business still working through the aftershocks of a major divestiture and a multi-year go-to-market overhaul. Total revenue grew a modest 1% to $93.3 million, with software once again doing the heavy lifting while services continued to shrink.
New Chief Commercial Officer Signals a Reset in Go-to-Market Strategy
The headline news was the appointment of Julien Perrier as Chief Commercial Officer, effective August 1, alongside a promotion of Eric Jahn to Chief Information Officer. Perrier, most recently CEO of an AI-powered diagnostics company, is being brought in to unify sales and marketing behind Certara's newly reorganized business units, Model Informed Discovery and Drug Development and Accelerated Clinical Evidence. CEO Jon Resnick, who joined in January, described the timing as the culmination of six months of structural change: "We've taken the hard steps over the last 6 months to put those building blocks in the right places. I'm pretty pleased with the progress we're making." He was careful to frame the current quarter as still early innings, telling analysts the changes "fully rolled out in July" and that execution, not the end market, is what will determine the pace of recovery.
Software Now Over Half the Business, Bookings Momentum Accelerating
The most tangible evidence of progress showed up in software. Revenue there grew 4% to $48.8 million and now represents 53% of total revenue, up from 40% just two years ago. Bookings growth is the more telling signal: normalizing for the Chemaxon acquisition, trailing-12-month software bookings grew 7% exiting the first half, a sharp acceleration from 0.8% exiting 2025. Management pointed to strength in Simcyp, Phoenix and Pinnacle 21, and highlighted 30 cloud implementations of the Phoenix pharmacometrics platform this year. Resnick called out first-time wins in China, an expanded Middle East footprint, and a full modeling collaboration in Japan using the CertaraIQ platform, arguing that international markets, while still small contributors, represent "outsized growth potential" as the company reprioritizes global expansion under Perrier.
Services Remains the Weak Link, But Pipeline Is Rebuilding
Services revenue fell 3% to $44.5 million and bookings declined 6%, with a book-to-bill ratio of 1.07. Resnick was unusually direct about the root cause, criticizing the generalist go-to-market model rolled out in 2024: "I have been vocal about my difference of opinion on the way that you should be moving this business forward... we need to get our scientists out in front of the market more directly. They're the lifeblood of this business." The fix has been to rehire PhD-led scientific sales teams and push specialists back into direct client engagement, a shift management credits for pipeline growing 27% year-over-year exiting the quarter. Whether that pipeline converts into revenue in the back half remains the key swing factor for the stock, since guidance assumes services stays at or below the low end of the 0% to 4% full-year growth range while software runs at or above the high end.
Divestiture Creates Margin Drag That Isn't About the Core Business
Certara closed the sale of its regulatory and medical writing business on May 8, a unit that contributed $19.2 million of revenue and $7.5 million of adjusted EBITDA in discontinued operations during the transition period, but which generated roughly $17 million of EBITDA in 2025 before unallocated overhead. That mismatch, stranded costs remaining on Certara's books without the associated revenue, is the reason full-year adjusted EBITDA margin guidance was trimmed to 29% to 31% from the 30% to 32% range given in May. Interim CFO Faiz Mohammed was emphatic that this is an accounting artifact of the new business mix rather than a deterioration in performance: "It's not a lowering of the midpoint, but a change to reflect the new composition of the business." To offset the drag, Certara executed a reduction in force in May affecting roughly 5% of its global workforce, expected to generate about $13 million in run-rate savings, an incremental figure on top of previously identified cost actions.
AI Embedded Across Both Products and Internal Operations
Management leaned heavily into specifics on AI usage, a departure from the vaguer AI talking points common on peer calls. Up to 85% of new code is now AI-assisted, with a 65% year-over-year increase in development output per software engineer. Internally, agents are cutting cycle times by as much as 90% in legal and IT workflows. On the product side, CoAuthor, the regulatory writing tool used in more than 400 submissions, now runs nearly 600 AI agents and is delivering a 40% productivity increase in drafting quality-control documents with over 90% accuracy summarizing complex databases. Scientific service delivery is also being accelerated, with proprietary agentic workflows cutting certain task times by up to 80%. Resnick framed Certara's differentiation against generic AI tools around accountability: "Generic AI tools don't have the same level of specialization and cannot provide the accountability that Certara can." The company's partnership with NVIDIA, announced a few weeks prior to the call, will integrate BioNeMo agent tooling into Certara's forthcoming "next-generation platform," though management declined to give a timeline for revenue impact, calling it instead a signal of a broader shift in how the company partners across the ecosystem.
Regulatory Tailwinds and a Striking Approval Statistic
Certara continues to position itself as the scientific infrastructure layer behind global drug approvals, citing HHS's Operation TrialBlazer, new FDA guidance backing quantitative systems pharmacology for first-in-human dosing, and the July implementation of ICH M15 in Europe as evidence that model-informed drug development is moving from niche practice into policy. The most eye-catching data point on the call: every one of the 13 novel therapies approved by the FDA in the quarter came from a Certara client, including Eli Lilly's orforglipron, the first once-daily non-peptide oral GLP-1 therapy, which was approved in just 50 days, the fastest new molecular entity approval since 2002. Certara's Simcyp Simulator supported the drug interaction labeling behind that approval. Management argued that evolving regulatory frameworks create more demand rather than hesitancy among clients, noting a lag between when regulators establish new modeling standards and when adoption becomes routine practice, a gap the company is positioning its scientists to help close.
Capital Return Continues Alongside Margin Pressure
Certara completed its prior $100 million share repurchase program during the quarter, buying back $17.4 million in shares, and its board approved a new $50 million authorization in the third quarter. Resnick declined to commit to a specific execution timeline but said the incremental authorization signals where the company sees value. The balance sheet remains reasonably clean, with $184.1 million in cash against $294 million in term loan borrowings and full availability under its $100 million revolver. Full-year adjusted diluted EPS guidance from continuing operations was set at $0.31 to $0.36, with an effective tax rate near 30%.