Certara, Inc. ((CERT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Certara, Inc. recently held its second quarter 2025 earnings call, which conveyed a generally positive sentiment. The company reported robust growth in revenue and bookings, primarily driven by its software performance and strategic investments in AI and R&D. Despite some challenges such as timing-related softness in Tier 1 software, regulatory services softness, and geopolitical uncertainties, the overall highlights of the call outweighed the lowlights, indicating a positive outlook for the company.
Revenue and Bookings Growth
Certara reported a second quarter revenue of $104.6 million, marking a 12% year-over-year growth. Additionally, the company achieved bookings of $112 million, reflecting a 13% increase from the previous year. This growth underscores the company’s strong market position and its ability to capitalize on opportunities in the biosimulation sector.
Software Revenue Surge
The company’s software revenue surged to $46.7 million, growing 22% on a reported basis and 9% organically. This growth was led by the strong performance of Simcyp, along with a $5.1 million contribution from Chemaxon. The software segment’s success highlights Certara’s strategic focus on enhancing its software offerings.
EMA Qualification for Simcyp
Certara achieved a significant milestone by becoming the first and only company to receive European Medicines Agency (EMA) qualification for a PBPK Modeling Platform. This achievement underscores the company’s leadership in biosimulation and its commitment to advancing drug development technologies.
Growing QSP Services
The company’s biosimulation services bookings were bolstered by the strength of its QSP and Simcyp services. QSP reached a notable milestone with the optimization of ISB 2001, which resulted in a Fast Track designation for relapsed refractory myeloma patients, showcasing Certara’s impact in the healthcare sector.
Strong Financial Performance
Certara reported an adjusted EBITDA of $31.9 million for the second quarter of 2025, up from $26.3 million in the same period of 2024. The adjusted EBITDA margin stood at 31%, reflecting the company’s efficient financial management and operational excellence.
Investment in AI and R&D
Certara is ramping up its investment in R&D to develop a next-generation AI-enabled Model Informed Drug Development (MIDD) platform. The anticipated launch of new products like CertaraIQ in the fourth quarter signifies the company’s commitment to innovation and technological advancement.
Timing-Related Softness in Tier 1 Software
Despite the overall positive performance, Certara experienced timing-related softness in its Tier 1 software. However, the company remains on track with its year-to-date plan, indicating resilience in its software strategy.
Regulatory Services Softness
Services revenue grew by 5% on a reported basis, with some softness in regulatory services impacting overall performance. This highlights the need for strategic adjustments to enhance service offerings and maintain growth momentum.
Geopolitical and Macroeconomic Challenges
Certara acknowledged the cautious stance of large pharma companies due to geopolitical and macroeconomic uncertainties, which affect decision-making timelines. Challenges such as proposed pharmaceutical tariffs and potential pricing algorithm changes pose additional hurdles for the industry.
Slower Hiring and Margin Pressure
The first half of the year was affected by slower hiring, and Certara anticipates adjusted EBITDA margins between 30% to 32%. Discretionary investments in R&D may impact margins, but the company remains focused on strategic growth initiatives.
Forward-Looking Guidance
Certara reaffirmed its full-year guidance, projecting total revenue between $415 million and $425 million, with adjusted EBITDA margins of 30% to 32%. The company emphasized the strength of its QSP services and Simcyp software, with a 15% growth in second quarter bookings for services. The upcoming launch of CertaraIQ and strategic investments in AI and biosimulation technologies indicate a continued focus on expanding its Model Informed Drug Development platform.
In summary, Certara’s second quarter 2025 earnings call highlighted strong growth in revenue and bookings, driven by software performance and strategic investments. Despite facing some challenges, the overall sentiment was positive, with significant achievements such as the EMA qualification for Simcyp and the anticipated launch of CertaraIQ. The company’s forward-looking guidance and commitment to innovation position it well for future growth.